Fresh off the release of my latest article, "A Breakdown Of The 3rd Great Console War", I set out to delve deep into the financials of both Sony (SNE) and Microsoft (MSFT) to put a price tag not just on the companies' respective gaming consoles, but on the firms as a whole. Many of the points I made there will be discussed again in this article, but in a greater detail and in a more Sony - specific view (don't worry; there is a MSFT article in the works as well). Also, I just want to note - any references to annual data results in respect to Sony are to be taken as fiscal year data. Sony's fiscal year (Q1) begins on April 1st and ends March 31st of the following year.
With several potential catalysts ahead, Sony is in position to regain its post as one of the top consumer electronics companies in the world. Even with high quality products and a great brand name, the company has still suffered over the past several years, especially when it is viewed from a fundamental perspective. There are many reasons for this, but chief among them is less than stellar management - and that is putting it very lightly. Given this, I feel fairly confident that the appointment of Kenichiro Yoshida and Hiroki Totoki were solid moves in the right direction. Both executives have experience and success in business development, especially after working for So-Net Corporation (a recently acquired subsidiary of Sony), and I believe that these two men can put the company back on the path to profitability. In addition, there are several opportunities that, if taken advantage of, can be highly effective in regards to increasing top and bottom line growth:
- Strong launch of the PS4, which sold over 1M units in its first day on the market
- The financial revival of the company's digital imaging business segment, with CMOS sensors at the helm
- Continuous milking of the company's cash cow segments of financial services, music, and TV
- Improvements in the mobile segment with the possibility of a contractual agreement with a North American carrier in the future
- The restructuring (or removal) of flailing TV and PC segments is likely to bring about asset sales for additional cash flow as well as stability to the company's historically underperforming business segments
A major X-factor going forward will be how well the new management team of Totoki and Yoshida can accelerate the restructuring of Sony's entertainment business, which has long been a drain on the company's bottom line. Daniel Loeb has been a major proponent of getting Sony to spin off its unprofitable entertainment divisions, including the company's flailing movie and distribution units, and argues that such a move would allow the company additional flexibility to focus on its other, faster-growing business segments.
In more recent news, Sony stock traded higher on news that the electronics giant hired Bain & Co. to identify areas where the company can trim $100 million in expenses. I am highly enthused by this - a combination of a successful restructuring of its electronics segments along with additional cuts throughout the company will make Sony a much more lean and effective cash and earnings generator going forward. I really do believe that the new strategic management team headed by Totoki and Yoshida can accomplish these goals of accelerating the legacy restructuring/cost cutting and return Sony to the black. At this point, such a statement is indeed highly subjective, but that is usually the case in the majority of corporate turnarounds in their initials stages.
Looking a little deeper at the motion pictures segment, we can immediately tell a major difference between this fiscal year at the last. While last fiscal year produced the blockbuster hit "The Amazing Spider Man", this FY saw flops such as "White House Down" and "After Earth". It is important to note that next year's releases will include "The Amazing Spider Man 2", "Robocop", and "22 Jump Street" which could help the segment leap into the black. But, I can understand where Daniel Loeb is coming from, and I am inclined to agree with him. Separating the entertainment segment from the parent company would allow Sony to focus on its other divisions while still maintain majority control (and profits) of the new spin off. As Loeb stated in his letter, the company successfully did this with Sony Financial. For reference, Sony was the number one studio in terms of market share and gross revenue last year (16.6%, $1,792M). YTD 2013, Sony is currently ranked 4th with a market share and gross revenue of 11.6% and $1,058M respectively. Therefore, we can see the impact of solid releases on revenue generation, making me hopeful that FY2014 will see the entertainment segment break a profit. For additional comparisons, revenues of Sony's Motion Pictures division was down in both 2013Q1 ($712.4M) compared QoQ to $856.5M, and 2013Q2 (975.6M) compared QoQ to $1,047.2M. Moving forward, Sony has recently gone on record stating that its entertainment arm will release only four movies next summer and intends to slash costs by as much as $250M over the next two years in the segment alone. I am a big fan of financial austerity, so the cost-cutting initiatives go a long way with me in regards to building confidence in the company's top management team.
A surprising bright spot in the entertainment segment is its Television division. With hit shows such as "Breaking Bad" and "The Walking Dead", as well as newcomers "Masters of Sex" and "The Blacklist", the division has broken out to be a major catalyst to the segment. In addition, forays into developing countries such as India, Mexico, and Brazil, has added other potential areas for growth. Here are the Television division's QoQ revenue comparisons for Q1 and Q2: 2013Q1 of $400.3M compared to 2012Q1 of $342.6M and 2013Q2 of $452.9M compared to 2012Q2 of $320.3M. So we can see there is significant potential for revenue growth in respect to Television production. However, as a whole, Pictures (Movies and Television combined) saw a 235% decline in operating income QoQ (Q2) from a gain of $103M in 2012 to a loss of $139M in 2013. One more key point here: with companies such as Netflix (NFLX) having growing success in distribution of digital media content outside of traditional channels, another key growth catalyst becomes apparent for Sony. The company has already established some significant groundwork in non-tradition distribution channels and has even struck a deal with Netflix to produce a new original series.
Another growing, profitable division in the entertainment sector is Sony's Music Entertainment. Sales grew QoQ from 2012Q1 and 2012Q2 figures of $967M and $967.7M to 2013Q1 and 2013Q2 figures of $1,091.8M and $1,127.3M. This calculates out to a ~15% growth in revenues for the Music division. In addition, operating income grew over 20% in a QoQ comparison (Q2), from $108M in 2012 to $130M in 2013.
Moving on to the mobile segment, Sony has opted to take the safe route, foregoing the US and Chinese markets for their less competitive EU and Japanese counterparts. The company sold ~10M units of its highly touted Xperia Z in Q2 which helped the segment boost sales by an impressive 39.3% QoQ, and the device was one of the top selling smartphones in over 20 countries. In addition, the company has followed up on that success with the recent launch of the Xperia Z1. It is highly likely that Sony can continue this success in their current markets, but the major catalyst could come in the form of expansion to the US and Chinese markets, where fierce competition typically drives prices (and thus margins) down. Such a scenario may be increasingly likely with rumors of the company in talks with major US carriers regarding distribution in US markets, although that is highly speculative at this point. It is more likely that Sony will stick to its guns and expand in its current, more margin-safe environments. But if success continues, don't be surprised to see an expansion into the larger markets. From a more macro perspective, AllThingsD recently reported that smartphones have accounted for 55% of all cell phone subscriptions worldwide, up from 44% last year. In addition, they estimate that total smartphone subscriptions will grow at an average rate of 32.5% over the next six years, resulting in a smartphone subscription base of 5.6B by the end of 2019. Even if Sony maintains its market share, smartphone growth and penetration (not even accounting for growth in tablets) will cause the company's top and bottom lines of the mobile division to grow at a rapid pace. Below are smartphone market shares for global, Western Europe, and Japan (and I apologize for the slight variation in time frames).
The mobile segment also contains Sony's PC line, which has been a drag on the entirety of the segment given that the global PC market is slowly circling the drain. After declining 10.6% QoQ in 2013Q2, the PC market continued its descent, dropping 8.6% QoQ in 2013Q3 (although US shipments actually increased by 3.5% in 2013Q3). Recently, Sony has released some interesting new entrants into its VAIO lineup. The VAIO Tap 21 is being marketed as an all-in-one PC, with features such a 21.5" Full HD touchscreen, 4th Gen Intel processors, and a plethora of RAM and hard drive options. The VAIO Tap 11 is the 21's little brother, sporting a more mobile 11.6" Full HD Touch and the same processor and memory options as the 21. Quite possibly the most interesting new line is the VAIO Flip - convertible PCs that come in three different sizes (13.3", 14", and 15.5"), with up to 16GB of RAM and a Nvidia GeForce GT 735M (with a choice of either 1GB or 2GB). Overall, the lineup looks pretty solid and has received mostly positive reviews. Despite this, the overall slowdown in the PC market will continue to cause a loss in this division, and it is very likely that this will constitute a restructuring or teardown of the PC line. However, with the growth in smartphone demand, the entirety of the Mobile segment should continue to post growing revenues and operating income for the foreseeable future.
Sony's Imaging Products line has been struggling the past few years, as sales of digital cameras have been cannibalized by smartphones with progressively higher resolution built in cameras. In response to this, Sony's line has become more differentiated in the sense that they are increasingly high end, such as the Alpha 7 and RX series lines, with each receiving positive reviews from critics. In an interesting development, Sony released the QX series cameras which combine with smartphones to take superior quality pictures. The concept received mostly positive reviews with its major flaw being too steep of an entry price, especially given the quality of the cameras in the newer smartphones such as the iPhone 5s, Samsung Galaxy S4, and HTC One. For reference, the Imaging segment's 2013H1 sales were down 8.2% from STLY (2012H1 $3,882M to 2013H1 $3,564M). Operating income followed suit, falling 54.4% compared to STLY (2012H1 149M to 2013H1 68M). With the overall market shifting away from standalone cameras, a case can be made that this segment will not be a significant growth driver going forward. However, Sony's technological expertise, including its state of the art CMOS sensors, provides a level of differentiation that could very well separate the company from its competitors. In addition, unit sales for interchangeable lens camera (which most of Sony's products are), have actually been increasing. While I do not think this trend will continue mainly due to cannibalization from smartphones, I believe ASPs will likely post a modest rebound, which will more than offset a decline in unit sales. Going forward, I think the IP segment, which has long been a major part of Sony's success, will continue to post solid numbers.
Moving on to the Home Entertainment segment, we can see that this is where Sony really needs some help. With continuing downwards revisions in forecasted revenues and operating income, the HE segment is the company's second major segment that is likely to see either a restructuring or teardown. After posting in the black in 2013Q1, the segment's performance has gone downhill, posting in the red for 2013Q2 and projecting a likely FY2013 loss. With CEO Kazuo Harai on record stating that returning this segment to profitability is a key objective for Sony going forward, it is safe to assume that at least part of the company's future cost-cutting initiatives will be aimed almost squarely at TVs. One glimmer of hope going in the near term is a strong Q3 on the back of the upcoming holiday season. In addition, the company's new 4K TVs have been lauded by critics despite the extremely high price point. From a financial perspective, the HE segment posted a growth in revenues and operating income in 2013H1 compared to STLY (10.5% and 66.3% respectively), but operating income ended in the red for the half.
Sony Financial, a 2004 spin-off of Sony (which holds a 60% stake in the firm), has been an astounding success. Comprising of life insurance and banking segments, Sony Financial has been a constant, increasing of both revenues and earnings for the firm. The remainder of this year should be no different, as Sony stated in their recent earnings call that "better than expected investment performance at Sony Life" will lead to higher guidance on the holding's operating income.
And now we get to the fun part - the Gaming segment. Because analyzing the competition is an important part of fundamental analysis, there will be comparisons made here between Sony's PlayStation 4 (PS4) and Microsoft's Xbox One (X1). However, the primary purpose of this section will be to determine how much, if at all, an impact the PS4 will have on Sony's top and bottom line. For a more detailed comparison/debate of the two systems and a review of the 2013 E3 Conference, please refer to my previous article "A Breakdown Of The 3rd Great Console War".
This generation's console war will be like no other, mainly due to the timing of the release of each system. For the first time, the primary systems are launching within a week of each other: the PS4 released on November 15 and the X1 hit stores November 22. Therefore, unlike in the previous generation where the Xbox 360 racked up a sizeable lead on the PS3 due to its earlier release, the generation will see gamers actually get their console of choice without any time lag (disregarding supply constraints). Both systems have somewhat similar specifications. Instead of rewriting the comparison, I will quote an excerpt from my previous article:
When comparing the RAM of both systems, the PS4 clearly differentiates itself from the X1. While both systems contain 8GB of RAM, Sony opted for 5500MHz DDR5 compared to Microsoft's 2133MHz DDR3. To any non-techie who doesn't know what this means: the bandwidth of the PS4's DDR5 will blow that of the X1's DDR3 completely out of the water. In an attempt to compensate for this, the X1 will feature a 32GB ESRAM, which will only be positively supplementary if developers decide to develop their X1 games to take advantage of it. Bottom line: in a base case, the PS4 can multitask and transfer the flow of information much faster than the X1 unless an additional step is taken by each developer to utilize the X1's ESRAM.
On the CPU front, both the PS4 and X1 are almost exactly the same, with a selected custom 28nm TSMC fabricated AMD advanced processor combining a Series-7000 Radeon GPU and an 8-core Jaguar CPU being the go to choice for both consoles. Eight cores brings a ton of computing power to both devices, an essential component given that both (not just the X1) are considered multimedia entertainment devices, not just gaming consoles.
Another major differentiator of the two consoles may come in the form of their respective GPUs. While both are running comparable APUs, Sony's decision to go with the mid-range Pitcairn over the Bonaire (which the X1 uses) could drastically alter the playing field. Why? The Pitcairn has 18 computing units comparable to the Bonaire's 12. Just a little brush up on computer science - a computing unit (CU) is related to the shader processor, which determines the level of flexibility in rendering (geometrical development of an image) a machine can achieve. In layman's terms, more CUs lead to better visual performance. So, the PS4 technically has a whopping 50% lead over the X1 in terms of visual prowess. ExtremeTech wrote an article a few months ago to test this theory. In summary, ET found that, on average, the PS4 had between 17% and 33% faster frame rates over the X1. This is a significant differentiator for the PS4.
Overall, due to the advantages in the GPU and base RAM capabilities, it is unlikely that the X1 will be able to match the extremely high processing and graphical power of the PS4. However, due to relatively similar CPU specs and the likelihood developers will normalize graphics to look optimal on both systems, multiplatform games will likely look very similar. It's those PS4 exclusives that have the opportunity to show off the system's major technical advantages.
Now that we have the console specifications, let's talk about the financial involved with the specs. This will allow us to better understand the margins associated with the PS4. There have been several teardown analyses that have surfaced over the past week, including those from IHS and TechInsights. Below are IHS's estimates:
So we can see that, including manufacturing/assembly/boxing costs, the PS4 costs only $381. I say "only" because note that the PS3's total cost at the time of launch was upwards of $800, a far cry for the PS4's figure despite the latter (obviously) having significantly higher performance benchmarks. We can chalk this up to the dramatic decline in hardware prices (think HDDs, RAM, etc.), which brings me to my next point. The PS3's costs declined from ~$805 at its launch to ~$381 now. Can we expect the same level of cost depreciation for the PS4? Probably not, but given (1) increasing economies of scale as sales ramp up and (2) future declines in hardware costs, it is reasonable to assume that the CoGS associated with the PS4 will have a noticeable decline in the future.
So where does this leave Sony? After factoring in shipping/freight costs (I estimate ~$8/unit), maintenance (let's chalk up another $8/unit), and marketing expenses (~$15/unit). This leaves the PS4 with a loss of $13/unit, a far cry from the $200 to $300 per unit loss Sony took on the PS3 at launch. This of course does not factor in PS Eye, as the device is not included with the console purchase unlike the X1's Kinect 2.0, which is rumored to have an extremely high production cost. Perhaps this is why Microsoft removed mandatory Kinect connectivity - a contingency plan to cut costs in case the Kinect does not have as much of a sales impact than previously estimated.
Now on the basis on unit sales, latest estimates by IHS predict that Sony will sell 50M units by the end of 2017 (compared to the X1's 48M), which is supported by the fact that Sony sold over 1M PS4s on the first day of sales (note that the PS4's 1M in sales was only in the US compared to the X1's 1M in sales worldwide). In a move that makes sense, IHS cites geographical loyalty - the consoles will sell well where they have historically sold well. This means that the X1 will sell very well in the US, moderately well in Europe, but poorly pretty much everywhere else. In contrast, the PS4 will sell very well in both the US and Europe (a recent Ipsos poll found this as well), and will rake in the majority of unit sales on the Asian continent. This is extremely significant given the fact that China has recently lifted its console ban. With Sony gearing up to sell the PS4 at an increasingly higher margin (likely soon rather than later), early earnings figure is likely to be much higher than they were in the PS3's early years. Another point to support this is the increasing emphasis placed on connectivity. Sony will generate additional new revenue from PS Plus subscriptions in addition to revenue from software sales and other services. The PS4 launch is gearing up to be an extremely significant catalyst for Sony.
So, where does this PS4 leave Sony in terms of operating profit? Well let's take a look at the present. In the following table we can observe the effects of (1) different operating margins on the PS4 and (2) the ecosystem that Sony is banking on to generate income. Let me note that in this table, Player1 is assumed to buy the PS4 console as well as 2 games, while Player2 is assumed to buy the PS4 console, two games, an extra Dualshock 4 controller, and subscribe to the PS Plus membership. It is very reasonable to assume at this point that most consumers that have purchased a PS4 will at least fall under the criteria of Player1, and more than likely will fall closer to, if not exceed, the criteria of Player2. After all, what good is the system if you don't buy the amenities that go along with it? As we can see, even at the high margin of $420, Sony still breaks even on the PS4 as long as the consumer falls into the category of Player1. If the consumer falls into the category of Player2, he/she generates ~$92 of income per unit for Sony even at the $420 CoGS point. If we take a 50/50 mix of Player1 and Player2 (which is very conservative - there are likely more Player2-type consumers than Player1s) and apply that to the 1M units that Sony has sold, that calculates out to be a $46M EBITDA stream for the console at launch. Subjecting that stream to my 2014E EBITDA/NI ratio of ~8% gives us Sony's total earnings on the first 1M PS4 sales: $3.7M - and more importantly, an EPS boost of ~$0.04.
Once again, note that the above calculations assume the maximum CoGS of $420. If Sony reduces that to $380 (and everything else stays constant), this would generate an incremental ~$0.05 of EPS. And this is only for the first 1M units - if Sony reaches its goal of 5M units by March 2014, that would correlate to EPS gains of $0.20 to $0.25. These EPS figures, using my terminal P/E ratio of 19.7x, would translate into an additional $4 to $5 worth of share price for Sony. Here are some drawbacks to these recent calculations:
- Applying an EBITDA/NI ratio of 8% is likely far too conservative. Depreciation expense associated with larger assets in Sony's other segments would drag the margin down, and the minority interest would be fixed at a certain price (it would be based on the earnings of Sony Financial) regardless of how many PS4 units are sold. Therefore, incremental EPS gains would likely be higher than I previously forecasted.
- The CoGS associated with a PS4 unit could be higher than forecasted, but given recent teardowns, economies of scale, and the likely continuation of the historical trend of declining hardware costs, CoGS associated with the production of a PS4 unit would be at their highest now ($420) and decline across the PS4's lifespan.
- The calculations are assuming that the PS4 will have a constant ASP through March 2014. While there have been some rumblings that a price drop is already on the horizon, I believe such a scenario is highly unlikely in this short of a time frame. Remember - demand (and supply) dictate price, and with demand not slowing down anytime soon, why would there be a price decrease? The only answers that I can think are (1) Sony wants to surpass the 5M unit mark (I do not think they will try to force this issue with a ASP drop) or (2) the X1 sales put a downward pressure on the PS4's price.
- The margins associated with Sony's income/game sold is very conservative. Given the historical decline in hardware prices, it is quite likely that developers are bringing in a higher percentage of profits due to cheaper production costs. This would lead to Sony getting a bigger cut (even if the fee percentage stayed the same, the slice from which the fee is derived is getting bigger). In addition, this is the margin for 3rd party games. Any games made in house by Sony would likely provide a higher margin.
The Fundamental Story
Let me start off by saying Sony fails almost every criterion I have for placing a security in my portfolio. It is one of the only two companies in my portfolio that have a current ratio of below one in addition to having successive years of revenue decline, negative profits, and negative return ratios. So why would I invest in Sony? Here's why:
- In Sony's case, it all starts with improved efficiency, which is governed by top management. As I stated before in the very beginning of this article, I believe Kenichiro Yoshida and Hiroki Totoki have the necessary capabilities to right this (massive) ship and return Sony to profitability. The first step - scaling down, restructuring, or exiting unprofitable product lines - has already been taken. Whether or not the move will be successfully implemented is a major question mark, but I believe that the improved upper management will get the job done. Cost-cutting initiatives will scale back expenses, improve margins and cash flow, and generate positive earnings going forward.
- Sustained success of profitable businesses. Business segments such as Imaging, TV Programming, Music, and even the up years of Motion Pictures (remember - The Amazing Spider Man 2 releases in six months) have contributed a buoying effect to the company's EPS in recent years. If top management can successfully implement the efficiency initiatives discussed in this article, the effectiveness of these successful product lines will come to light.
- In accordance with Peter Lynch's investing guidelines, I'm investing in what I know. I'm the spitting definition of a "gamer", I build computers, and I am an avid TV fan, movie-goer, and music enthusiast. Notice I touched nearly every major product line Sony offers. I know what goods and services Sony provides, and I am a consumer of those goods and services (for Sony and its competitors). Furthermore, I like what I see. Note that I am certainly not a Sony fanboy - I believe the Xbox 360 was the superior console in the last console war, and Microsoft has historically been one of my most followed companies.
- Cash and Assets. As of the writing of this article, Sony has cash reserves of just under $14/share and assets (minus intangibles and liabilities) of just over $14/share. From a valuation standpoint, this tells me that investors are valuing Sony's future earnings at ~$4/share, translating into a P/E ratio of 4.3x (using 2015E EPS of $1.03). As I stated in my previous article, that is ludicrous, especially with the PS4 life cycle just starting. This fundamental aspect combined with the first (improved efficiency, profitability) is all I need to take the leap to invest in Sony.
And that touches my main point regarding my valuation of Sony. The company is just plain and simply undervalued. To delve a little deeper into my valuation, I'm going to begin by posting my model.
To actually place a valuation on Sony, I use several different methods, but the two I place the most weight on are my dual P/E multiple analysis and my dual EV/EBITDA multiple analysis (you can see a description of the dual valuation methods in the Appendix section of this article). Looking at the P/E analysis first, we can see that due to Sony's volatile earnings over the past several years, there is some associated volatility with its P/E multiple. However, by piecing together historical highs and lows, I have estimated a range at which the multiple will likely fall within. Then, I take into consideration Peer P/E multiples, Industry multiples, and Consensus data. All of these factors combined gives me a 12mo. P/E multiple of 21.5x which, when combined with my 2015E EPS of $1.03, calculates a Target Price of $22. The second part of the P/E valuation involves understanding growth and multiple trends. As discussed in the Appendix, growth (and thus multiples) slows over time before aligning itself with the growth of the economy. Therefore, my terminal P/E is discounted to reflect slower growth, which results in a terminal P/E multiple of 19.7x and an Intrinsic Value of $25.
My dual EV/EBITDA multiple works in the exact same way at the dual P/E multiple. In this case, I calculated a 12mo. EV/EBITDA multiple of 4.7x, leading to a Target Price of $28. Then, using present value discounting, I calculated a terminal EV/EBITDA multiple of 4.3x, which leads to an Intrinsic Value of $24.
In addition to my two dual multiple valuations, I also ran a Free Cash Flow analysis. I calculated beta by using the covariance and variances of Sony's 5 year performance to the S&P's 5 year performance, estimated a 2.1% Cost of Debt by examining the company's outstanding bond issues, then used the CAPM to calculate a 13.1% Cost of Equity. All of these steps are shown in the models below.
The last valuation I tested was a Dividend Discount Model. However, given Sony's relatively low yield and varying Return on Equity, I felt the results the model produced were inconsistent due to (1) the lack of stability when calculating a sustainable growth rate due to return statistics and (2) the lack of the result's consistency with the other models. Therefore, I disregarded the results of the DDM.
After consolidating all of the valuations, my final Target Price was $25 (implying a ~36% upside) and my final Intrinsic Value was $24 (implying a ~32% upside).
In conclusion, I believe that Sony is significantly undervalued. With the upgraded top management team focusing on cost-cutting initiatives, turning around unprofitable businesses, and capitalizing on its growth segments, it is my theory that the worst is (almost) over and Sony has a bright future ahead of it.
1) Intrinsic Value (IV) refers to how much the stock is worth by projecting future EPS and/or DPS growth. The IV is theoretically what the company's price would be in a fully rational market where stocks trade at exactly the amount they are worth and multiples, such as the P/E, moved at a relatively stable rate. Therefore, stocks do not necessarily have to trade at the IV. The IV is calculated by forecasting 4 to 5 years into the future, then discounted back at the present value. Thus, the IV places a higher emphasis on companies that are estimated to have sustainable earnings and/or dividend growth.
2) Target Price (TP) refers to what we believe a stock will sell at given a particularly time frame - such as a 12-month TP. The TP may differ from the IV as it could be higher or lower due to investor perception and/or less than efficient markets. Theoretically, at some point within the long term (4-5 years), the long-term Target Price will equal the long-term Intrinsic Value. The TP does not take into account a company's long-term growth potential, but is likely a more accurate depiction of a company's stock price in the more immediate term. Theoretically, a TP multiple, such as P/E, will be higher than an IV multiple, as company's growth tend to slow over time.
Additional disclosure: Many of the financial models presented in this report were first developed by the Louis Wilson Fund of Millsaps College, where I served as Lead Analyst and Portfolio Manager from 2011 - 2013. All data, estimates, exhibits, and opinions are my own.