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The big news from this week was Micron earnings. Our full review was already published and can be found here. Outside of that, it was a very quiet few days and will likely remain that way until mid-to-late July. This is the slowest part of the year when Wall Street goes on vacation.
1. Free Cash Flow Growth Multiple Comp Sheets
A few notes on the data:
FCF growth multiple is a variation of the PEG ratio that uses free cash instead of net income for calculation.
Instead of using 1 year of profit growth to calculate the multiples on the right side of the images, I use 2-years of compounded annual profit growth.
Oracle, Applied Optoelectronics, Lumentum and Intel are excluded due to lack of positive FCF for the given period. Qualcomm is excluded due to negative FCF growth over the given period.
I skipped a year for Mediatek profit growth to avoid -45% Y/Y FCF growth and so I could include it in the chart. I also skipped a year for Micron/SanDisk profit growth to avoid 2 more extreme outliers.
a. Mature Growth Software
b. Fast Growth Software
c. AI Infrastructure
2. Lemonade (LMND) – Growth Financing Update
Lemonade added a new capital market partner this week in Hannover (one of the large reinsurance companies in the world based in Ireland). This will be for up to $250M in growth spend financing and begin January 2027. The most exciting part of this news is the interest rate on borrowed money vs. what they paid General Catalyst. At the current Fed funds rate, it would be about 6 points cheaper (little over 10% rate). A great sign of Lemonade’s maturation, rising underwriting reputation, growing brand awareness, & improving balance sheet. This will let them get even more aggressive on pursuing more growth, as the cost associated with doing so is now significantly lower.
3. Meta (META) – New Products & an Investment
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