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Analyzing Four Stocks Hitting New Lows: Nike, PayPal, Hims, and Tesla
0:24 Nike (NKE) Facing Headwinds: Nike stock is down significantly, with Q3 FY25 revenue falling 9% YoY, driven by declines across all regions (especially China, down 17%) and in Converse (down 18%). Gross margins also contracted. Q4 outlook anticipates further mid-teen revenue decline and margin compression.
3:51 Increased Competition for Nike: Newer brands like On Holding (reporting ~30% growth, 60%+ gross margin) and Lululemon (strong growth, especially in China, ~58% gross margin) are gaining market share, suggesting Nike's issues (particularly in China) are company-specific. Nike's PE ratio of 22 is considered unattractive given the declining metrics and strong, lower-PE competition like Lululemon. The creator avoids the unpredictable apparel sector.
7:31 PayPal (PYPL) Shifting Strategy: PayPal stock is down 77% from highs. Q4 saw 4% revenue growth but declines in GAAP operating income and margins. PSP (unbranded Braintree) volume growth decelerated sharply (+2% vs +29% YoY) due to a strategic shift under the new CEO prioritizing profitable growth over sheer volume by adjusting pricing and contracts.
10:26 PayPal's Profit Focus and Valuation: The strategy is improving gross/operating margins, which the creator views positively. 2025 outlook includes 6-10% EPS growth and ~$6B in buybacks (~100% of projected $6-7B FCF). Trading at ~10x projected 2025 FCF (10% yield), the stock appears cheap, but the creator lacks conviction due to competitive pressures and prefers other holdings.
14:07 Hims & Hers (HIMS) Strong Momentum Despite Pullback: Hims stock is down ~47% from its recent peak. Recent data shows strong momentum in app downloads (+47% YoY) and web traffic, largely driven by explosive growth in the 'Hers' brand (+212% YoY download growth). The company continues to expand verticals and gain market share (~47% in telehealth).
16:52 Hims' Growth Outlook and Profitability: Hims projects strong FY25 revenue growth (~60% YoY) and significant adjusted EBITDA margin expansion (to 12-13%). Operating cash flow is growing much faster than stock-based compensation, suggesting high profit potential. The creator remains invested, seeing the current valuation as potentially attractive given the growth trajectory.
20:38 Tesla (TSLA) and Cathie Wood's Target: Cathie Wood reiterated a $2,600 price target for Tesla by 2030, largely based on the potential of robo-taxis (projected 80%+ margins, 90% of company value in 5 years). This implies a ~$9 Trillion valuation.
22:38 Creator's Skepticism on Tesla Target: The creator deems the $2600 target unrealistic, calculating it would require 70% annual operating cash flow growth, making Tesla the world's most profitable company within 5 years, despite existing competition like Waymo (Google) already operating robo-taxis and headwinds in Tesla's current business.
25:16 Tesla vs. Competition and Valuation Concerns: Competitor BYD is growing revenue faster than Tesla and trades at a much lower multiple (9x vs 60x OpCF). The creator argues Tesla's current valuation already prices in massive future success as a high-margin software company, making it still "extremely overvalued" even after its price decline.
27:21 ASML and Potential China Competition: News emerged of a potential Chinese breakthrough in EUV lithography (reaching 13.5nm). While not yet matching ASML's leading edge (5nm), if commercialized, it could bypass Western tech restrictions and potentially impact ASML's significant China sales (~20%) long-term, though it's not seen as an immediate threat to ASML's moat.