lemon50

[lemon50 @lemon5087]

@benoitz Did you sells calls against this position

[Audit The Herd @AuditTheHerd]

Alright so everyone is freaking out about $BE down almost 9% after earnings and asking what happened.

Honestly this was a great quarter. Like a really great quarter. $1.23 billion in revenue, up 138% year over year. 94 cents non GAAP when street was at 69 cents. They even raised guidance again. On sales and earnings this was a blowout.

The selloff is all cash flow. If you look at that cash flow statement, operating cash flow was negative $27 million. So of course free cash flow is negative too. Market sees negative cash flow and hits sell.

But look at WHY it was negative. Accounts receivable was negative $605 million. That is the whole story right there. They booked a ton of revenue, like record revenue, but they just haven't collected the cash yet. And inventory was negative another $170 million because they are building like crazy to keep up.

I am not saying this is a broken business. It’s just currently a business outrunning their cash collections. You can even see the cash is already coming. Unearned revenue was up $309 million and payables were up $184 million. Customers are paying upfront and it will show up next quarter.

Most people only look at EPS and rev + guidance but at the end of the day a business is worth its projected FCF discounted at a WACC. Great quarter, I expect their working capital to normalize but there is some reason for price action.

[lemon50 @lemon5087]

@mathlonning Unusual not to see TMDX flights accelerate into Q4 now that they’re out of the seasonality window. Its actually decelerated. It’s hard to justify holding this name as Waleed has clearly biten off more than he can chew.