Jun. 26 at 7:58 PM
$KEQU to put this move into context, last December (FQ2) the stock made an almost identical move from ~
$43 -->
$54 when EPS sequentially went from
$0.93 to
$1.42. At that time it seemed like ~
$6 in EPS would be obtainable over time and the stock continued to ~
$70 - a bit over 10x eps potential
This quarter EPS has sequentially gone from
$1.09 to
$1.95, a higher jump from a higher base, and with the transaction now pretty much in the rear view the sustainability of this EPS is increasingly likely.
The EBITDA, below, is much more dramatic - because interest expense post transaction is significant the real earnings potential of this is obscured. Absent interest expense EPS is well over
$2.50 a quarter, and as they pay down debt EPS will formulaically rise
Seems crazy to buy a stock up 35%, but you can understand why nobody is selling something trading at an unlevered ~5x EPS with a clear path to that unlevering and incremental operating leverage incoming