Summary of Positivo's Conference Call Company Overview - **Company**: Positivo Tecnologia - **Industry**: Diversified Technology Services - **Market Cap**: R$0.66 billion (approximately US$0.13 billion) [5] Key Points Discussed Industry Challenges - **Memory Cost Pressure**: The company is facing sector-wide memory cost inflation, particularly in RAM and SSD components, which typically account for about 25% of a PC's cost [11]. - **Price Pass-Through**: Positivo is targeting a price pass-through of approximately 20% to mitigate the impact of rising memory costs, absorbing part of the increase to maintain volume in more elastic segments [11]. Company Resilience - **Diversification**: Positivo's revenue mix has become more diversified, with services, servers, and payment solutions acting as a buffer against memory cost pressures. PCs now represent around 50% of revenues, down from historical levels [14]. - **Structural Hedge**: The company generates roughly BRL 600 million annually from recurring services, which helps reduce exposure to hardware shocks [14]. Financial Performance - **Revenue Projections**: Expected revenues for 2025 are R$3.787 billion, with a gradual increase projected through 2029 [23]. - **Earnings Estimates**: Net earnings are projected to rise from R$186 million in 2025 to R$272 million by 2029 [23]. - **Margins**: Management anticipates margins to remain slightly below historical averages but within a controlled range due to mixed effects from memory pressures [15]. Strategic Focus - **Execution Year**: Management has framed 2026 as a year of execution, focusing on scaling cross-sell initiatives and strengthening commercial governance [3]. - **Shift to Services**: The company is transitioning from a hardware-centric model to an integrated infrastructure provider, emphasizing services and managed solutions [17]. Growth Drivers - **Server and AI Pipeline**: The current server pipeline is estimated at approximately BRL 1 billion, with projects involving major clients like Petrobras and banks [18]. - **Payment Solutions**: The Android POS business is expected to grow at double-digit rates, contributing to diversification and cash generation [19]. Financial Health - **Leverage**: The company maintains a net debt to EBITDA ratio close to 2x, with elevated interest rates impacting earnings [20]. However, the expansion of services is expected to support gradual deleveraging [21]. Valuation - **Price Target**: The 12-month price target is set at R$7.00, based on a 4.4x P/E multiple applied to 2026 earnings [22]. - **Forecast Returns**: Anticipated stock return is 55.4%, factoring in both price appreciation and dividend yield [25]. Risks - **Operational Risks**: Key risks include inventory management, competition, and changes in the regulatory environment affecting public entity sales [27]. Conclusion Positivo is navigating a challenging environment marked by memory cost inflation but is leveraging its diversified revenue streams and strategic repositioning to maintain resilience and drive growth. The focus on services and infrastructure solutions positions the company well for future opportunities, despite the ongoing pressures in the hardware segment.

Core Viewpoint - President Trump's "Liberation Day" tariff program has raised concerns about a potential recession, leading to significant market declines and increased demand for safer investments like U.S. Treasury bills [1] Market Impact - The stock market experienced a loss of approximately $3.1 trillion on Thursday, marking its worst day since 2020, with the S&P 500 dropping 4.8%. On Friday, the S&P 500 fell an additional 5.9%, resulting in a total two-day loss of 10.5% [2] Amazon's Vulnerability - Amazon's stock has dropped 12.8% since the announcement of tariffs, erasing all gains from the past year. The company is particularly vulnerable due to its reliance on imported goods, especially in categories like computers, cellphones, and electronics [3][4] - In 2024, Amazon's sales are projected to reach $638 billion, making it the second-largest U.S. company by total sales [4] Sales and Revenue Structure - As of Q4 2024, product-based sales accounted for about 68% of Amazon's total revenue, indicating a significant reliance on product sales over services. Higher tariffs on non-U.S. manufactured products could negatively impact sales if prices rise and consumer spending decreases [5] Competitive Positioning - Amazon has maintained a competitive edge by offering lower prices, averaging about 14% lower than similar retailers during the holiday season. The company has also launched Amazon Haul to facilitate shopping for lower-priced items [6] - Unlike Amazon, Walmart may be better positioned to weather a recession due to its focus on essential grocery items [6] Long-term Strategy - Amazon's strategy involves prioritizing customer retention and market share over immediate profits, allowing it to absorb short-term losses better than smaller retailers [7] International Operations - Amazon operates in approximately 130 international locations, making it susceptible to the impacts of a potential global trade war. However, its established market position may provide some resilience against these challenges [8] Stock Valuation - The recent market decline has resulted in Amazon's stock trading at its lowest P/E ratio in over a decade, presenting a potential buying opportunity for long-term investors [11] - Historical performance shows that Amazon has previously recovered from significant stock declines, suggesting that current volatility may be viewed as an opportunity to invest [10][12]