henrysalt Posted August 5, 2020 Share Posted August 5, 2020 There are lots of unknowns due to the pandemic, but this is still a high ROIC company. 1. Xpel was just added to Russell 2000 and 3000 indices at the end of June. Price didn't really reflect addition at the time. 2. Vehicle sales picking up according to latest BEA report. 3. Parts of Asia including China vehicle sales have been picking up. Look at China MeiDong Auto Holdings as a proxy. I didn't estimate just how many people would be turned off by taking public transportation. 4. High margin business. They have been able to grow from mid-twenties to high-thirties...40% margin is within reach. 5. Quarterly run rate of $6MM-$7MM for right now with covid in the background. EV/EBITDA = 18x-20x 6. Net debt moving from -$3MM to +$4.3MM. This is not easy for a micro-cap company. If they can put cash to work into installer/distributor then EBITDA going up $1MM-$2MM. 7. M+A plus DCF = 1B microcap company by 2025 is reachable equating to 4x-6x 2025 sales. Link to comment Share on other sites More sharing options...
gary17 Posted August 5, 2020 Share Posted August 5, 2020 if anything i've learned from the pandemic is that marco is too hard... who would have thought tech companies become so valuable during this time Apple selling so many iphones even during store closures. and i thought with all the people losing jobs; vehicle sales would be down... well, turns out people don't want to take public transit... thanks for your insight! PS at $ 1B i don't know if it is still a 'microcap' lol Link to comment Share on other sites More sharing options...
snowball82 Posted August 5, 2020 Author Share Posted August 5, 2020 I agree Gary macro forecast is too hard !! Much better to be focused to find quality companies or at least recurring revenues/ high margins. Link to comment Share on other sites More sharing options...
A Dhandho Investor Posted August 12, 2020 Share Posted August 12, 2020 Outstanding Q2 results: XPEL, Inc. (Nasdaq: XPEL) (the "Company"), a global provider of protective films and coatings, announced results for the second quarter and first six months ended June 30, 2020. Second Quarter 2020 Highlights: Revenues increased 19.0% to $35.8 million compared to second quarter 2019 Net income grew 32.1% to $4.0 million, or $0.14 per basic and diluted share, compared to $3.0 million, or $0.11 per basic and diluted share, in the same quarter of 2019 EBITDA grew 29.2% to $5.7 million, or 15.8% of revenues compared to $4.4 million in second quarter 20191 First Six Months Highlights Revenues increased 17.1% to $64.2 million compared to the prior year period Net income increased 14.7% to $5.6 million, or $0.20 per basic and diluted share, compared to $4.9 million, or $0.18 per basic and diluted share, in the same period of 2019 EBITDA grew 14.0% to $8.2 million, or 12.8% of revenues, as compared to $7.2 million in the same prior year period1 Ryan Pape, President and Chief Executive Officer of XPEL, commented, "We're very pleased to have achieved strong second quarter results even as the world continued to contend with the impact of the COVID-19 pandemic. As we moved through the quarter, following early lockdown-related declines, we saw incredible top line resilience, led by the United States and China, which culminated in an all-time record revenue month in June. Early in the quarter, our team took swift action to manage through the crisis. These actions, along with this top line recovery, drove substantial net income growth and record operating cash flow while avoiding any layoffs or furloughs. While the economy continues to face uncertainty related to future COVID-19 impacts, we are cautiously optimistic that our second quarter momentum will continue as we move through the rest of the year." Link to comment Share on other sites More sharing options...
Libs Posted August 12, 2020 Share Posted August 12, 2020 Not bad for a quarter where auto sales collapsed. The conference call was fairly ebullient. Stock is up 26% to $26. Market cap is now $741 MM. They made $4MM last quarter. This has been a grand slam but I think I need to repeat my previous mistake of selling off some shares. Link to comment Share on other sites More sharing options...
henrysalt Posted August 12, 2020 Share Posted August 12, 2020 Forget what I posted earlier about $1B by 2025! At this rate it'll be next week. :) Congratulations to all that held from the start of this thread, but I do believe it's time to take some off the table at this valuation. Link to comment Share on other sites More sharing options...
movys Posted August 13, 2020 Share Posted August 13, 2020 Forget what I posted earlier about $1B by 2025! At this rate it'll be next week. :) Congratulations to all that held from the start of this thread, but I do believe it's time to take some off the table at this valuation. I strongly disagree with this assessment and actually think the stock is possibly more undervalued now than it was yesterday before these numbers were public knowledge. XPEL is finally inflecting from a simple organic growth story to a more sustainable, diversified growth story with a credible M&A roll-up opportunity. I believe this report demonstrated the earnings power of this business is much stronger than the market was giving them credit for, and I don't think the market is currently giving them any credit for the highly accretive M&A in our near future. This adds an additional leg to the growth story. Finally, the architectural business is growing strongly and will be broken out separately at some point. I think we are maybe 3rd or 4th inning here. Link to comment Share on other sites More sharing options...
valueinvestor Posted August 13, 2020 Share Posted August 13, 2020 Forget what I posted earlier about $1B by 2025! At this rate it'll be next week. :) Congratulations to all that held from the start of this thread, but I do believe it's time to take some off the table at this valuation. I strongly disagree with this assessment and actually think the stock is possibly more undervalued now than it was yesterday before these numbers were public knowledge. XPEL is finally inflecting from a simple organic growth story to a more sustainable, diversified growth story with a credible M&A roll-up opportunity. I believe this report demonstrated the earnings power of this business is much stronger than the market was giving them credit for, and I don't think the market is currently giving them any credit for the highly accretive M&A in our near future. This adds an additional leg to the growth story. Finally, the architectural business is growing strongly and will be broken out separately at some point. I think we are maybe 3rd or 4th inning here. Couldn’t have said it better. Probably worst time. If you invested for the business quality, then a slight overvaluation shouldn’t deter you. It’s hard to replicate a compounding machine. Not an owner in the name, but for me it’s a bit niche, probably due to my lack of understanding of the business. Link to comment Share on other sites More sharing options...
henrysalt Posted August 13, 2020 Share Posted August 13, 2020 Yes - the story for credit roll-up via M&A is there. Hopefully there is more analyst coverage going forward as well. EV/EBITDA > 20x right now. What would you peg earnings at in 2022-2025? Link to comment Share on other sites More sharing options...
LanceSanity Posted August 14, 2020 Share Posted August 14, 2020 I sold all my shares (about 20,000) in the $2s and $3s, stopped following stocks for many years. Oops. Link to comment Share on other sites More sharing options...
gary17 Posted December 11, 2020 Share Posted December 11, 2020 this company has done well. is the story just getting started or this is the peak. Link to comment Share on other sites More sharing options...
A Dhandho Investor Posted December 11, 2020 Share Posted December 11, 2020 this company has done well. is the story just getting started or this is the peak. Just getting started. Increased PPF penetration, potential M&A, window film, lot's of avenues to further grow the business. Link to comment Share on other sites More sharing options...
henrysalt Posted March 8, 2021 Share Posted March 8, 2021 Earnings this Thursday. I expect the growth story to continue. Auto sales have continued to be strong. If margins are consistently better then we should continue to see several areas of growth for the business. Link to comment Share on other sites More sharing options...
Libs Posted April 1, 2021 Share Posted April 1, 2021 (edited) Taking a rough stab at valuation here. XPEL's current run rate for protective film ( which is 73% or revenue) is $140MM. At $200 a pop, that's 700,000 installs last year. So 1% of global new autos were wrapped with XPEL. How big could the market get? I've read Colorado and Utah have hit 30-40%. But those are rich, saturated areas. Suppose global reach eventually hit 10%; and XPEL got half of that ( their current market share is growing and estimated at 35%). Assuming global auto gets back to 90MM new cars this year, and stays there.....thus XPEL would do 4.5mm installs. at $200 a pop, that's 900MM revenue. Maintain current 12% net margins = ~$100MM net income. Current market cap is $1.5B, so 15 X very optimistic future earnings. They're going to have to grow their newer lines of business, that other 23% of revenue, a lot. FWIW. ......thoughts? E Edited April 1, 2021 by Libs Link to comment Share on other sites More sharing options...
gary17 Posted April 1, 2021 Share Posted April 1, 2021 32 minutes ago, Libs said: Previous Page Next Page Previous Page Next Page Taking a rough stab at valuation here. XPEL's current run rate for protective film ( which is 73% or revenue) is $140MM. At $200 a pop, that's 700,000 installs last year. So 1% of global new autos were wrapped with XPEL. How big could the market get? I've read Colorado and Utah have hit 30-40%. But those are rich, saturated areas. Suppose global reach eventually hit 10%; and XPEL got half of that ( their current market share is growing and estimated at 35%). Assuming global auto gets back to 90MM new cars this year, and stays there.....thus XPEL would do 4.5mm installs. at $200 a pop, that's 900MM revenue. Maintain current 12% net margins = ~$100MM net income. Current market cap is $1.5B, so 15 X very optimistic future earnings. They're going to have to grow their newer lines of business, that other 23% of revenue, a lot. FWIW. ......thoughts? E Previous Page Next Page Previous Page Next Page Are they $200 a pop ? I always assumed they were $2000 a pop.... Link to comment Share on other sites More sharing options...
Libs Posted April 1, 2021 Share Posted April 1, 2021 1 hour ago, gary17 said: Are they $200 a pop ? I always assumed they were $2000 a pop.... That's the total install. The film is only 10% of the cost. Link to comment Share on other sites More sharing options...
gary17 Posted April 1, 2021 Share Posted April 1, 2021 23 minutes ago, Libs said: That's the total install. The film is only 10% of the cost. Right, but i thought Xpel also owns their own shops so maybe their revenue is more than $200? Link to comment Share on other sites More sharing options...
Libs Posted April 1, 2021 Share Posted April 1, 2021 11 minutes ago, gary17 said: Right, but i thought Xpel also owns their own shops so maybe their revenue is more than $200? Good point. Most of their sales are though 3rd parties though. I don't know the split. Link to comment Share on other sites More sharing options...
henrysalt Posted May 10, 2021 Share Posted May 10, 2021 Another fantastic quarter. Quickly approaching $2B market cap. Link to comment Share on other sites More sharing options...
gary17 Posted May 11, 2021 Share Posted May 11, 2021 finally sold most 3/4 of my position in Xpel after thinking at 10x revenue, the valuation is quite rich. my first 18 bagger LOL Snowball - i owe you a Michelin star meal next time i'm in Quebec... when we are allowed to travel again! Link to comment Share on other sites More sharing options...
snowball82 Posted May 14, 2021 Author Share Posted May 14, 2021 On 5/11/2021 at 12:38 PM, gary17 said: finally sold most 3/4 of my position in Xpel after thinking at 10x revenue, the valuation is quite rich. my first 18 bagger LOL Snowball - i owe you a Michelin star meal next time i'm in Quebec... when we are allowed to travel again! Thank you Gary17, you are very kind to write this here. Congratulations for your 18 baggers, you are a very good investor and more than that a great friend to have. They got an impressive execution since the first post (2014)! Link to comment Share on other sites More sharing options...
henrysalt Posted May 25, 2021 Share Posted May 25, 2021 So now the 3rd and 4th innings continue with Xpel acquiring PermaPlate Film which would add $25MM in revenue for 2021. EBITDA goes up $6MM for the year after costs. If they can keep rolling these companies together is $3B market cap far behind? Link to comment Share on other sites More sharing options...
Libs Posted May 26, 2021 Share Posted May 26, 2021 Purchased for $30 MM in cash. Quite a bargain if it pans out. Link to comment Share on other sites More sharing options...
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