Q: Hi Team,
I am down on NBLY big time and would like to get your thoughts if it is a buy, hold or sell and your rationale please.
Good work guys, as always.
H
I am down on NBLY big time and would like to get your thoughts if it is a buy, hold or sell and your rationale please.
Good work guys, as always.
H
5i Research Answer:
NBLY has been mostly on a downtrend since its IPO in mid-2021, but it pays a small yield of 1.2%, has shown excellent growth rates, and is nearing profitability. Its balance sheet has grown since IPO, its free cash flow partly goes to dividends and mostly to acquisitions, and its valuation is quite cheap with a forward sales multiple of 0.7X. Its results have been mostly good, but it is a risky name with a smaller market cap of $660M. In a high interest rate environment, unprofitable names are not in favor, however, we feel this sentiment will eventually shift as investors seek growth names. We are comfortable holding this name for now and expect profit margins to improve in the coming quarters.