Consumer Discretionary
Q1 results confirmed much of Hesham Shaaban’s short thesis - CART’s KPIs and monetisation are working against each other to some degree. Promos are revenue offsets, so while promos can help drive GTV / order growth, it will come at the expense of revenues and potentially to the point where the associated take-rate from the transaction is negative. Hesham suspects CART was pandering to the Street with its 2Q24 GTV guide. He can’t see how it gets there without missing current 2Q revenue estimates, which are likely to increase even further post-print following its strong EBITDA guide.
Edition: 186
- 17 May, 2024
Consumer Discretionary
The upside surprise from CART’s 3Q23 results (order efficiencies) introduces more questions heading into 2024, which is the focal point of Hesham Shaaban’s current short. Investors should remember that the primary source of the company's YTD EBITDA leverage is its Opex cuts, which are not likely to continue into 2024 at a comparable magnitude. In the absence of said Opex cuts, the only real leverage in CART’s model comes from its take-rate, which Hesham expects to be a source of pressure as the group struggles to stabilise its KPI growth.
Edition: 174
- 24 November, 2023