Hey this is tom, and in today's video we're talking about wish the company that's been all over the news, we're going to take a look and find out if it's overvalued or undervalued, we're going to do a whole deep dive, financials dcf. What other analysts are saying? Management business model the whole song. You know i'm gon na go crazy with this company, but if you're just here for the bottom line, i'm not gon na hold you hostage. The bottom line comes first every time in my videos, because i value your time.

I think that wish is undervalued by about 20. I think it's a 16 stock. I think it's one of the most undervalued companies right now in e-commerce, and i think you should definitely take a look at the numbers, the financials and if you don't want to do it, if you're just lazy, stick around with me for the next five to seven Minutes and i'll show you why i think it's so undervalued, but before we do don't click, nothing, don't smash, nothing don't buy. Nothing, don't subscribe to nothing.

The only thing i need is just your attention and let's get started. My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you there's one thing you need to know about me: i don't take from anybody and if you chose to stay with me, thank you so much. I really appreciate it. My name is tom.

If this is your first time here, you should know i used to be a senior financial analyst. Now i'm a full-time youtuber and today we're talking about wish the company that brought the aliexpress prices to the amazon experience and, let's see what they got now wish, is the brainchild of pyotr shoshevsky. Now the reason i can say pyotozewski is because i'm russian and he's polish, which means we're pretty much the only people who can actually say his name without saying peter now, peter or peoria, whatever you want to call him, is a 40 year old computer engineer. Out of poland, who came up with this really interesting concept, essentially, let's bring the whole aliexpress kind of prices, the thrift, the treasure hunting.

Let's combine it with the amazon shopping experience: let's make it feel western, let's make it feel comfortable and easy and enjoyable, and i think he's killing it. I think he's doing a really good job and if you take a look at the stock price, it's down 30. In the past six months, and i think with their trajectory, they're actually headed into some good places. Let me show you why? Because this is a platform that has over 100 million users over 500 000 merchants and they're growing like crazy.

In fact, their data usage are pretty insane so far, based on what we know. Users spend about nine minutes on average per day on their platform, which is way more than amazon, for example, within six minutes. So it's definitely an experience based service. Now here's the other kicker about this they're all about mobile 90 of their traffic, is from mobile and it's not search based, unlike amazon they're, going straight up for the suggested model, and you know what it's not even about the suggestion model that they have.

It's not that amazing. It's about the treasure hunting experience you're going and wished for an experience like you're browsing in the mall you're walking through the streets you're walking through the mall, and you want to find some thrifty, great deals with products. You didn't even know you want. That's the whole idea here and i think what they're eliminated here is the unpleasant, at least for me, experience on companies like aliexpress, which has great prices, but it's so convoluted and it's so not suitable for me.

I don't enjoy shopping on aliexpress, i'm sorry, it's just not my thing, but i did use wish a few times before this video. I wanted to check it out and it was actually pretty cool. I bought a few stuff. It took a while to get i'm not gon na lie, but the quality was decent.

It wasn't amazing, but it wasn't complete trash and it wasn't fake. So that's my own personal experience. Now, let's talk about some data, so here's the first piece of data for you, 55 million dollars, and it has nothing to do with the financials of which this was the price tag on the old dan balzerian home the mansion. You remember in the cnbc kevin delirio video now check this out.

Pyotr actually rents out this house and they use it strictly for pr materials for wish. He doesn't even want to live there. I mean why would you, but he actually lives in the same neighborhood in a much more modest house and when i say modest, he's not rooming with people chill it's a 15 million home, it's a very nice home, but it's nothing like that mansion, but that mansion Now has wish all over it, which i find kind of ironic, given what dan has been doing there. A lot of wishes were granted on that mansion.

Hey now, as i mentioned earlier, the whole idea of this platform is actually not to send you to search you're not coming in to wish to check prices, unlike you do with amazon you're getting there for the experience you want to have fun. Let me see some cool thrifty kind of findings right. You want to find the treasure hunts, so the whole idea is mobile users from medium to low economic, socioeconomic status, actually shopping on their phones, and the data supports that nine minutes per user per day is very high. The whole idea beyond the fact that it's completely geared towards mobile, i mean they have a desktop website, but it's all about mobile is that 70 of purchases on wish actually get carried out from the main page from the home page without people searching anything unlike amazon, It's not utilitarian you're not going there to check prices, and i think personally, that experience based services have a much more interesting growth pattern than the utilitarian-based service.

In my opinion, it has a better longevity than a utilitarian service because it creates loyalty - and i think that's why they're not really copying neither amazon or aliexpress they're, creating a whole new niche. Let's see some numbers then so, first of all, let's talk about the total addressable market by the end of next year. The e-commerce market is supposed to hit 6.3 trillion dollars. That's a lot not to mention the amount of mobile users is supposed to go up from 63 to 71 and guess what wish is a strictly mobile platform which suits this very well now, the demographic of which is really interesting.

It's nothing like amazon. The median user on wish is making about fifty thousand dollars per year per household. That's not a lot, but guess what there's over? One billion of households like this below 75 000, which creates a lot of opportunity and a lot of potential demographic for wish, which none of these other platforms can actually get now. Nothing is perfect in this world and the biggest problem with wish is the logistics.

Now they are setting up their own logistics plan and their own logistics platform like amazon, but it's far from being ready and is far from being perfect on average, you have to wait a few weeks until you get your stuff from wish. There's nothing like the overnight delivery or the next day delivery or the next three four days: delivery like in amazon, it's completely slower, but guess what for thrifty buyers? That's not really the main consideration. If you're buying cheap stuff like cheap flights, you don't expect to get things fast or be comfortable. You expect to get it cheap and i think it's not a huge deal.

However, if they want to make the next sleep, they got ta improve their logistics. This has to come faster for some of my stuff. I waited for over a month. That's a lot.

Let's take a look at the dcf that i've constructed for wish right here on row 19. You can see the ebitda numbers, the earnings after depreciation and amortization, to which the tax rate will be applied to after tax free cash flow, 10 discount rate. And here we use a four percent perpetual rate for the perpetual growth 25 x multiplier. Because it's a technological company and we have 1.7 billion in cash and cash equivalents, almost know that and what we have here right now is a target price of 16.

versus a current price of 13.40, meaning this company, according to my dcf, is 22.18 under valued. Now, let's review what other wall street analysts are saying about wish and for this we're going to use t pranks if you're not yet subscribed, you can get a subscription with a 10 discount code. In my description section, i've been using their service way before i even had an affiliate link. These guys reach out to me and said: hey tom, here's, an affiliate link you're using the product anyways in your videos - and i said why not there is a birthday sale which you can get at 20 off, but that's only for the next two or three days.

I'm not sure go check it out now check this out now, as you can see right here, this is the current price 13.4 cents, and this is the consensus target price based on the wall street analysts that are covering this stock 18 and 60 cents, which is Actually, even higher than my own personal estimate. Now, let's take a look at specific analysts. I screened out everybody who's, not a five-star analyst and, as you can see on the screen right here, we have two analysts that are saying that it's overvalued by ten and a half percent, but the rest of these guys by my account. It's eight saying it's between 41 and 123 undervalued you make the decision for yourself.

This is just to give you a gauge of what this thing is going now, let's take a look at the momentum of the stock and, as you can see right here, the past six months, the stock lost almost 30 percent of its value, which means it creates A massive opportunity to get in on a reasonably priced ecommerce stock without overpaying from 17 to 18 to 19 to 20. This company went from 1 billion in revenue to 2.8 billion in revenue just in four years, that's very, very impressive, 3x in four years. That's nothing to be shy of now. The most important part actually doesn't come from the revenue section, but rather from the balance sheet check this out.

As you can see right here, they have 1.77 billion in total cash and short term investments. Now, if you scroll down right here, you see that their total assets are 1.999. Essentially, two billion dollars in assets now check out the current liabilities. They have no goodwill and obviously almost no debt, total abilities, 1.069.

Essentially, a 2x ratio, maybe 1.8 ratio between assets and liabilities without any debt without any goodwill. That is excellent and, as you can see right here, as i guess, the total debt is 48 million with the company that's holding 1.77 billion in cash. That is nothing now. The one point of weakness for this company is the marketing expenses.

As you can see right here, those are hidden right here in the sg, a the marketing expenses, which essentially mean the client cost acquisitions, is insane. This company is paying a lot of money to get people on that platform. However, that is not unusual in the e-commerce industry. They're not spending nearly as much as amazon and their comparables.

These companies spend a lot of money to get clients just to create growth. That's the strategy in this business and eventually it pays off, because if you have returning clients, you actually get to lower your client cost acquisitions and get the same return, which is way more likely with the system. That's based on experience based versus search based when it's not utilitarian, like amazon, for example, and it's way more experience based where you're coming to have fun like the whole idea of wish. Much more likely that you're gon na have a higher percentage of returning clients.

But i'm not saying which is better than amazon. No, no! No! No amazon is freaking. Amazing, i'm just saying, with this model, with an experienced based model, they might be able to lower these marketing costs quite quickly, as you just saw, i think, which creates a really good opportunity to get in on a hot market at a reasonably priced company. Again, my opinion, which means it might be inaccurate, might be wrong, might be the ramblings of a madman.

You got ta, do your own research, no matter what you can't escape your own research. As always, a huge shout out to the channel members, a huge shout out to the patrons you guys are amazing. Thank you so much. We have some incredible stuff coming up next month, i'm gon na blow your mind, we'll see you guys in the next video.