Ulta Beauty is a specialist cosmetics retailer that has attracted the eye of Berkshire Hathaway. If the Oracle of Omaha likes it, does that mean that we should as well? It may not be that simple, with a tough competitive environment that is putting Ulta's margins under significant pressure. Does the current valuation reflect that?
Target is the retailer that has been left behind, with Walmart and Costco enjoying a massive uplift in multiples and Target experiencing only modest share price gains that haven’t beaten the index. Part of this is because of a lack of moat and some brand confusion, with Target pushing a value strategy on one hand and yet a more upmarket feel than Walmart on the other. With sales growth having stagnated but earnings on the up, is there an opportunity here for Target as the forgotten retailer?
Airbnb has suffered a significant sell-off in the share price, with the market very worried about growth prospects. This is the danger of a platform company trading at high valuation multiples that assume ongoing levels of growth. If you look deeper though, Airbnb is a profitable business that has carved out a strong market position. Are they getting it wrong lately though, with a position that puts hosts above travelers? Or are there other reasons for the slowdown?
Platform businesses are fascinating things that can make a great deal of money at scale. This week in Magic Markets Premium, we covered Uber and its emergence as a financial butterfly in literally the last year. To keep the platform theme going, we decided to cover Airbnb and Shopify in this week’s free Magic Markets show, made possible by B2IT.
We first covered MercadoLibre in March 2023. We talked about Alibaba meeting Amazon in Latin America. Mostly, we were just highly impressed with the cohesive ecosystem that the company has built. We were also big fans of the commitment to profitability, something that many tech companies could learn something from. With Argentina in the headlines and renewed focus on the broader LatAm region, how has the business performed this year?
As the world’s largest owner of logistics and warehousing property, Prologis has been enjoying the tailwind from a structural shift to eCommerce. With a strong balance sheet and lots of strategic optionality, the company has achieved surprising growth from an asset class that many see as boring.
Use the podcast player below to listen to our discussion on MercadoLibre and its Q4'22 result, which accompanies the detailed write-up below: (Date of report: 2 March 2023) In 2022, MercadoLibre achieved three big milestones that they describe as 100, 10 and 1. That means $100 billion in payments processed, $10 billion in revenue and $1 billion in EBIT. Latin America’s leading eCommerce platform is more than just Amazon or Etsy. There’s a strong flavour of Tencent going on here, which isn’t a bad thing. Perhaps most of all, the similarities to Alibaba are striking. Operating in a high growth region [...]
Use the podcast player below to listen to our discussion on Shopify and its Q1’22 result, which accompanies the detailed write-up below: (Date of report: 12 May 2022) Like Intuit, Etsy and other platforms aimed at creators and entrepreneurs, Shopify is a platform that hopes to be the shovel in the gold rush. The challenge is that sometimes, there are just too many shovels. With a share price that has spectacularly collapsed, Shopify is on the shopping list for some growth investors. Should it be, though? We decided to take a closer look at the company that powers a partner ecosystem [...]
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