I've really like tracking it. It does a really good job of giving directional insight in my opinion. It's done super well to give a good early look at how the upcoming CPI reports will do. The magnitudes, however, can be more nuanced (i.e. the trough or peak numbers can be the most interesting/alarming, but also might be just for a very short period of time).
I did some back-of-the-napkin math on the current FCF yield of 3.3% with the ~12% growth (revenue and EBITDA growth is expecting to be just a little bit higher; I'm assuming most of it makes its way down to FCF) and assuming today's valuation.
3.3*1.12^2 = 4.14
After 2 years of 12% growth, the FCF yield on a purchase today would be 4.14%.
With the 10y is 4.2%, it would take just a bit over 2 years.
Good stuff on the Truflation data - gonna pull that for myself 🤣
Nice! Just saw it in your update this morning!
I've really like tracking it. It does a really good job of giving directional insight in my opinion. It's done super well to give a good early look at how the upcoming CPI reports will do. The magnitudes, however, can be more nuanced (i.e. the trough or peak numbers can be the most interesting/alarming, but also might be just for a very short period of time).
Can you double click on how you made this calculation? --"It would take just 2-3 years for Veeva’s FCF yield to overcome the 10y yield"
I did some back-of-the-napkin math on the current FCF yield of 3.3% with the ~12% growth (revenue and EBITDA growth is expecting to be just a little bit higher; I'm assuming most of it makes its way down to FCF) and assuming today's valuation.
3.3*1.12^2 = 4.14
After 2 years of 12% growth, the FCF yield on a purchase today would be 4.14%.
With the 10y is 4.2%, it would take just a bit over 2 years.
Got it, thanks!