Charged Alpha Stock Encyclopedia

Medtronic plc (MDT) Q1 FY2027 — Shares closed $92.04, up 1.5%, after opening at $94.00 and giving most of the pop back.
Fiscal 2027 is a 53-week year and the extra week landed in Q1. Medtronic's own footnote puts it at $570m - 49% of the entire organic revenue increase. Strip it out and organic growth is 7.0%, not 13.7%, which is below the bottom of the 7.25-7.75% full-year guide the company raised on the same page.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$89.39 vs ~$92.04 today.
KEY METRICS:
- Revenue $9.756bn, up 13.7% reported and 13.7% organic - but the 53rd week supplied $570m of it
- Ex-week organic growth 7.0%, below the raised 7.25-7.75% FY2027 guide
- Adjusted EPS $1.45 vs $1.39 consensus - a 6c beat, but only a 2c raise at the FY guide midpoint
- Adjusted operating margin 23.7%, up just 10bp on 13.7% revenue growth (incremental margin 24.7%)
- R&D grew 6.2% vs revenue 13.7% - 56bp of margin relief, 5.6x the margin actually delivered
- GAAP EPS $1.14 (+40.7%), but +22.5% once the minority-investment mark is stripped from both years
- Free cash flow $1.290bn, up 120.9%; operating cash flow $1.793bn on flat capex
- Electrophysiology $2.218bn, +29.1% organic and +41.1% in the US - 44% of the organic increase
- Fair value $89.39 vs $92.04 close (-2.9%); Street consensus $95.54, median $97
What to watch: Q2 FY2027 on 17 November has no extra week in it. Organic growth near 7% confirms the base case; a five confirms the bear.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

nCino (NCNO) Q2 FY2027 — NCNO went into the print at $20.81, closed the reaction session at $21.51 (+3.4%) and $22.99 two sessions later - 10.5% up on the print, and 64% above its March low of $14.01.
nCino grew revenue 8.2% to $161.0m and swung GAAP operating income to +$13.6m from -$9.3m. But in the same six months it spent $175.7m retiring its own stock against $114.8m of free cash flow - and the $60.9m shortfall is within $1.0m of the $61.9m of net new debt on the balance sheet. The 10-Q says it outright: the repurchase was funded with cash on hand and term loan proceeds. The buyback worked - $16.16 average against $22.99 today. The board has just authorised another $100m at the higher price.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$17.33 vs ~$22.99 today.
KEY METRICS:
- Revenue $161.0m, +8.2% YoY, vs a $159.2m bar; subscription $143.5m, +9.7%; services $17.5m, -2.9%
- GAAP operating income +$13.6m vs -$9.3m; non-GAAP operating margin 25.4% from 20.2% - but DOWN 256bps sequentially from 27.9%
- GAAP diluted EPS $0.05. nCino publishes NO adjusted EPS - the reconciliation stops at operating income - so the widely-quoted $0.27 'miss' compared a GAAP print to a non-GAAP bar. Rebuilt properly, non-GAAP EPS is $0.31: a beat
- Six months: $175.7m of buybacks vs $114.8m of free cash flow - a $60.9m shortfall, within $1.0m of $61.9m of net new debt
- Debt $213.5m to $275.4m; $200m term loan taken 30 March 2026, matures Oct 2029, applicable rate 5.64%
- Buyback: 10.83m shares at a $16.16 average; diluted share count -8.6% YoY; a new $100m authorisation struck at $22.99
- Guide implies only 1.1% revenue growth over the next six months (2.3% annualised): $161.0m to $162.3m guided to $162.8m implied
- The beat did not flow through: revenue beat by $1.9m, the full-year guide rose $1.5m at the midpoint
- Mix: US non-mortgage subs +11.4% and international subs +12.7%; US mortgage -1.0% and the UK book -7.2%
- Stock comp $63.8m annualised, 9.9% of guided revenue. Charge it and $139.5m of guided FCF becomes $75.7m of owner earnings
- Enterprise value $2,623m: 4.1x guided revenue, 18.8x guided FCF, 34.7x owner earnings
- Market cap $2,431m on the 10-Q cover's 105.74m shares - our data vendor's $2,519m is 3.6% high on a stale share count
- Reverse DCF: $22.99 requires 11.0% revenue CAGR for five years. The company guides 1.1% over six months
- Our fair value $17.33 (bear $8.80, base $17.27, bull $32.42) vs $22.99 - 24.6% downside
What to watch: A Q3 above the top of the guide with the mortgage line growing again, the UK returning to growth, or stock compensation below 7% of revenue with the operating margin held. Any of those moves our owner-earnings number a long way.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

CMB.TECH NV (CMBT) Q2 2026 — The stock rose 3.6% on the print and closed the week at $18.35, a twelve-month high.
CMB.TECH earned $364.4m in the June quarter - $1.26 a share against $0.04 a year earlier - on revenue of $703.9m, up 81.5%. We tested the obvious objection (that the profit was really vessel sales) and rejected it: disposals were 35% of profit, not the whole of it. Our problem is the price and the balance sheet.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$13.54 vs ~$18.35 today.
KEY METRICS:
- Revenue $703.9m, up 81.5% year on year (H1 $1,223.6m, up 96.4%)
- EBITDA $552.8m vs $224.1m; core EBITDA ex vessel sales $415.7m vs $168.7m
- Profit $364.4m = $1.26 per share vs $0.04; Street bar was $0.875
- Vessel disposal gains $127.4m = 35% of profit (Q1 2026 was 73%)
- Pre-tax profit ex all disposals $237.7m vs a $60.2m loss a year ago
- VLCC spot TCE $126,790/day vs $44,981; Suezmax $123,405 vs $40,160
- Capesize C5TC $39,806/day vs a 10-year average of $22,926 (58%)
- Contract backlog $3.26bn; 83% of Q3 VLCC days and 85% of Newcastlemax days fixed
- Intended distribution $0.64/share ($0.21 dividend + $0.43 share premium)
- H1 operating cash flow $417.3m; H1 payout $232.1m paid + $185.7m proposed = 100% of it
- Net debt $5,292.8m against a $5,324.6m market capitalisation; EV $10,617.4m
- Book value $10.76/share; price/book 1.71x; EV/mid-cycle EBITDA 13.6x
- Our fair value $13.54 (NAV $17.32 / DCF $13.10 / mid-cycle multiple $0.58, 55/30/15)
What to watch: the Q3 fixed-cover percentages and whether the $0.64 distribution survives a softer quarter - the next print is late November 2026
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

HEICO Corporation (HEI) Q3 FY2026 — HEI went into the print at $351.05 and closed at $336.53 three sessions later, -4.1%, having set a 12-month closing high of $374.67 on August 14. The non-voting Class A (HEI.A) closed at $250.06, -2.7% over the same three sessions.
HEICO reported record net sales of $1,413.1m (+23.1%), record operating income of $355.2m (+34.0%) and record net income attributable to HEICO of $235.4m (+32.8%), with diluted EPS of $1.67 against a $1.51 consensus - a beat on both lines. HEICO's own release put CONSOLIDATED ORGANIC growth at 14%. Nine of the 23 headline growth points were acquired, and HEICO spent $1,018m of cash on acquisitions in nine months to buy them.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$219.46 vs ~$336.53 today.
KEY METRICS:
- Net sales $1,413.1m, +23.1% YoY - a record, vs a $1,357.9m consensus
- Diluted EPS $1.67 vs a $1.51 bar - a $0.16 beat; HEICO publishes no non-GAAP EPS, so bar and print share a basis
- Consolidated ORGANIC net sales growth 14%, against the 23.1% headline - a 9.1-point acquired gap
- Flight Support: sales $947.8m +18.1%, organic 12%, operating margin 25.88% (from 24.71%)
- Electronic Technologies: sales $483.5m +35.9%, organic 18%, operating income +55.0%, margin 25.97% (from 22.76%)
- Operating income $355.2m, +34.0%; consolidated operating margin 25.1% from 23.1%
- TTM acquisitions $1,018m against $81m of capex - 12.6x, and 99% of free cash flow before M&A
- Goodwill $4,356m plus intangibles $1,777m = 61.7% of $9,937m total assets; tangible equity is negative
- Redeemable noncontrolling interests $617.9m, +32.2% in nine months; put rights start in fiscal 2031
- Net debt/EBITDA 1.57x (from 1.60x) after $550m of 4.950% 2031 notes and $650m of 5.400% 2036 notes
- Shares: 55,241,647 HEI (one vote) + 84,515,758 HEI.A (1/10 vote) = 139.76m; market cap $39.72bn
- Valuation: 46.9x TTM net income of $848m, 29.1x TTM EBITDA of $1,467m, 2.59% FCF yield before M&A
- Our fair value $219 (bear $161, base $219, bull $274) vs $336.53 on HEI and $250.06 on HEI.A
What to watch: Two more quarters of 18% organic growth at Electronic Technologies would make our fade too steep and is worth roughly $30-$40 of fair value. Flight Support organic below 12% in Q4, or acquisition spending rising again while the organic rate falls, confirms the bear case.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Box Inc (BOX) Q2 FY2027 — Shares closed the reaction session at $33.39, +1.2%, then ran to $34.98 by Friday - a 12-month closing high, and +63.7% off the April low of $21.37.
Box raised full-year revenue guidance to $1.290bn and CUT full-year non-GAAP EPS guidance to $1.54 - below the $1.55 it started the year with. The entire cut is the share count, guided from 139m in May back up to 141m in August.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$32.66 vs ~$34.98 today.
KEY METRICS:
- Revenue $321.1m, +9.2% YoY (+11% constant currency) - a record, vs a $319.3m consensus
- Non-GAAP EPS $0.40 vs a $0.3981 bar - a 0.5% beat, and Box's own May guide was $0.39
- Non-GAAP operating margin 29.4% (record) vs GAAP 10.2% - the 19.3pt gap is stock compensation
- Non-GAAP EPS grew 20.8% while non-GAAP operating income grew 12.5% - 43.8% of the growth was the share count
- Diluted shares 151.1m → 139.7m; 3.87m of that 11.38m fall was the LOW share price, not the buyback
- Antidilutive restricted units went from 479k to 5.17m as the price fell - a reservoir a rally refills
- H1 buyback: 7.386m shares at $24.47, 3.676m issued to staff, 3.710m retired net, $206.6m of cash = $55.69 per net share
- FY27 guidance walk: revenue $1.275bn → $1.280bn → $1.290bn; non-GAAP EPS $1.55 → $1.56 → $1.54
- Q3 FY27 guide: revenue ~$329m, non-GAAP EPS ~$0.39, diluted shares ~142m (ABOVE the 139.7m just reported)
- RPO $1.69bn +15%; long-term RPO $787.0m +18% (+22% cc); billings $309.5m +17%; net retention 106% from 103%
- KKR's $500m convertible preferred pays 3% compounding and converts at $27.00 into 18.52m shares - in no diluted count Box publishes
- Interest income fell 58% to $2.8m as cash went $691m → $344m funding the buyback
What to watch: A Q3 diluted share count BELOW the 142m Box guided, or stock compensation under 16% of revenue, would break our objection. A FY27 EPS guide under $1.50, or a Q4 share guide above 143m, confirms it.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Bilibili (BILI) Q2 2026 — Shares rose +3.84% on the print to $16.77, on 3.0x the thirty session median volume - the 26th best session of the twelve months, not the first. One session later they sit at $16.60, +2.79% against the pre-print close, with 27% of the move handed back. The shares are -29% on the year and 54% under the January high.
Bilibili reported Q2 2026 revenue of RMB7.94B, +8% year on year, a record gross margin of 37.2% and net profit +55%. We dispute none of it. What we dispute is the MARGIN RUN behind it. This was the SIXTEENTH consecutive quarter of gross-margin improvement - and it measured 10 bp. The first ten quarters of the same run averaged 210 bp each; the last six have averaged 19 bp. The reason is on the balance sheet: property and equipment went from RMB695M in December to RMB2.08B at 30 June, roughly 2.99x in six months, on the three-year straight-line life the annual report specifies. Research and development rose +16%, which the company attributes to higher expenses related to server depreciation - and that one line is 90% of the entire increase in operating expenses. Headcount fell by 136 over the same six months. We rate BILI a HOLD at $16.00 against $16.60.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$16.0 vs ~$16.6 today.
KEY METRICS:
- Revenue RMB7.94B, +8% YoY; gross margin a record 37.2% from 36.5%
- The 16th consecutive margin gain was 10 bp - the first ten of the run averaged 210 bp
- Revenue sharing saved 168 bp of revenue; everything else in COGS took 94 bp back
- Property and equipment RMB695M to RMB2.08B in six months (2.99x), three-year life
- R&D +16% on server depreciation = 90% of the whole opex rise; headcount -136
- Operating profit RMB373M +48%; net profit +55%; adjusted net profit +25%
- Advertising +28% and now the largest line; mobile games -14%
- H1 operating cash RMB2.95B vs RMB3.29B while net profit went +161%
- Net cash RMB14.79B = $2.18B = 31% of market value; EV $4.77B
- EV/reported operating profit 23.1x; EV/adjusted 11.8x
- Fair value $16.00 = DCF $15.07, exit multiple $16.54, trailing multiple $16.40, equal weights
- Bear $10.83, bull $22.04; three live targets $27 to $30, mean $28.67
- We match consensus on EARNINGS (our RMB8.56 vs RMB8.86 for 2027) and differ on the MULTIPLE: 8.9x vs 18.9x ex-cash
- Reported in RMB; price and valuation in USD at RMB6.7851, the company's own June 30 rate
What to watch: A September-quarter gross-margin step of 30bp or more (it was 10 bp this quarter), the property and equipment line holding near RMB2.08B instead of doubling again, or six-month operating cash turning back up (it was -10% while profit went +161%), would each move this call
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

XPeng (XPEV) Q2 2026 — Shares gapped 3.0% BELOW the prior close, never traded back to it, and closed 7.1% under their own session high at $11.15, -8.53% on the day - a twelve month closing low on 4.1x the thirty session median volume. Four sessions later they sit at $11.53, -5.41% against the pre-print close.
XPeng reported Q2 2026 revenue of $2,910M, +8.0% year on year, at a gross margin of 20.7% against 17.3%. Underneath, 49.6% of gross profit came from the services line - just 13.7% of revenue - which the company describes as technical research work billed to an unnamed carmaker on milestones. Vehicle gross profit FELL 15.0% to $303M on vehicle revenue that ROSE 1.0%, and deliveries were flat. Operating cash flow for the six months to June was an OUTFLOW of $1.73B against an INFLOW of $1.13B. We rate XPEV a SELL at a fair value of $7.02 against $11.53. XPeng reports in renminbi; every dollar here is converted once at RMB 6.7851, the company's own implied rate.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$7.02 vs ~$11.53 today.
KEY METRICS:
- Q2 revenue $2,910M, +8.0% YoY and +51.5% QoQ - but that QoQ is off a March quarter when deliveries fell to 62,682
- Services revenue $398M (13.7% of revenue) produced $298M of gross profit - 49.6% of the $602M total, vs 23.5% a year ago
- Vehicle gross profit -15.0% to $303M from $357M, on vehicle revenue +1.0%; vehicle margin 14.3% to 12.1%
- Services margin 75.1% from 53.6% a year ago, 66.5% last quarter - a milestone line, not a run rate
- Deliveries 103,295 vs 103,181, +0.1%; H1 deliveries -15.8%, H1 revenue -3.8%
- Loss per ADS $0.21 vs a $0.06 estimate - 3.5x the modelled loss; an ADS is TWO ordinary shares
- Net loss widened $127M, only $31M of it operating - $96M is below the line (FX $39M, marks $24M, interest $21M, tax $12M)
- R&D $430M, +32.1%; SG&A $368M, +15.2% - annualised costs $3.19B vs gross profit $2.41B, or 1.32x
- H1 operating cash flow MINUS $1.73B vs PLUS $1.13B a year earlier - a $2.85B swing; inventory +32.3%, payables $336M
- Borrowings $1.87B to $2.91B, +55.5%; gearing 41.8% to 73.2% - both reproduce from the filed lines
- The $5.97B cash position is NOT balance sheet cash: $2.10B is cash, $1.42B (23.8%) restricted; net cash $1.64B
- Q3 2026 guide: deliveries 115,000-121,000 (-0.87% to 4.30% YoY), revenue $3.20B-$3.45B
- Robotics round: every tranche at $2.03 a share, reproducing the filed 68.41% retained interest; stake marked $1.84B, $615M of it redeemable against XPeng
- Market value $11.03B on 956.7M ADS (Class A + B, filed count); EV $9.39B = 0.85x revenue of $11.07B
- Fair value $7.02: parts $9.16, whole company at 0.55x revenue $8.46, DCF $3.64 - weighted 35/35/30
- Bear $4.66 to bull $17.19 - a 3.69x range; the three ROUTES disagree by 152%, wider still
- One target since this print - Barclays $14.00, itself +21.4% ABOVE the close; the other four are 91-290 days old
What to watch: A quarter in which VEHICLE gross profit grows year on year (it fell 15.0% this time), a half year of operating cash flow that is merely FLAT rather than the $1.73B outflow just reported, or a services line that repeats at scale without a milestone behind it, would each break our thesis
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Nutanix (NTNX) Q4 FY2026 — Shares gapped 8.9% ABOVE the prior close on the reaction session, reached +13.8% intraday, then closed 6.2% under their own session high at $69.84, +6.81% on the day - and one session later they sit at $69.16, +5.77% against the pre-print close.
Nutanix reported GAAP diluted EPS of $5.17 for fiscal 2026 against $0.65 a year ago. Approximately $1,208M of that - $4.14 per diluted share - is the release of the valuation allowance on its US deferred tax assets, an item Nutanix names itself as adjustment seven of its own GAAP reconciliation. Net income of $1,507M sits on pre-tax income of $327M, and cash actually paid in income tax for the year was $30M against $33M last year. Strip only that item and reported EPS is $1.03, real growth of +59.2%. The company's own adjusted figure is $2.04 against $1.62, up +25.9%. Meanwhile FY2027 revenue is guided to $3.18B-$3.23B, or 12.3% at the midpoint, against 12.4% just delivered - and the FY2027 operating margin ranges imply 23.7% for the last nine months, below both the 27% Q1 guide and the 26.2% Q4 just printed. We rate NTNX a HOLD at a fair value of $59.39 against $69.16.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$59.39 vs ~$69.16 today.
KEY METRICS:
- Q4 revenue $757M, +15.9% YoY - a beat vs the $738M estimate; FY2026 revenue $2.85B, +12.4%
- Q4 adjusted EPS $0.60 vs a $0.49 consensus - a beat of 22%
- EPS basis PROVEN: the four filed adjusted quarters $0.41, $0.56, $0.47, $0.60 add to $2.04, the filed annual figure
- GAAP diluted EPS $5.17 vs $0.65 - but $4.14 per share of it is the valuation allowance release
- Net income $1,507M on pre-tax income of $327M - 4.6x more after tax than before it
- Cash paid in income tax $30M vs $33M last year; the booked benefit is 39x the cash
- Ex-release reported EPS $1.03 vs $0.65 a year ago; adjusted EPS $2.04 vs $1.62, +25.9%
- Q4 adjusted operating margin 26.2% vs 18.3%; FY2026 23.7% vs 21.1%
- ARR $2.55B, +15.8% (methodology re-cut in Q1 FY26, priors restated); RPO $3.44B, +27.8%
- FY2027 revenue guide $3.18B-$3.23B = 11.4% to 13.2% growth, 12.3% at the midpoint vs 12.4% delivered
- FY2027 margin: Q1 guided 26%-28%, full year 24%-25% - the last nine months imply 23.7%
- FY2027 FCF guide $850M-$950M = +7.1% at the midpoint, against +12.1% growth this year
- FY2026 free cash flow $841M, +12.1%; stock comp $358M (12.5% of revenue); owner earnings $483M
- Buyback $484M exceeded stock comp by $126M; diluted share count FELL 0.65%
- Equity flipped from a $695M deficit to $703M - 86% of the swing is the deferred tax asset
- Fair value $59.39: DCF $57.96, 26x adjusted EPS $60.15, 30x owner earnings $60.62 - all BELOW the $69.16 close
- Bear $35.17 to bull $86.04 - a 2.45x range; Street median $80.00 is ABOVE the price
What to watch: A quarterly update lifting the FY2027 revenue guide above 14% growth, a FULL YEAR of adjusted operating margin above 26% rather than a quarter of it, or owner earnings (free cash flow less stock compensation, $483M today) clearing $600M, would each break our thesis
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

NVIDIA (NVDA) Q2 FY2027 — Shares gapped 6.3% ABOVE the prior close and closed 1.1% under their own session high at $227.98, +8.74% on the day - the best session of the twelve months on 2.6x the thirty session median volume. One session later they sit at $217.55, +3.76% against the pre-print close, with 57% of the move handed back.
NVIDIA reported Q2 FY2027 revenue of $96.2B, +106% year on year, at a gross margin of 75.0%, and beat the bar with adjusted EPS of $2.22 against $2.09. We dispute none of it. What changed is the FUNDING of that quarter. Operating cash was $24.1B against $59.7B of net income - 40 cents per dollar of profit, from 58 cents a year ago - because receivables absorbed $22.3B, or 23% of everything sold. Days sales outstanding went 45 to 60 on terms the 10-Q says run to ONE YEAR for investment-grade buyers, and five customers now owe 70% of a $63.1B book. NVIDIA issued $24.9B of senior notes and disclosed $108.5B of guarantees, $105B of it on twenty-year leases at one Ohio campus. We rate NVDA a HOLD at $190.48 against $217.55.
THE CALL: HOLD (3 / 5/5, MODERATE) — base-case value ~$190.48 vs ~$217.55 today.
KEY METRICS:
- Revenue $96.2B, +106% YoY and +18% QoQ; data center $89.0B (+117%), edge computing $7.2B (+27%)
- Adjusted EPS $2.22 vs a $2.09 bar (a 6.2% beat) - and the bar was RAISED into this print, from $1.76 for the April quarter
- Reported EPS $2.46 is ABOVE adjusted $2.22 - the adjusted figure REMOVES $7.8B of gains on equity stakes NVIDIA holds in other companies
- Operating cash $24.1B on $59.7B of net income = 40 cents per profit dollar, from 58 cents a year ago and 86 cents last quarter
- Free cash flow $21.3B, -56% QoQ and only +59% YoY against revenue +106%; FCF margin 22% vs 29% a year ago
- Accounts receivable $63.1B from $38.5B in January; DSO 45 to 60; terms disclosed at 90 days up to ONE YEAR for investment-grade buyers
- Five direct customers hold 22/14/13/11/10 = 70% of the receivable book (three at 25/18/13 = 56% in January)
- Supply and capacity commitments $119B to $279B in one quarter ($160B added, primarily memory); total commitments $422B
- Guarantees $108.5B: $105B on the SB Energy PORTS-Pike campus in Ohio, leased 20 years to OpenAI, plus $3.5B for other AI clouds - 47% of shareholders equity
- Issued $24.9B of senior notes ($33.5B outstanding) while returning $25.8B to shareholders and buying $15.8B of equity stakes on $24.1B of operating cash
- Q3 FY2027 guide $108B (+12% QoQ) with NO China data center compute assumed; gross margin guided DOWN to 74.0% from 75.0%
- Fair value $190.48: cash-flow route $170.74, earnings route $219.93, exit-multiple route $180.78, weighted equally; bear $108.91, bull $304.43
- Five targets published the morning after: $300 to $465, median $315 - our bull case sits within $4.43 of the LOWEST of them
What to watch: Days sales outstanding holding at 60 or coming back toward 50, operating cash conversion back above 60 cents on the profit dollar (it was 40 cents this quarter), or the Ohio phases entering service with the leases paid, would each move this call
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Bilibili (BILI) Q2 2026 — Shares rose +3.84% on the print to $16.77, on 3.0x the thirty session median volume - the 26th best session of the twelve months, not the first. One session later they sit at $16.60, +2.79% against the pre-print close, with 27% of the move handed back. The shares are -29% on the year and 54% under the January high.
Bilibili reported Q2 2026 revenue of RMB7.94B, +8% year on year, a record gross margin of 37.2% and net profit +55%. We dispute none of it. What we dispute is the MARGIN RUN behind it. This was the SIXTEENTH consecutive quarter of gross-margin improvement - and it measured 10 bp. The first ten quarters of the same run averaged 210 bp each; the last six have averaged 19 bp. The reason is on the balance sheet: property and equipment went from RMB695M in December to RMB2.08B at 30 June, roughly 2.99x in six months, on the three-year straight-line life the annual report specifies. Research and development rose +16%, which the company attributes to higher expenses related to server depreciation - and that one line is 90% of the entire increase in operating expenses. Headcount fell by 136 over the same six months. We rate BILI a HOLD at $16.00 against $16.60.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$16.0 vs ~$16.6 today.
KEY METRICS:
- Revenue RMB7.94B, +8% YoY; gross margin a record 37.2% from 36.5%
- The 16th consecutive margin gain was 10 bp - the first ten of the run averaged 210 bp
- Revenue sharing saved 168 bp of revenue; everything else in COGS took 94 bp back
- Property and equipment RMB695M to RMB2.08B in six months (2.99x), three-year life
- R&D +16% on server depreciation = 90% of the whole opex rise; headcount -136
- Operating profit RMB373M +48%; net profit +55%; adjusted net profit +25%
- Advertising +28% and now the largest line; mobile games -14%
- H1 operating cash RMB2.95B vs RMB3.29B while net profit went +161%
- Net cash RMB14.79B = $2.18B = 31% of market value; EV $4.77B
- EV/reported operating profit 23.1x; EV/adjusted 11.8x
- Fair value $16.00 = DCF $15.07, exit multiple $16.54, trailing multiple $16.40, equal weights
- Bear $10.83, bull $22.04; three live targets $27 to $30, mean $28.67
- We match consensus on EARNINGS (our RMB8.56 vs RMB8.86 for 2027) and differ on the MULTIPLE: 8.9x vs 18.9x ex-cash
- Reported in RMB; price and valuation in USD at RMB6.7851, the company's own June 30 rate
What to watch: A September-quarter gross-margin step of 30bp or more (it was 10 bp this quarter), the property and equipment line holding near RMB2.08B instead of doubling again, or six-month operating cash turning back up (it was -10% while profit went +161%), would each move this call
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DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.