YB new stock pitches (Wed, Aug 19)

HubSpot (HUBS), an integrated SaaS platform spanning Marketing, Sales, Service, Content, Subscription Billing, and Analytics (plus its Breeze AI agent layer), trades near $210/share (~$10.5B market cap)—the exact same level as June 2020—despite revenue quadrupling from $883M to over $3.1B, free cash flow expanding ~10x from $79M to over $750M, and operations turning GAAP profitable ($41.7M net profit in 2Q26, $1.47 EPS in 1H26 versus a -$1.90 FY20 loss). The stock trades at ~15x forward PE (falling to ~10x by 2028), ~3.5x sales, with 84% gross margins, ~20% growth/operating margins, 106-107% guided NRR (11% churn, mostly low-end), and 40% of customers on 4+ hubs providing structural lock-in; management authorized $0.75B in 2026 buybacks with share count (~50.6M, up only slightly from 46.1M in 2020) forecast to shrink to 50M despite ~$0.5B annual SBC. The bull case rests on this cheap 'legacy-industrial' valuation, sticky multi-hub lock-in (>$5k MRR grew 33% YoY, Porter's Five Forces defending the moat), rapid margin/FCF expansion, Breeze AI upsell traction (8,000+ Customer Agent activations with outcome/credit-based pricing), the new AEO Sensor dashboard tracking AI-answer visibility, and a partner ecosystem opportunity projected to more than double to ~$42B by 2030 (~22% CAGR). The bear case centers on a ~75% collapse in blog organic traffic (from 2024 peaks amid Google core updates) threatening the inbound/SEO funnel, AI Overviews (~48% of queries) and zero-click behavior eroding top-of-funnel acquisition (AEO erosion), slowing net customer additions (~7,000/quarter versus historical 10,000+), pricing-cliff and rigid-contract complaints, and AI commoditization risk, though the author argues implementation switching costs make displacement unlikely given growing customer counts. Non-GAAP FY26 EPS is forecast at $13.23 (sub-16x PE), and over a three-year horizon the author sets a $495 bull case, $390 weighted base case, and a stress-tested $195 bear-case floor.

Read the full article here. Read time: 6 min

On Holding AG ($ONON) represents a concentrated bullish bet in athletic footwear and apparel, offering one of the clearest paths to upward revisions in revenue, earnings, and multiple over the next 12 months. Recent checks with performance running stores show retailers are extremely enthusiastic about ON's 2026/2027 product lineup, with multiple accounts indicating allocations were below what they wanted, signaling genuine consumer pull rather than wholesale-manufactured growth. This contrasts sharply with $NKE, whose weak demand and sub-par lineup cede shelf space and create wholesale pull-in potential for ON at key accounts like $DKS and $FL. The margin story may exceed the revenue story: ON has navigated supply-chain inflation, logistics costs, tariffs, and a heavy DTC/stores/marketing investment cycle without sacrificing EBIT-margin progression, driven by structurally higher gross margins (65% viewed as a new floor), giving it luxury-like economics. This contrasts with $DECK, where modest gross-margin expansion hasn't offset SG&A growth, creating negative operating leverage, whereas ON's gross-margin expansion funds growth while expanding EBITDA margins. New footwear models carry materially better margins than legacy products, with expansion into apparel, lifestyle, and racquet sports as an attractive premium adjacency. ON has intentionally rationalized wholesale inventory, which suppresses near-term growth but improves channel health and sets up dramatically easier H2 2027 comps and potential wholesale reacceleration alongside strong DTC. The upcoming Investor Day should establish a base case of 20%+ annual revenue growth for three years, with 2027 potentially exceeding that, positioning ONON for revenue, margin, and EPS revisions higher plus an eventual multiple re-rate.

Read the full article here. Read time: 2 min

CNH Industrial ($CNH), the #2 global agriculture equipment OEM in a 3-player oligopoly (brands Case IH and New Holland, behind Deere and ahead of AGCO), trades at ~$10, or ~5x EV/EBIT on mid-cycle earnings—its cheapest in 22 years—and at a ~70% EV/Sales discount to Deere, the widest ever. The thesis rests on turnaround CEO Gerrit Marx (ex-Iveco, where he hit margin targets three years early before it was sold in two pieces to Tata and Leonardo; Daimler Trucks China and Bain Capital background), who is ~85% comp'd in equity ($20.9M initial RSU, ~$9M annual LTI, 5-year hold) and running his Iveco playbook of self-help margin expansion via strategic sourcing (~80,000 parts), quality-cost capture, footprint/plant rationalization, dealer consolidation ('Red AND Blue vs. Green'), and new products (e.g., a 350–450 HP European tractor). His 2025 Investor Day plan targets +350–450 bps of mid-cycle ag margin (12.5%→16–17%) by 2030—none requiring a volume recovery—which would shrink the gap to Deere's guided 20% mid-cycle from ~750bps toward ~300bps; consensus models only ~11.5%, so delivery forces estimate upgrades. CNH is the most geographically balanced OEM (~35% North America, ~37% EMEA, ~16% South America, ~12% APAC), with mid-cycle ROIC ~20–25%, 100% FCF returned via buybacks/dividends, and revenue that tracks corn/soybean prices with a 3–12 month lag. The second leg is a bet the ag cycle has bottomed (global ag retail ~20% below mid-cycle, CNH under-producing that by ~4%); management contends higher oil/Iran—which drove the stock down ~30%—is a tailwind, not a headwind, since crops are energy feedstocks via ethanol/biodiesel and higher oil lifts farmer income (YoY WTI correlates ~0.8 with soybean and ~0.6 with corn profit/acre since 2006), boosting equipment demand into 2027. Catalysts include Iran geopolitical resolution (immediate re-rate), a construction business strategic transaction by end of 1H27 completing the pure-play ag story, quarterly margin delivery forcing upgrades, and potential US farmer stimulus in a midterm year. Base case ~$24 (~2.3x, ~40% IRR) by YE2028, bull case ~4x over 4 years, bear case roughly flat including dividend (trough volumes could still yield +30%, rounded to flat conservatively). Key risks: Marx's departure (the #1 binary risk as this is substantially a management bet), lower corn/soybean prices (e.g., Chinese demand collapse or trade disruption), a weak fall early order period from a near-term farmer liquidity squeeze, slower-than-modeled margin expansion compressing IRR, and tariff/trade-regime uncertainty over the next 5 years.

Read the full article here. Read time: 8 min