We came across a bearish thesis on Corporación América Airports S.A. on Monopolistic Investor’s Substack by Antoni Nabzdyk. In this article, we will summarize the bulls’ thesis on CAAP. Corporación América Airports S.A.'s share was trading at $26.40 as of December 2nd. CAAP’s trailing and forward P/E were 23.98 and 4.89 respectively according to Yahoo Finance. Corporación América Airports (CAAP) operates 52 airports globally, with its largest footprint in Argentina, a country facing ongoing economic inst ...

Core Thesis - The article presents a bearish outlook on International Paper Company, contrasting it with a bullish perspective that highlights new leadership and potential growth opportunities [1] Company Overview - International Paper Company produces and sells renewable fiber-based packaging and pulp products across North America, Latin America, Europe, and North Africa [2] - As of November 28th, IP's share price was $39.48, with trailing and forward P/E ratios of 38.15 and 17.95 respectively [1][2] Valuation Concerns - IP is trading at a historically high valuation, with a projected 2025E EBITDA multiple of 11.2x, nearly three times its historical average and 50% higher than Smurfit WestRock, despite weaker margins and higher leverage [2] Leadership and Strategy - The bullish thesis is anchored on new CEO Andy Silvernail, who has a strong operational track record and a refocused capital allocation strategy, along with perceived pricing power in a concentrated North American containerboard industry [3] Financial Projections - Silvernail's targets for 2027 include an EBITDA of $5.5–$6.0 billion and a near tripling of free cash flow, driven by synergies from the DS Smith acquisition and above-market volume growth [4] - However, these projections face significant economic and structural challenges, including stagnant U.S. corrugated box shipments and a decline in IP's market share from 35% in 2013 to 28% in 2024 [4] Acquisition Impact - The $10 billion DS Smith acquisition adds high leverage and complexity to IP, potentially constraining further M&A opportunities, with uncertain synergies due to competitive pressures [4] Cash Flow and Dividend Concerns - IP's free cash flow has averaged $0.7 billion annually over the past three years, while the company maintains a $1 billion dividend, necessitating borrowing in 2025 [5] - The aggressive 2027 targets depend on favorable pricing and unprecedented volume growth, which are inconsistent with long-term trends [5] Market Outlook - Realistic multiples and baseline earnings suggest IP shares could trade 40–50% lower, between $25–$30, while an upside to $60 reflects inflated expectations [6] - Market focus may shift from the narrative of the "Silvernail era" to concerns over dividend sustainability and operational realities, especially if economic conditions worsen or EBITDA underperforms [6] - Potential catalysts for market shifts include likely earnings disappointments in Q3–Q4 2025, leading to revisions for 2026 and skepticism towards 2027 guidance [6]

Core Thesis - Cricut, Inc. presents a compelling short opportunity with shares potentially falling to $3.50, reflecting a 52% downside from current levels [2] - The company's stock has been inflated due to one-time items boosting Q1 results and a $0.85 special dividend, attracting temporary investor interest, while fundamentals remain weak [2][4] Market Dynamics - The core DIY and scrapbooking market is in structural decline, with intensifying competition from lower-cost machines and third-party materials [3] - Cricut's subscription revenue faces a looming "cliff" as the active user base nears saturation, with many users unlikely to convert to paid plans [3] - Access to free templates and designs further limits the potential for subscription growth [3] Financial Performance - Consensus estimates projecting growth in 2026 appear overly optimistic, with management's plans to reinvest in R&D and marketing expected to compress margins by 200-300 basis points in 2025 [4] - Q1 results were artificially inflated by one-time gains from inventory adjustments and bad debt recoveries, misleadingly boosting earnings by an estimated $8 million [4] - Valuation is stretched at 17x NTM consensus EBIT, with conservative adjustments suggesting 2026 EBIT could reach only $50 million versus $60 million consensus, implying a target price near $3.30 [5] Competitive Landscape - Connected machine sales have stagnated despite repeated efforts, and the accessories and materials business faces strong competition from online discounters, further pressuring margins [4] - While Cricut remains the leading brand in its category, structural headwinds, intensified competition, and subscriber base saturation support a significant downside for the stock [5]