Latest news with #bearishthesis
Yahoo
12-07-2025
- Business
- Yahoo
The Chefs' Warehouse, Inc. (CHEF): A Bear Case Theory
We came across a bearish thesis on The Chefs' Warehouse, Inc. on by yarak775. In this article, we will summarize the bears' thesis on CHEF. The Chefs' Warehouse, Inc.'s share was trading at $63.81 as of June 30th. CHEF's trailing and forward P/E were 41.98 and 37.04 respectively according to Yahoo Finance. The Chef's Warehouse (CHEF) presents a compelling short opportunity due to a confluence of structural and macro headwinds. Once a high-growth food distributor focused on premium products for fine dining and hospitality, CHEF's expansion relied heavily on acquisitions, which drove revenues from $1.6B in 2019 to $3.8B in 2024. However, despite topline growth, margins failed to expand, with gross margins falling 150bps and EBITDA margins remaining flat, highlighting the company's lack of operating leverage. More concerning is that in downturns, CHEF suffers significant margin compression, as seen in 2020's 30% revenue drop, leading to negative EBITDA. With M&A opportunities drying up due to a saturated market and elevated acquisition costs, future growth will likely revert to mid-single digits, largely driven by price inflation rather than volume. This deceleration is critical, as the stock currently trades at ~40x 2025E earnings, roughly double the multiple of larger peers like SYSCO and US Foods. The competitive landscape is also shifting, with SYSCO and US Foods aggressively entering the specialty segment—CHEF's core niche—leveraging scale, logistics, and incentives to poach customers. Testimonials suggest this shift is already eroding CHEF's customer base. A broader economic slowdown, especially in travel and fine dining, would further expose CHEF's vulnerability, given its negative operating leverage in downturns. While bulls may argue that the affluent clientele cushions downside, current conditions likely reflect peak demand. With slowing growth, intensifying competition, and a stretched valuation, CHEF appears primed for multiple compression. Insider selling adds another red flag, reinforcing the view that risk/reward is skewed to the downside. Previously, we covered a on United Natural Foods, Inc. by The Value Road in June 2025, which highlighted the company's turnaround driven by cost cuts, supply chain improvements, and activist involvement. The company's stock price has appreciated by approximately 7.5% since our coverage. This is because the thesis has started to play out. yarak775 shares a contrarian view on CHEF but emphasizes on structural fragility and macro risks. CHEF isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of CHEF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-06-2025
- Business
- Yahoo
Lucky Strike Entertainment Corporation (LUCK): A Bear Case Theory
We came across a bearish thesis on Lucky Strike Entertainment Corporation on The Lion's Roar - Outside the Box Investments' Substack by Dominick D'Angelo. In this article, we will summarize the bears' thesis on LUCK. Lucky Strike Entertainment Corporation's share was trading at $9.48 as of June 24th. LUCK's trailing and forward P/E ratios were 24.12 and 63.29, respectively, according to Yahoo Finance. Pixabay/Public Domain Lucky Strike Entertainment (LUCK) continues to underwhelm investors, with Q3 results and operational trends highlighting significant underlying issues. The company pulled full-year guidance just two months before year-end, driven by weakness in its corporate events business and further confirmed by similar softness at TopGolf. Same-store sales were down 5.6% in the quarter, with January impacted by California wildfires and corporate pullbacks, February by macro uncertainty and weather, and March showing no rebound. Retail traffic was flat, leagues saw low single-digit growth, and the events business declined by double digits. Despite easier comps in Q3 and Q4, overall traffic fell ~8.5% YoY, undermining the viability of LUCK's high fixed-cost model. The F&B business, once a bright spot due to menu premiumization, is now losing steam, with beverage sales particularly weak. The bowling pricing tailwind is also fading as prior benefits are lapped, compounding pressure. Yet, there are early signs of management discipline: cost reductions are materializing (labor costs down 7.3% YoY), and capital allocation is shifting toward high-ROI projects and deleveraging instead of buybacks. The company's summer pass initiative shows some momentum, with 2025 sales likely reaching $11M, but it still accounts for less than 1% of revenue. While insider ownership and dividend mechanics provide liquidity flexibility, there's increasing pressure to cut the dividend to redirect capital to debt paydown. Without stabilization in same-store sales and improved traffic, LUCK may need to raise funds externally in 2026. The business remains fragile, with upside capped until core operations regain their footing. Previously, we covered a on Xponential Fitness, Inc. (XPOF) by Inflexio Research in February 2025, which highlighted the company's franchise-driven growth and turnaround strategy. The company's stock price has depreciated by approximately 2.68% since our coverage. This is because the thesis didn't play out as expected. Dominick D'Angelo shares a contrarian view in his bearish thesis on Lucky Strike Entertainment. Lucky Strike Entertainment Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held LUCK at the end of the first quarter, which was 16 in the previous quarter. While we acknowledge the risk and potential of LUCK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données
Yahoo
11-06-2025
- Business
- Yahoo
StoneCo Ltd. (STNE): A Bear Case Theory
We came across a bearish thesis on StoneCo Ltd. (STNE) on Quipus Capital's Substack. In this article, we will summarize the bears' thesis on STNE. StoneCo Ltd. (STNE)'s share was trading at $13.51 as of 6th June. STNE's trailing and forward P/E were 11.42 and 9.68 respectively according to Yahoo Finance. StoneCo Ltd. (STNE), is deeply entrenched in Brazil's payment processing ecosystem, with a business model centered on receivables discounting rather than the processing layer, which has been heavily commoditized. STNE advances funds to merchants on credit card sales, earning high-yield, low-risk returns that are essentially underwritten by card issuers or networks. This model thrives among small businesses with limited credit access, where urgency often trumps cost. However, STNE's growth potential faces headwinds in the market: a saturated market growing only in line with GDP plus inflation, and a capped receivables base tied to one month's worth of payment volumes. Compounding this is the risk posed by PIX Parcelado, a government-backed initiative allowing installment payments directly via banks, which could disintermediate STNE from the receivables chain. While STNE has explored traditional credit markets, its previous attempts led to high delinquencies and an eventual retreat. The company lacks the competitive advantage to rival Brazil's full-service digital and incumbent banks. Despite these challenges, STNE remains highly profitable, and management is focused on balance sheet optimization through share buybacks and modest leverage. Assuming stable pricing and spreads, STNE can deliver around 11% from buybacks at a 9x P/E, and add another 5–7% from underlying economic growth. While the upside from fixed-multiple returns and efficient capital allocation is compelling, it's counterbalanced by the real possibility of margin erosion or disintermediation. For investors, the key question is whether these tailwinds are enough to justify the risk of business model disruption in an evolving payments landscape. Previously, we summarized a bullish thesis on SoFi Technologies, highlighting its rapid digital bank user growth, expanding product engagement, and forward profitability inflection, framing its 2026 earnings potential as a catalyst for valuation rerating. The stock has appreciated by approximately 4% since the recent coverage. Together, these two theses present a tale of fintech divergence: one banking on digital ecosystem scale and future earnings leverage (SoFi), the other navigating a legacy-dependent niche facing structural headwinds (StoneCo) StoneCo Ltd. (STNE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held STNE at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of STNE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
30-05-2025
- Business
- Yahoo
TriplePoint Venture Growth BDC Corp. (TPVG): A Bear Case Theory
We came across a bearish thesis on TriplePoint Venture Growth BDC Corp. (TPVG) on Substack by Edwin Dorsey. In this article, we will summarize the bears' thesis on TPVG. TriplePoint Venture Growth BDC Corp. (TPVG)'s share was trading at $6.71 as of 23rd May 2025. TPVG's trailing and forward P/E were 7.22 and 5.61 respectively according to Yahoo Finance. A financial portfolio manager looking at data on a monitor while managing assets. TriplePoint Venture Growth BDC (NYSE: TPVG) has shown a consistent decline in net asset value (NAV), raising concerns about the sustainability of its business model. Since Q4 2021, NAV has dropped from $14.01 to $8.61 by Q4 2024, reflecting a significant erosion in asset quality. This ongoing trend suggests structural issues within its lending practices, particularly its continued exposure to financially unstable, venture-stage companies. While the firm has attempted to rotate out of distressed loans, the newer additions to the portfolio appear to carry similar levels of risk, offering little improvement in overall credit quality. The company remains heavily reliant on startups that are either operationally challenged or lack the financial strength to meet their obligations, making recovery rates uncertain and potentially leading to further write-downs. Despite expectations of stabilization, there has been no meaningful progress in reversing the decline in NAV or improving portfolio health. Dividend sustainability is also in question, given the weakening income profile and increasing pressure on earnings. Without clear signs of a strategic shift or a credible path to portfolio improvement, TriplePoint's long-term outlook remains concerning. The persistent deterioration in NAV, limited visibility into credit recovery, and continued exposure to weak borrowers all suggest a structurally fragile business. As a result, the stock may continue to underperform, and the risk/reward profile has become increasingly unfavorable for long-term investors. For a deeper look into another stock in the Asset Management industry, be sure to check out our article on BlackRock, Inc. (BLK), wherein we summarized a bullish thesis by Kroker Equity Research on Substack. TriplePoint Venture Growth BDC Corp. (TPVG) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 7 hedge fund portfolios held TPVG at the end of the first quarter which was 9 in the previous quarter. While we acknowledge the risk and potential of TPVG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TPVG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
