FLWS pitch:
– E-commerce platform providing flowers and gifts across several brands.
– Everybody and their mother wants to bet against FLWS for the wrong reasons.
– Immediate catalyst for the stock to re-rate.
– FLWS is oversold as an ill-founded assessment of data from credit card panels points to weak Valentine’s Day sales.
– However, primary research shows a very positive picture for company’s performance during the quarter.
– The bar is set especially low.
– Recent capex and gross margin headwinds are set to shift into meaningful tailwinds over the coming quarters.
– Expected to return to pre-Covid margins in the medium term.
– Margins and profitability consensus estimates are too low.
FLWS valuation:
– Set to earn $170m in EBITDA in FY24.
– This translates into $1.99/share in FCF.
– Historical average multiple of 8.5x EBITDA (or 12.2x FCF), implies a $24/share target
Exp. gain: 110%
Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/1-800-FLOWERS.COM/4182524451