Five Points Capital

Aspiring philanthropist. Personal views only. Not investment advice. Posts are not a recommendation to buy or sell any securities.

[Five Points Capital @fivepointscap]

@merovingian_man Yeah probably

[Five Points Capital @fivepointscap]

I’m honestly surprised $CRWD is only down 9%.

I just don’t see how the combination of negative operating income (for 7 straight quarters), 25% revenue growth, and 4% dilution gets you to 40x earnings.

I get that they have a lot of opportunity ahead of them and they’re apparently the best at what they do. But the valuation is so extreme and I’m not seeing the numbers to support it.

Thoughts?

[Five Points Capital @fivepointscap]

@ZackStacksKap And this assumes high growth for a very long time plus no dilution. The share count could be 350M+ by then.

Sure, they could be net buyers of their own stock at some point too, but I’m guessing that share count is higher in 15 years than it is today

[Five Points Capital @fivepointscap]

**Meant 40x SALES, not EARNINGS **

[Five Points Capital @fivepointscap]

@JonahLupton Yup same haha

[Five Points Capital @fivepointscap]

@BrokenToysInv If they were growing like crazy, I’d get it. If they were growing 50, 60% okay. Enterprise cybersecurity is a massive field with tons of legacy providers that Crowdstrike can disrupt.

But their revenue is a low base and they’re only growing 25%? Should be 10-15x sales. 20x max

[Five Points Capital @fivepointscap]

@piques15 Can you explain what you mean by that?

[Five Points Capital @fivepointscap]

@Good_To_Sell Perhaps… just don’t like the r/r here.

They would also need to ~20x revenue at least to do that. They won’t 20x if they’re only growing 25%

[Five Points Capital @fivepointscap]

@JonahLupton Outrageous for a 25% grower

[Five Points Capital @fivepointscap]

@davey_juice Yeah that seems more reasonable

[Five Points Capital @fivepointscap]

@ozpollyanna Look at crowdstrike’s performance since July 2024… short term noise ultimately

[Five Points Capital @fivepointscap]

$META Business Agent is their ChatGPT moment. I don’t think even bulls understand how big this is.

“Now, a clothing shop in Birmingham or a bakery in Sao Paulo can offer the same always-on, highly personalized experience as a major brand.” - Zuck

The biggest problem with AI right now is usability. If you’re a restaurant owner, you’re too busy to learn how to setup AI agents. And you don’t want some “AI consultant” coming in to charge you $20k for something you’re not sure will even work.

Meta Business Agents will just work. Like an iPhone. That convenience and simplicity is what small business owners desperately want.

[Meta Newsroom @MetaNewsroom]

Introducing Meta Business Agent: AI that lets businesses show up for their customers as if they had an infinite team behind them answering questions, making product recommendations, booking appointments, closing sales, and more.

https://t.co/wCFU7OWXQv

[Five Points Capital @fivepointscap]

@unusual_whales Lol what can you even believe

[Five Points Capital @fivepointscap]

@CanadienFederal I just backed into EPS with my model and it comes in around $230 in 2032 and $273 in 2033

[Five Points Capital @fivepointscap]

$MELI

I was reworking my bull case DCF model and playing around with some numbers. I wanted to share the results, you can choose for yourself if the assumptions are reasonable or not.

- Revenue compounds at 17.0% per year from $28.9B in 2025 to $304.5B in 2039

- Operating margins expand from 11.08% in 2025 to 18.0% in 2039

- Capex as a % of revenue bounces around between 2.5% and 5.5% throughout

If bought at the current price of $1,663/share, this would produce an 18% annualized investment return. In 2039, this results in a $1.02T market cap, and a share price of $19,936/share. Good for a total return of 1100%.

Other numbers: Net debt of $6.7B, share count of 50.7M (flat, no dilution no buy back), 30.00% tax rate, 4.5% terminal growth rate, D&A as % of revenue 2.75%.

Please share your thoughts, critical or otherwise. I’m always looking for ways to become a better investor!

[Five Points Capital @fivepointscap]

@not_law12 Fair points, I appreciate the convo!

[Five Points Capital @fivepointscap]

@drayinvests Only a matter of time

[Five Points Capital @fivepointscap]

@TheWiseIC You don’t see how a small business owner would pay to have 24/7 customer service done for them?

[Five Points Capital @fivepointscap]

@nikbot05 Exactly. There’s no customer acquisition cost. The tools will just start appearing and businesses will start using them. Completely frictionless.

[Five Points Capital @fivepointscap]

You’re still missing the point. These are not free tools to keep you on a platform.

This is an entire suite of products and services that will effectively run your business. 24/7 automated customer service is not going to be free lol.

It will all be usage based. The customer service, social media management (actually making posts), general AI assistant, etc.

Meta is not spending hundreds of billions on capex to keep you on Instagram longer. That may be a small piece of it, but their endgame here is to essentially run a large share of the small businesses in the world. Also, not every business is an online business. We’re talking about tens of millions of bars/restaurants, shops, hair salons, convenience stores, etc.

What is Shopify gonna do? Pay Anthropic to do this for them? And what happens when Meta decides to start fulfilling the orders themselves à la TikTok Shop?

[Five Points Capital @fivepointscap]

This completely misses the entire point and could be another post.

It’s not an “AI that answers Qs”. It’s AI automated customer service through WhatsApp, AI ad creation tools backed by Meta’s data, AI brand management tools for exactly where you manage your brand (IG/FB), an AI that answers questions, and a lot more.

These businesses are already using Meta’s Platforms. The tools will just start appearing for use and businesses will start using them. In what world is Zendesk going to compete with that?

[Five Points Capital @fivepointscap]

@not_law12 Two different things. You’re talking about the agentic commerce thing that connects to Shopee, Shopify, and others.

I’m talking about AI agents for business. This has nothing to do with ecommerce platforms.