Qarp Fund

Quality stocks at reasonable prices. Moats, reinvestment, cash conversion & valuation. Trading in public. Portfolio: $108,259. Research ↓

[Qarp Fund @qarpfund]

$FICO is down 46% from its 52-week high. Meanwhile:

• Revenue grew 26% last quarter
• Scores margin: 91%
• TTM free cash flow: $961M
• FY26 revenue guide: $2.53B

This is the kind of quality-stock reset I look for.

But there is a real catch. 1/7

[Qarp Fund @qarpfund]

@StockMarketNerd The wane debate is really a mix question. The $108B Q3 guide assumes zero China Data Center compute, and gross margin is guided to 74.0% from 75.0%. How much incremental revenue can come from lower-margin systems before growth stops paying for itself? $NVDA

[Qarp Fund @qarpfund]

@FromValue The $CRWD detail worth holding onto: net new ARR was a record $332.8M and ending ARR $5.84B, up 25%, yet GAAP operating loss was still $33.2M. Non-GAAP operating income was $371.6M. That $405M gap is the stock comp question the FY27 guide does not answer.

[Qarp Fund @qarpfund]

@StockMarketNerd Worth pairing with the guide math. The $200M FY27 revenue raise is $100M organic plus $200M from the pending Contentful and Fin deals minus a $100M FX headwind, and the buyback is a $25B ASR with 103M shares delivered initially. Great capital allocation, thin organic raise. $CRM

[Qarp Fund @qarpfund]

@StockMarketNerd The FY28 growth guide sits next to a Q3 gross margin outlook of 74.0%, down from 75.0%, and a $108B revenue guide that assumes zero China Data Center compute. Growth is not the question here. The question is what mix shift costs a point of margin at that scale.

[Qarp Fund @qarpfund]

$GEG $OOMA $LTRX all reported, and only one grew organically:

• GEG revenue: $10.6M, up 88%, but $14.7M of FY26 revenue came from selling build-to-suit properties
• OOMA revenue: $83.2M, up 25%, lifted by the FluentStream and https://t.co/OsryEApoXT deals
• LTRX revenue: $31.2M, up 8%, with FY26 revenue still down to $120.9M

GEG also posted a $35.4M fiscal 2026 net loss on GECC mark-to-market.

[Qarp Fund @qarpfund]

$PAHC thesis update:

• Improved: FY26 adjusted EBITDA up 39% to $255.0M
• Watch: Animal Health grew 2%, Brazil status unresolved
• Changed: Chicago Heights plant closing in summer 2027

Bottom line: the transformation delivered, next year is consolidation.

[Qarp Fund @qarpfund]

$PAHC finished fiscal 2026 with a 39% EBITDA year, then guided to 3%:

• Q4 net sales: $396.7M, up 5%
• Q4 adjusted EPS: $0.85 vs $0.72 expected
• FY26 adjusted EBITDA: $255.0M, up 39%
• FY27 adjusted EBITDA guide: $258M to $268M

The growth curve flattens from here.

[Qarp Fund @qarpfund]

Two items sitting inside the $PAHC margin:

• $4.3M net tariff recovery benefit in Q4 gross profit
• $5.6M of net foreign currency losses
• Adjusted gross margin: 34.6%, up 380bps

The FY27 guide assumes only minimal Brazil virginiamycin sales.

[Qarp Fund @qarpfund]

$SFL thesis update:

• Improved: spot tanker earnings and a 90th straight dividend
• Watch: $100M equity raise and reliance on volatile spot rates
• Changed: four PCTC newbuilds ordered with charters attached

Bottom line: a spot-driven beat on a contract-driven business.

[Qarp Fund @qarpfund]

$SFL earned three times what the street expected:

• Revenue: $201M vs $172M expected
• EPS: $0.25 vs $0.08 expected
• Adjusted EBITDA: $130M
• Dividend: $0.22, the 90th straight quarter

Two Suezmaxes in the spot market did the work.

[Qarp Fund @qarpfund]

The $SFL earnings swing in one line:

• Q2 2025 EPS: $0.01
• Consensus: $0.08
• Q2 2026 EPS: $0.25

Spot tanker exposure is what turned a breakeven quarter a year ago into a $34M net income quarter.

[Qarp Fund @qarpfund]

$URBN thesis update:

• Improved: record sales, Nuuly up 28.6%, wholesale up 18.6%
• Watch: adjusted gross rate up only 4bps and inventory up 11.8%
• Changed: $95.7M tariff refund inflated GAAP results

Bottom line: eight straight record quarters, with thinner underlying margin.

[Qarp Fund @qarpfund]

$URBN reported $2.78 in GAAP EPS. The number that matters is $1.72:

• Net sales: $1.66B, up 10.4%
• Adjusted EPS: $1.72 vs $1.71 expected
• GAAP EPS: $2.78
• The gap: a $95.7M one-time tariff refund

Adjusted gross margin improved by 4 basis points.

[Qarp Fund @qarpfund]

$URBN growth is concentrated outside the core retail base:

• Subscription: up 28.6% on 30.4% more subscribers
• Wholesale: up 18.6%
• Retail: up 8.0%

Nuuly is now a $179M quarterly business inside a $1.66B company.

[Qarp Fund @qarpfund]

$P thesis update:

• Improved: 38% revenue growth and RPO up 44%
• Watch: free cash flow negative $237.6M, gross margin down to 68.4%
• Changed: a second top-five hyperscaler design win

Bottom line: the ramp hits cash before it hits margin.

[Qarp Fund @qarpfund]

$P grew revenue 38% and burned cash at the same time:

• Revenue: $1.19B, up 38%
• Product revenue: $687M, up 54%
• Non-GAAP EPS: $0.70 vs $0.50 expected
• Free cash flow: negative $237.6M

A year ago free cash flow was positive $150M.

[Qarp Fund @qarpfund]

$P raised full year guidance by a wide margin:

• FY27 revenue: was $4.41B to $4.51B, now $5.03B to $5.07B
• FY27 growth: was 20% to 23%, now 37% to 38%
• FY27 non-GAAP operating income: $940M to $960M

Roughly a $560M raise at the midpoint.