Opportunity: October 2024

A Leader in an Unloved Category

Introduction 

Formerly a market darling, this month’s Opportunity Report profiles a Company that’s lost its investor appeal in the post-pandemic world. The shares have fallen >75% from their all-time high a couple of years ago and have been stuck in neutral for several quarters. But that might be about to change . . .

Recently, multiple high-profile activist investors have taken notice, each looking to unlock value. While the market has been overlooking the business (which dominates its niche with ~50% market share), its revenues, profits, and free cash flow (FCF) have been quietly improving, making its current valuation look appealing. Both management and the activists see the stock as deeply undervalued, with significant buybacks already underway. We believe the Company’s long-term growth potential is stronger than the market currently recognizes, positioning it as a compelling opportunity.