Investing — 2018-10-04

by shwolff

Today’s selection of articles:

  1. How to build a revenue model: A step-by-step guide“, by Avadhut (Finance Walk, ????).
  2. Too much goodwill: A red flag for your portfolio“, by Sam McBride (New Constructs, 2015-07-01). As I understand it, the key risk of goodwill (e.g., the amount a company overpays in an acquisition) is that it’s an estimated “value” to the company itself that could be adjusted (down) at any point.
  3. Economic earnings” (New Constructs, ????). A better measure of a company’s earnings than the typically reported accounting earnings.
  4. What you need to know about Eventbrite’s IPO“, by David Trainer & Great Speculations (Forbes, 2018-09-20). The best analysis I’ve seen of Eventbrite’s (EB) financial statements to date. Some analysis is extremely bearish: In one case, a current share price of $4 per share is estimated. (This assumes 20% annual revenue growth; for comparison, from 2016 to 2017, EB’s revenue growth was just over 50%, according to their S-1.) The article does a great job clarifying the implications (and accuracy) of EB’s content creators, acquisitions, and free cash flow.