EZZ : interesting again to watch this stock EZZ has decreased by 56 % since reaching its peak in Oct 24 and by 25 % during the last month. The valuation looks again interesting as EZZ has a free cash flow yield of 6 %+ (based on FY 24 free cash flow), while it is growing its top line by around 100 %.
Main reason for its recent consolidation : EZZ had a weak Q1 cash flow from operation, but nothing concerning as it reflects its normal seasonality, while the company has also increased its marketing expenses during Q1 25. For me, the main element to watch remains the growth of their business which has not shown any sign of weakness based on their last communications.
Probably worth looking again at the main assumptions for FY 25 of a broker report (in Sept 24) : . + 35 % for revenues, . EBITDA margin decrease from 15.2 % to 13.1 %, apparently only due to ad and promotion growth. Overall, this broker was expecting a cash flow from operation of 8 m$ (based on the above expectation), which would correspond to a free cash flow of around 7 m$+ and a free cash flow yield of 8.6 %.
