Looking at this company in a little of dilemma was wondering what you guys think
Key trends:
1, Margins are decreasing due to higher contribution from lower margin but higher growth, more competitive mobile space
Sales growth are fabulous
I expect margins to go down further as the company forays into lower margin businesses that takes high operating leverage and volume to ramp up
I expect SG&A, R&D, marketing and COGS to increase
Valuation is cheap relatively speaking.
Buy/Hold/Sale?
We talking like twitter internet, or like enterprise internet, or some other tech?
Based on what you put, I would probably stay away from it without knowing any real compelling reason to own it. Shrinking margins are no fun, especially seeing as how fickle a lot of the customer base is for these things, while revs may be growing quickly now, that may not be the case going forward (and without knowing the company its really hard to say if the brand has any value with consumers or where it is in its lifecycle)
assuming this is a public equity, the most important key trend is that of the stock price
trending up = buy
trending down = sell