YB new stock pitches (Tue, Jul 28)

ServiceNow ($NOW), the best total package in application software, trades at roughly 6.6x forward subscription revenue (fiscal-2026 basis, ~5.9x on NTM total revenue) near the bottom of its six-month range, offering undemanding required-return math: a 10% three-year annual return needs only ~5.3x exit multiple and a 15% return needs ~6.1x, both at or below today's multiple, meaning the stock clears a 15% hurdle without re-rating purely on the operating path already described by bookings, as cRPO has grown 21-23% cc for ten straight quarters with revenue converging up to it. The base case (subscription revenue toward $26B by fiscal 2029, multiple held near the low end) yields a mid-to-high-teens IRR, while the bull case (margin inflection confirmed, multiple back toward 7.5x+) is a double over three years. The specific, dated risk is that the 2027 margin-scaling promise isn't tested until the January 2027 guide, and three acquisitions in nine months flipped the balance sheet from $6.4B net cash to slight net debt; if that guide holds margins flat, the market re-reads the story as an expensive roll-up, implying a bear case of $75-85 (about -20%) against roughly $100 today. An earlier warning sign would be the Q3 cRPO beat margin narrowing back toward 100 bps from 200 bps.

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Marston's PLC (MARS.L), a UK pub company trading at ~50p, is down 15% following a trading update showing a 1.6% like-for-like revenue decline year-on-year, which Oak Bloke argues is already priced in and misunderstood, since the market's focus on top-line weakness ignores that sales growth hasn't been management's priority—the focus has been building out and making profitable new propositions like Grandstand (60 sites converted with 30% higher, non-LFL revenue) and Two Door. Oak Bloke contends the -1.6% LFL drag (-£7.5m on 2H25's £470.5m revenue) is offset by non-LFL impact (£5.9m) and fewer disruptions/conversions (£2.5m), delivering ~£471.4m 2H26 revenue (£0.9m higher than 2H25). The bull thesis centers on margin expansion: the Group expects to hit its October 2024 Capital Markets Day target of >200bps EBITDA margin growth over FY24 (21.4%) in the current year, well ahead of schedule, implying a ~23.4% full-year EBIT margin on ~£894m revenue for £209.2m FY EBITDA, which after D&A (-£45.2m) and net finance (-£85.5m) yields the £78.5m PBT consensus (+8.9% YoY vs. FY25's £72.1m). With 1H26 underlying PBT of £20.5m (+7.9% vs. 1H25's £19.0m), the required 2H26 PBT is ~£58m (+9.2% vs. 2H25's £53.1m), implying ~£120m cash from operations and ~£99.5m 2H EBIT (a 21.1% 2H operating margin), given net finance costs of ~£41.5m per half. Oak Bloke credits a strong management team—CEO Platt (who delivered 200bps improvement in two years and doubled profits at Merlin to £2.1bn), CMO Dixon (Whitbread, Yum Brands), CTO Beattie (Papa Johns, Domino's), and COO Campbell (SSP, Whitbread)—as the driver of continued success and future sales growth once focus shifts. Oak Bloke pegs the bull case probability at ~56.7% (the dominant scenario) and sets a fair value of ~104p versus the ~50p share price, representing 108% upside with downside protected by real estate backing and securitised debt maturing in 2058; notably, Chief Rebel exited MARS from his 'Bagnificent Seven,' a view Oak Bloke disagrees with, believing the stock can double.

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Braze ($BRZE) is a SaaS company trading at just 2.2x forward revenue, below several decelerating peers and cheaper than it was in spring despite improving fundamentals. The stock has already completed three of the four steps in the standard re-rating sequence (bookings turn, revenue follows, expansion confirms, multiple re-rates last), with four straight quarters of organic revenue acceleration (+27%), cRPO rising at 28%, and DBNR up 100 bps in both customer cohorts, yet the multiple hasn't re-rated. The discount stems from three temporary or cosmetic causes: its small size, an open CFO seat (a free catalyst with an eventual date attached), and the OfferFit acquisition muddying reported numbers enough to obscure the clean organic print. The company guided +22% against bookings running at +28% and has beaten its own guide by 2.3-5% eight straight times, setting up a catalyst into late August. Risks include customer concentration (a single large-customer loss matters at this size), the still-tiny Decisioning Studio product carrying the AI story, and indiscriminate small-cap software selloffs in risk-off tape—so size accordingly, though the ratio of stack quality to price is the best in the group.

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