Cobalt Consumer Index (6.7.22)

The following contains our view on the market and the interesting dynamics that inform our investing in consumer technology businesses

It’s been a while… and since our last report we’ve experienced one of the most difficult macroeconomic downturns of our generation. Multiples continue to be compressed, but we’ve noticed a focus towards improving FCF margin.

Top 10 Companies by EV / NTM Revenue Multiple

Only one company (Auto Trader) is trading above 10x on forward multiple. We’ve noticed a shift towards a focus on FCF margin as mean has increased by ~20%

Summary of All Multiples

We value consumer businesses on a multiple of Last Twelve Months (LTM) and Next Twelve Months (NTM) revenue. Multiples shown are calculated by taking the Enterprise Value / NTM revenue. In addition, we separated multiples by time period and by growth rate. High growth businesses are growing 40% NTM revenue; Mid-growth businesses are growing 20% NTM revenue, and Low-growth are less than 20% growth rate.

Breakdown of Historic Multiples

Multiples by Category

We have separated the multiples and outputs by subsector. On the upper end, consumer social commands the highest EV/NTM multiples, while e-commerce commands the lowest multiples.

Multiples by Growth Category

Subsector Output

Please send any feedback or suggestions to insights@cobalt.la.

Written by Ben Futoriansky.

Certain information contained in here has been obtained from third-party sources and Cobalt has not independently verified such information and we make no representations about the accuracy of the information contained in this blog, links to third party sources or the materials provided by such sources. The content in this blog is for informational purposes only and should not be relied upon as investment advice or recommendations of any kind. In addition, nothing contained in this blog should be relied upon for purposes of investing in any funds managed by Cobalt Capital, nor is anything contained herein an offering to invest in any Cobalt Capital fund — any such offering will be set forth in a legal agreement provided directly by Cobalt Capital.

The content in this blog speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.