Last quote by Mark Mahaney
Mark Mahaney quotes
One of the challenges of Twitter, really from the beginning, is they've had so much volatility of their management team. At the end of the day you are betting on, or investing in, these individuals, and the individuals keep changing. So I think the narrative unfortunately gets worse.
Most of [the] money they're spending goes on content and marketing. The infrastructure costs, the bandwidth costs, it's like 3 or 4 percent of their total cost structure. So it's pretty small. It probably wouldn't materially impact the Netflix P&L [profit and loss statement] or the Google or the Facebook P&Ls.
They're going to experiment for a while. Why shouldn't they? They've got a billion people that come to their site on a monthly basis. That core advertising business – that's doing super well for them. I don't think they should steer too far afield from that.
The core advertising business – the real reason that we're still bulls on the stock – remains so consistent. This is now 19 quarters in a row of 20 percent year-over-year growth. For that reason, and almost for that reason alone, this thing remains a long for us. It's our number 2 pick in the space.
Probably the biggest reason is just the size of the asset. With $56 billion market cap, there are very few names who could actually make that deal even plausibly work – maybe a Disney, maybe a Google, maybe an Amazon, maybe an Apple.
Can you actually show that you're leading people to takeouts, to doing restaurant reservations, to actually lining up directly with plumbers in the area? Not just advertising, but can you show transactions revenue? If they prove that, I think they become more viable as a takeout candidate.
We've had three, four, five years of advertisers working with Twitter data and the fact that they're moving away from Twitter has to tell you something about the value of that data to an advertiser. To a tech company, that's something different.
If there's any lesson from Twitter from the last two to three years is that the data to an advertiser has not been that helpful, has not been that useful and that's why advertisers have been leaving Twitter and that's why the revenue growth is decelerating.
It could be a double in three years.
The closest company would be Hulu, with about 10 million paid subscribers. I think one of those five mini-bundles in the future will be Netflix.
It could be a double in three years. We think this thing can generate $10 in earnings [per share], GAAP earnings, by 2020. We think the market would put a 20 [price-earnings] multiple on something like this. We think it could be a $200 stock.
If they can make sub numbers, there's a lot of upside movement in this stock. We still think they have pricing power.
I think one of those five mini-bundles in the future will be Netflix.
We think it's going to double to be 150 to 160 million [global] subscribers in a couple of years.
Amongst the FANG names, this is the one that's most underperformed.
[But] I don't think Amazon is a competitive threat.
There's a deceleration debate on Google, as there is on Facebook, and almost a certainty in the markets that growth rates have to decelerate sharply. We don't think that's the case.
What's good for Google and Facebook has not been good for the Yahoos and the Twitters of the world.
This sustains as a 20 percent revenue grower with expanding margins in the core Google business for their foreseeable future. We like the stock.
We've seen very consistent growth, at least from the leaders in the Internet space.
Since the bottom, we've seen stocks with strong and/or accelerating fundamental trends outperform, while those with business model, product, execution and/or integration risk have materially underperformed.
And FB is extremely well positioned for this.
Investor expectations are fundamentally very low for Yahoo. I'd say fundamentals have been weak for a substantial period of time, i.e. no growth…. The play on the stock is much more focused on the mechanics of the sale.
Hotel industry data from Smith Travel Research provide an overall negative read-thru for Priceline, with occupancy rate growth and ADR (average daily rate) growth data in both the U.S. and in Europe showing decelerations.
If – it's a big if – if Facebook continues to execute at this level, you could see a tripling in their revenue growth over time, the growth rate is sustainable, and you could buy the stock even today.
This is the highest-bar stock of the internet space. An in-line quarter will not cut it for Facebook, the stock, as a trade.
When the misses are more headline than real. And fundamental trends are intrinsically impressive. And valuation looks compelling. Then that's when you buy.
If they're able to come in line with their guidance ? and they're able to meet their 3 million plus international (subscriber) number ? then the story will be intact. And the stock should go up higher from that.
In terms of long-term valuation, the way we think about the stock is we think this is a company that can generate $10 [annual earnings per share] in long-term earnings power.