PRIOR RESEARCH SAMPLES
Short Harley-Davidson (HOG)
“Harley-Davidson is a secular decliner that is valued by the Street on P/E and currently trades at 7.5x consensus F25E EPS (historical range is 6x-10x from 2022-24). Our research suggests 2026 revenue and EPS will fall short of consensus estimates by 18-24% and 40-60%, respectively, as the company is likely to face 6-10% per year revenue declines through 2026, followed by 4-6% annual declines thereafter. Applying P/Es of 7.0-7.5x our bear and base case assumptions suggests 30-55% downside vs. 25% bull case upside assuming stable revenues and an 8.5x P/E.”
Short MarketAxess (MKTX)
“Prior to Covid, MKTX was a near monopoly with double-digit growth, high ROICs, and an under-penetrated TAM, trading at ~60x EPS. Today, competition has intensified and growth has been muted since 2021, but the stock still trades at 37x EPS, as the Street projects a return to double-digit growth. In our bear and base cases, growth remains in the low-to-mid-single digits due to slowing penetration, share losses, and pricing pressure. Peers with similar growth rates trade at 20-25x. Using these PEs implies 30-50% downside (vs. 20% bull case upside).”
Long Planet Fitness (PLNT)
"Our base and bull case scenarios have PLNT’s SSS accelerating to 9-13% (from 6%) and margins returning to 34%+ (from 25%), which drives 2026 EPS 30-50% above consensus. Prior to Covid, PLNT enjoyed a premium PE – averaging 42x in 2019 – stemming from its high ROICs (25-30%) and significant growth potential (note: the target for U.S. clubs was recently raised to 5k from 4k). More recently, given the disappointing unit growth, PLNT’s PE has compressed to 25-30x. In our base and bull cases, applying PEs of 25-30x, suggests 50-110% 12-18 month upside (vs. 15% downside)."
Long RBA Global (RBA)
"Consensus blindly aligns with the merger proxy targets (less the IAA customer loss), giving RBA no credit for robust recent trends or the turnaround that our deep dive revealed. RBA’s current 22x P/E is a simple blend of its legacy 25-30x multiple and IAA’s depressed, pre-bid ~15x P/E. With improving KPIs, IAA is likely to grow more in line with Copart (ex the customer loss) and narrow the valuation gap (note: Copart trades at 34x EPS). Our base and bull case assumptions imply 2025 EPS will exceed consensus by 25-35%. Applying P/Es of 22-27x implies 50-100% upside, against 10% bear case downside."
Short Xero (XRO AU)
"Although bulls expect Xero to maintain robust subscriber and ARPU growth in its core markets (ANZ and UK) while achieving accelerating US growth, our deep dive suggests that Xero is facing mounting challenges in its core markets, is unlikely to drive an inflection in US growth (on a standalone basis), and the prospects for the Melio acquisition are likely to disappoint. In our base and bear cases, standalone Xero revenue growth decelerates to 11-13% vs. 18% consensus by FY28 (FYE Mar), and Melio falls short of revenue synergy targets. Applying EV/Revenue multiples of 5.0-6.5x implies 25-45% downside in ~12 months (vs. 15% upside using 9.0x)."