I Ranked 6 Stocks After Earnings — Only 1 Makes My Buy List

Six companies have reported. I've updated the valuations and the results give us very different answers about where I'd put new money today. I mean, the biggest upside on today's screen, it's nearly 100%. But that comes with a cash flow assumption that could change the whole verdict. We're going to test that properly. But first, let's get straight into SoFi. We can see they're up 13% after reporting their earnings yesterday. Would I still consider buying after that move? Yes, but the position size, it matters here. Now, they're still down 37% in 2026. Over the last year, they've lost nearly half of their entire market cap, and they're still trading around 52- week lows. Where Wall Street, they actually believe so far as a halt. See Alpha, they give it a 4.4. That's near a strong buy rating. Where their adjusted revenue, that grew 44% to $1.4 billion. Adjusted EBIT DAR, that was up 70% year-over-year. Profit is growing considerably faster than revenue, which is exactly what I wanted to see. And management, well, they now expect 61 cents of adjusted earnings this year, followed by 90 cents next year. The next year outlook is the main reason that this report changes the investment case for me. And look, SoFi now has around 17.1 million members and 26.7 million products. Now, these are totals. Obviously, they've not added them in a single quarter, but it's a very, very good sign to see. The growth is immense. We're talking yearon-year members 35%, products, they're up 44%. I mean, specifically, if we look at members, well, we can see the customer base is growing very rapidly. But what I want to see is customers doing more with SoFi rather than just opening an account and disappearing. That's where products per member becomes very useful. Now, product per member is actually moved up to 1.56. This is the improvement that I'd always say matters for a company like SoFi because selling another useful product to an existing customer, it can make the original acquisition cost work much harder. And 51% of new products, they were open by existing members. It helps explain why the growth story is becoming more interesting than just the headline membership number on its own. Vebbased revenue that's reached roughly $571 million. That's up as we can see here 40%. It now represents 42% of adjusted revenue. That's a meaningful part of the business overall. And look, both the revenue and profit charts, they show more revenue reaching the bottom line as SoFi scales. That improves the investment case provided credit costs don't start eating away at those gains. and reported personal loan charge offs. They're around 2.3%. Without late stage delinquent loan sales, the estimate, as we can see here, is 3.4%. Both improved, but I'd still keep watching them. Now, if we bring that back to next year's 90 earnings guide at 1640, we're looking a little over 18 times those earnings. I would say that's a pretty useful starting point for SoFi. Now, analyst overall, we can see they're slightly lower, coming in at 88 cents next year. and then the following year coming in at $19. There is room for disagreement, but I'm not going to build the whole case on SoFi around the highest estimate and the intrinsic value that we get today from the DCF comes to just below $22. But if we look at the starting point, we can see free cash flow that's actually negative. Then it turns negative again in 2026 for the full year. These are analyst expectations and then a sharp turn positive that's doing much of the important work. Now, so far they do actually have negative operating cash flow with a lender. Loan originations and sales affect that number. So, I wouldn't read it exactly like a software company's cash burn. It means the model needs more care. Cash use of fund loans and cash available to shareholders. They're not interchangeable. Funding requirements and capital needs, they belong in the analysis as well. So, around 33% upside for the company as well as a margin of safety of around 25%. It isn't something that I take at face value. It's an output from the assumptions. The earnings outlook, it provides a separate check. And the sensitivity table here, it makes the uncertainty clearer. Lower growth, we're talking 10%. It gives only $15. The middle case 22 and the higher case around 30. They're very different outcomes for the exact same company. Now, in terms of Wall Street, they forecast around $21% upside. The average price target does sit around $20. Although we can see the range very wide for SoFi, 12 at the bottom end, 30 at the upper end. For me, the practical question is whether SoFi can deliver something close to that 90 outlook while keeping credit under control. If it can, trading around $167 is reasonable for a starter position. If credit weakens materially, I'd reassess. Faster customer growth would cancel that out. This is a business where the quality of the loans matter alongside the number of new products. My SoFi verdict is this. A higher risk small position candidate. I prefer an entry around $15 at around $1617. I could justify starting carefully rather than committing the full amount immediately. That's the approach throughout today. What's changed? What could go wrong? And what price makes sense? If that's useful, smash the like button, hit the subscribe and bell button so you're aware of future releases. Now quickly let's jump into the wider market backdrop and something worth reminding very important so far we can see here the equal weight index is ahead of the S&P 500. It gives us a reason to look beyond the biggest technology names for opportunities today. I mean we can see 72 companies they've issued positive third quarter earnings guidance against a 10-year average of 40. That's guidance above expectations. It is an account of reported earning beats. And Tom Lee's latest fund strat note, it expects a less hawkish Fed message. That's his forecast. I'm not going to assume that cheaper money is guaranteed when deciding what to pay for these businesses. And Jenny Harrington made a useful related point after mentioning strong reports from Coca-Cola and S&P Global. Listen to her conclusion because it explains why today's list covers different businesses. >> Everyone has strong upside. And so I think we need to like broaden the lens on realizing that maybe all of this economic activity from AI is bleeding out further >> and that's a reason to broaden the research but strong results don't settle the buying decision. Coke that's going to show us that clearly. But first let's take a look at Visa's results and price. Now Visa is the kind of business I'd be happy to research for a long-term portfolio. The question today is whether the entry price gives me enough room for things to disappoint. Now it's up around 15% year to date over the last 10 years is up around 400% and it's trading towards 52- week highs with a strong buy from Wall Street. Very weak buy from Seek Alpha. And quarterly revenue, it grew 13% to around $12.1 billion. Adjusted earnings, we can see that rose to $348. These are strong numbers for a business of this size. And look this transaction volume chart. It shows us the underlining activity building over time. That's the engine I care about for Visa. More spending passing through the network with Visa collecting revenue across that activity. I mean we can see their payments volume that grew 9%. Process transactions well that was up 10% and crossber volume excluding transactions within Europe. Well we can see that was up 14%. The growth is coming through several useful measures rather than one isolated number. And profitability, it shows why investors happy to pay a premium for the company. The margins are exceptional. Gross profit 98%, operating margin 67%, bottom line net income 51%. All of these not only very strong, but significantly higher than the sector. In some instances, we're talking more than 100%. And for the new financial year, management expects low double-digit revenue growth on its adjusted constant currency measure. The earnings outlook is also healthy, so I don't see a broken business in the guidance today. And analysts, they're expecting around $15 of earnings per share in 2027, rising to $1712. At around the current price, the multiple sits around $2627. I have to say that is still a premium valuation. And history, it does give us context. We can see today pretty much sitting in line with their own 5-year average. This you could argue is a potential reasonable signal for which when we look at the blue tunnel from simply safe dividends which highlights intrinsic fair price, it is sitting firmly in there. Another potential indicator of reasonable valuation. There was also 16% as we can see here dividend increase taking the quarterly payment to 78. That's welcome for an income investor though obviously the starting yield it does remain modest at the share price today. leverage as well always great to see. It looks manageable for Visa. It supports the quality argument and gives Visa flexibility. It doesn't remove the need to ask how much future growth the current share price already assumes. And in terms of valuation where for their fullear free cash flow was around $22 billion. We can see we've used 12% growth very slightly higher than their 10year KGA 9% discount rate as well. Essentially with all of these factors, it gives us a value of $45 indicating upside very marginally around 3% in terms of a margin of safety that's sitting two to three. So the model overall isn't suggesting a large buying cushion even though the company itself does look very strong. Wall Street they are pretty much in agreement as well. Whilst they do see upside, it is fairly trivial. We're talking 8% over the next year. Although more bullish do see it around 480. Now the lower growth case for Visa we can see comes to $347. The stronger case $473. The spread here it shows you how much results depend on maintaining attractive cash flow growth. It's why I keep watching payments and crossber activity. These operating trends help test whether the cash flow growth assumption remains sensible. I don't want the valuation disconnected from the business. And the reverse valuation is coming to 11.7% growth just to justify today's price is very close to the 12% growth that we've used. So there's very limited room for disappointment. I personally prefer looking at this somewhere around the 345 region to $360. It gives a meaningful discount to the estimate. The earnings are strong for Visa, but I personally still be patient. So for me today, Visa is a hold or a watch list name. I'd wait with new money. Waste management gives us a different problem is valuation methods. They completely disagree. Now waste management it is often bought for durability. The shares they are slightly weaker down around 3% today after their earnings. Year to date they're up only 4% over the last 10 years though they have done fairly well up 261 trading mid to upren 52e range. Hold from seek Alpha respectable buy from Wall Street and their adjusted earnings we can see here $2.15 against expectations of 218 revenue slightly ahead is a small miss so I'm going to look beyond it before judging the investment case now when we take a look at their performance in a bit more detail revenue grew roughly 6% adjusted earnings around 9% the figures they show continue progress but it's also a reminder to separate operating growth from the market's reaction to expectations s in terms of Wall Street another company where they see fairly trivial upside 11% over the next year range it is a little bit more narrow than others that we've discussed 220 bottom end 277 at the higher end and I'd say overall profitability table here it does show some very strong returns however we can see there is some considerable capital expenditure capex sales coming in around 11 to 12% for a business with ongoing reinvestment needs the cash left afterwards that's particularly important And that's what I want the price to reflect. You've got adjusted EBIT DAR which is increasing but the adjusted margin was actually 31% against 31.1% a year earlier. So I'm not going to describe this recent quarter as a large underlining margin expansion. That's just not what the numbers are showing us. And analysts for this full year are expecting $8.13 jumping then to $99. At 2027 next year's multiple it sits around 26 on forward earnings basis. continue growth is already being valued and we can see current forward valuation. It is sitting slightly below their 5year average although marginal 26 versus 27 and a half yield marginally above 1.7 versus 1.6. Both of these again indicating potential reasonable signal or maybe slight undervaluation. Something that's pretty much confirmed when we look at the blue tunnel. Although bear in mind this is a company going all the way back very very rarely sits in an undervalued level. And another thing just to consider their net dead. Yes, it has improved from the higher levels of 2024 at 3.6 but still sitting fairly high 2.74. It is expected to improve although slightly. So it is helpful but I'd say leverage still matters for when we get to the equity valuation. Analysts are forecasting $3.8 billion of future free cash flow in 2026. We've then assumed around 10% growth moving forwards. Now bear that in mind. We are also using a 9% discount rate to be consistent. 5 year and 10 year KGA they are lower than what we're using but last two years they've been strong double digit. It then gives us a value of $196. Now what I would say is if we were to use the combined blended valuation multiples 260 DDM at 270 the intrinsic price it comes to $242. But I need to understand why the answers really differ because in reality they are fairly different. multiples and DDM they're not too dissimilar. DCF that's coming in lower. I mean if we take a look here at the scenario table 8 10 and 12 well 8 and 10 they are both negatives 12% very trivial upside sitting around 3%. So I'd say today's price it already needs a fairly good outcome and the reverse DCF is actually coming to around 11.7%. It just shows you how much is already baked in that even our middle rate actually sits below. So for waste management, I prefer it actually around $180 to $190 for new money based mainly on cash flow. Waiting to buy though it doesn't automatically mean that existing shareholders need to sell. And Coca-Cola, well that gives us a clearer valuation verdict. Strong results, but all three methods we can see they're below today's price. We're going to see whether the earnings justifies the premium investors are paying for this business. Now Coca-Cola is already enjoyed a very strong year. is up around 31%. Over the last 10 years, though, we can see up only around 119, trading near 52- week all-time highs of $95. We get a respectable buy from Wall Street, although C alpha coming in with a hold. And their revenue where it reached roughly 13.4 billion that was up 7% comparable earnings 91% up 11% and the encouraging detail is 5% unit volume growth alongside 1% price and mix. There's meaningful volume growth which gives earnings improvement more substance and operating income. It reached around $4.5 billion. That's up around 12%. This is a very profitable business and the quarter gives investors reasons to feel good about the operating performance and their year-to-day free cash flow that sits around 11.4 billion. That's very substantial for Coca-Cola. For the valuation though, I need to judge how much can be sustained rather than simply celebrating the total. Now in our model alongside analysts we have used $13 billion that's consistent with their guidance from then we assume around 10% growth moving forwards that's already I would say fairly meaningful compounding assumptions for the company I mean 5year ke flat 10ear at six reverse DCF tells you how much of a premium this company is sitting at 12.6% 6% and Wall Street, even though they clearly like this one, they only see 6% upside over the next year. The range wide, especially on the bottom end at $80. Upren sitting at $106. And we've got earnings forecast here. They are a lot more measured. We can see $3.33 for 2026, then $3.52. At around $90, it still leaves a next year multiple sitting around 26. And from a historical basis will the forward PE it sits above the 5-year average yield sitting below forward valuation 26 versus 23 yield 2.3 versus 2.9 investors today for Coca-Cola are paying more for each dollar of earnings and receiving less starting income where the DCF on its own it produces a value of $74. The reverse calculation as we said 12.6 now the multiples valuation does come higher to around $87. dividend model coming to 74 with the blend coming to 78. Every single one coming below $90. So today's conclusion for Coca-Cola, it isn't resting on just one calculation. Now the leverage chart for the company that's reassuring net debt to EBIT D sitting at 1.4. It helps explain why I'd be comfortable keeping the business on a quality watch list while waiting on the price. Personally for an income investor, a lower entry would also improve the starting yield. It's useful here because the current year we can see is below the historical price. It affects the income too. Say for Coca-Cola, I'd be more interested around 70 to $75. The lower end gives a discount to the blended estimate. For me, $90 is a holder of weight despite the strong quarter. That's why Jenny's earnings point and my buying verdict can both be right. The company, if reported well, the price still matters. SMB Global, that brings us closer to a reasonable valuation. Now, SMB Global is one of the more interesting quality names on today's list. The discount is modest, so the business changes deserve careful attention. I mean, year to date, they're down 14%. Over the last 10 years, though, they've done fairly well, up 266, still trading towards 52- week lows. Strong buy from Wall Street, near strong buy from Seeking Alpha. And their revenue, it grew 7% to around 3.7 billion. Adjusted earnings, we can see that rose around 9%. The strategic review adds another question about the company's future shape alongside the results they released. Adjusted earnings were $4.58 against $420 from continuing operations. That's the relevant comparison after the mobility separation comparing different versions of the company is going to end up giving a misleading growth rate. And the segment chart shows why I'm not going to treat S&P Global as one uniform growth engine. Market intelligence, ratings, energy, and indices, they contribute differently. Their growth rate and sensitivity to activity they also differ too. And Wall Street they see 17% upside over the longer term. Average target 522 range without the upren not too dissimilar. Lowend 485. And profitability it shows the attraction very clearly. We're seeing some nice margins. Growth 71 above the sector at 61 above their own 5year at 69. Net income 31% again above both sector and the historical. On top of that strong cash generation, sitting at 6 billion above their 5year average of 4.3. This is a business where relatively modest revenue growth. It can still support attractive earnings provided costs remain controlled. Indices, they stand out here. Ratings is larger, but growth has been more restrained. The mix matters because I'd rather understand the contributors than simply just extend this total revenue line. and management. They expect as we can see here adjusted earnings between $17.70 to $1795 this year. It supports the near-term case. Now we have to consider are the longerterm cash flow assumptions reasonable. Analysts they expect around $2020 in 2027 rising to around $23 and around the current price today while the forward P based on 27 numbers sits at 22. Further growth is going to bring the multiple down. And look, the historical chart here, it looks more appealing than Coca-Cola's forward valuation sitting at 23, much lower than the 5-year 29 yield pretty much sitting in line. For the company SMB Global, it has changed. So bear in mind, I'm not going to assume the old average is an automatic destination for the shares. Earnings definitions, they matter here. And the Capital IQ review is an additional moving part. A possible separation could change the investment case. At this stage, I wouldn't put an assumed windfall into the valuation before understanding the terms. Now, the model starts with $4.9 billion of expected continuing operations of free cash flow. I'm not treating the difference from older total company figures as an organic decline where their leverage here is also fairly comfortable. Net debt ebiting around 1.3. It provides some support for the quality case while we consider the uncertainty around the portfolio changes. Now using 12% and the discount rate of nine bearing in mind their 10year kager is higher at 16 5year keer not too dissimilar we get an intrinsic price of $474 indicating upside not massive 7% margin of safety sitting around 6 if we were in fact use the higher rate of 16% while it comes to 632 the lower case well that's 6% 304 substantially lower downside around 32%. Now, we do get a margin of safety, yes, 6 to 7%, and it is a better starting cushion than Visa's model offers, but I wouldn't really say this is a large MOS. And given the scenario ranges are quite wide, I would say it tells us that the compounding assumption matters far more than the precision of the estimate. For me personally, for S&P Global, I prefer an entry around $400 to $420. Existing holders may reasonably keep compounding, but if I want new money into the company, I want more breathing room before committing. Now, we get to SKH Highix. The model is showing a much larger discount than the others. But I'll test the biggest assumption before calling it the best buying opportunity today. Now, even though the company is down around 12% in just the last 30 days, after reporting their earnings, we can see they're up around 12% where their trading is still around the mid to low end of 52 week range. Strong buy from Wall Street, much weaker buy from Seeking Alpha. And if we just look at the last month in the market, well, we can see weakness across parts of the semiconductor trade. SK Highix, it gives us company results to test against that view. Quarterly revenue, well, that reached roughly 105 trillion one. Operating profit was around 83 trillion. They're enormous figures. Bear in mind, obviously, they're reporting Korean one. These aren't US dollars. and their operating profit that increased more than sevenfold from a year earlier with an operating margin around 80%. This latest quarter is showing us extraordinary profitability. And these are their official slides showing revenue rising roughly 32% from the previous quarter. Very strong momentum, but honestly it raises a very important question. How much of this quarter can I personally treat as being sustainable? Dram accounts around 3/4 of quarterly revenue here. NAND is roughly another quarter. So the investment case remains heavily connected to memory pricing, product mix and customer demand. Now Wall Street very bullish. They see around 53% upside over the next 1 month. Average target 250. Also bear in mind another wide range 150 from the more bearish analysts, 320 from the more bullish. And this is the spending chart that puts next year's hyperscala capital expenditure over $1 trillion. Now these are consensus estimates but they support the demand discussion. Obviously side note as well they aren't guaranteed orders for SK highix and look analysts they're expecting earnings here to rise from around 2650 to around 33 just shy of by 2027 and then to around 4142 against the price today. Well we can see the forward valuation looks incredibly low. Profitability table here it looks extraordinary too. Bear in mind their trading measures. I'm not going to combine the best trading measures with highest future growth estimates and assume both are going to continue without interruption. But look, gross margin 76%, net income margin 86%, operating margin 68, return on capital 41. Each one looking extraordinary, cash generated from operations 82 billion. And you can see the financial position slides chain cash well above debt. Now it's a buffer, but cash from the balance sheet and recurring annual free cash flow, they're different numbers. The model is going to need to both treat it correctly where you can see when we look at leverage we get in fact zero net debt here which reflects the net cash position doesn't mean obviously again the company's got no borrowings for valuation I need cash debt and share count definitions to remain consistent now look at the model starting cash flow 80 billion US for 2026 that is the massive massive key assumption here and the later 5% growth that we use where we be more conservative it doesn't make the whole model conservative. What I would say is I want to flag it. I've used 80 billion analysts. They're actually expecting more than 100 billion. So I've tried to be very conservative. Definitely something I just want to point out. And with these inputs, again, 9% discount rate here, we get a valuation of $221. Compared with the price, we're talking around 96% upside. That's a margin of safety just shy of 30% and the biggest apparent discount in today's group. Now again I want to remind you when we look at the historical figures 2025 it was much lower 18.2 billion. So this is a massive massive jump. I'm also don't really want to say that 5% is conservative because it's going to miss much of the larger starting point assumption. And these exceptional profits explain why a higher cash flow outlook is plausible. They don't establish that $80 billion is the right sustainable figure after investment. That's obviously going to have to be checked separately. And look if we were to play around with it together. Let's change the 80 billion to let's say 60. We get a completely different result. You'll notice the value drops around $167. Is why the base matters to me more than the undervaluation. And another factor to note is next year's earnings estimate. It ranges from roughly $2345 to $46. We can see on the higher end. That's a substantial disagreement. I consider the range and how it can affect returns before deciding on the position size today. And as you'd expect, if we were to drop this even further from 60 billion to let's say 40 billion, well, in fact, the discount it completely disappears. We get an overvaluation signal. And back to using the 80 billion, the fact that we've got a negative reverse ECF of4%. Bear in mind, it does depend on 2026 becoming fairly accurate or at least being the bare minimum. But you can also say it does suggest that some decline is also affordable from here. It just doesn't establish value for every reasonable starting cash flow assumption. There is also another distinction in their own official slides. Operating profit is different from net profit in cash flow. The nonoperating losses that we can see help explain why the figures can move in completely different directions. For SKH Highix, I keep watching the memory mix and whether the strength remains broad enough to support these margins. A single strong product cycle, it can make earnings multiples look deceptively low. My verdict, the highest potential research opportunity with a conditional case around 156. In terms of my order of preference today, I'd say SoFi is my first small starter candidate around today's price with around $15 being preferred. Delivery against the 90 earnings outlook and control credit losses drive that view. SK Highix that's second for potential conditional on the cash flow continuing the $221 figure is just a scenario I'm not going to anchor a purchase just to this value Global is third overall and first among the steadier watch list names I prefer $400 to $420 using consistent continuing operations valuation Visa is fourth I'd happily keep researching but the current model gives too little cushion around $345 to 365 $5 that would be much more interesting. Waste management that's fifth. The blended estimate was more generous than the cash flow model. I prefer around $180 to $195 for new money today. And Coca-Cola, it's sixth for new money at these prices. Good results, but insufficient value at $90. Around 70 to 75 would make the income and the valuation combination much more interesting. And tonight, Microsoft and Alphabet give us the next major test. Tomorrow, I'm going to go through their actual earnings and updated valuations, including what their spending plan means for the wider AI investment case. But let me know your own thoughts below. Which of today's six would you buy first and at what price? If you enjoyed and the video helped, smash the like button. Don't forget to subscribe for tomorrow's update. And if you click on the pin comment below, you can sign up and read our weekly articles where we cover severely undervalued stocks as well as what's gone in the market. More importantly, have a great day. I'll see you all on the next one.