Nov. 26 at 5:06 AM
$ALAR will it pop or will it drop? In recent weeks, many small cap stocks have dropped even after what should have been seen as very good earnings reports.
We know what the consensus is far revenue andvearnings, and the AI processes that generate quick articles will focus blindly on these numbers, yet they will miss the point with ALAR.
$ALAR is unusual for having a business model that is very scalable. It combines high fixed costs and low variable costs, with fixed costs being front loaded capital expenditures and setups. In such a company, whether the earnings are 0.04 or 0.03 or 0.05 is of lesser importance because the focus should be on cash flows and EBIDTA instead.
With large charges for depreciation and amortizations, the valuation question is what is EBIDTA and what multiple of EBIDTA should the share price be? We will know trailing EBIDTA but we can still only estimate forward cash flows.
Earnings can hit or miss, but cash flow is the real story. Extremely bullish!
