Snap One Holdings (SNPO), mcap=$856m, price $10.84 vs $14.01

Pitch: Leading distributor and manufacturer of products for the smart home industry – supplies 16,000 professional integrators who then install systems. Its widely used smart home software platform created significant lock-in with other constituents in the industry SNPO commands strong pricing power by sitting in the middle of the highly fragmented manufacturer as well as integrator/consumer markets. Expected to grow revenue and EBITDA at double-digit CAGRs. Current global supply chain challenges are likely to remain a modest headwind.

Valuation: SNPO trades at 10.5x 2023 TEV/EBITDA and 12.5x 2023 P/E, a significant discount to intrinsic value as well as peers. Specialty distributor comps like POOL, SITE, and WSO trade at high-teens multiples on TEV/EBITDA and mid-20s multiples on P/E.

Exp. gain: 25%+ IRR over a 5 year time horizon.

Full SNPO write-up (free guest account required):

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