Callouts & quotes from 1,047+ activist slides

"At a minimum, industry leading FMCG companies should achieve normalized gross margins of over 45%. Currently, we estimate Consumer Products Gross Margins remain below pre-Covid levels and far below peers."

"If GoDaddy executes against a long-term strategy focused on margin expansion, we believe the Company can generate a growth + profitability rate in-line with the broader set of scaled technology companies."

"Based on our research we believe there is an opportunity for Tessera to deliver double-digit revenue growth, achieve best-in-class EBITDA margins of 60-70%, and create significant value for shareholders."

"Compared to the investor day guidance from less than 2 years ago, investors are now expecting UNP to grow volumes at only one-third of guided levels and grow revenue at half of guided incremental margins"

"Though analysts project declining sales growth, they foresee margin expansion at the same time. This pair of estimates makes little sense to us and should make investors skeptical of consensus estimates."

"Our review of peer company gross margin expansion during their approximate growth from $200 to $400 million of revenue showed that none achieved such expansion, and the median was a gain of just 85 bps."

"As we pointed out on a previous slide, it appears that FND's customer mix has shift away from homeowners, which has important implications for the growth of high margin installation materials and tools."

"Axon would now like investors to believe that it is at the precipice of leveraging their video and emerging AI capabilities alongside a subscription model to drive both revenue and margin for investors."

"Dollarama consistently produces operating margins materially higher than industry peers, and higher than historical industry norms. This gap has only grown more substantial through the last five years."

"In our Mid and High cases, we believe EBIT margins could be ~8.3% to 9.3%. In our Low case, if same-store sales remain flat, we believe Lowe’s can maintain current EBIT margins through cost reductions"

"We see 75-90% downside to PETQ on lower-than-expected services growth and margin contraction in the products business, as well as on multiple contraction as the market’s understanding of PETQ evolves."

"We believe it will be challenging for PowerSchool to expand in these markets in a meaningful way without diluting margins because of the structural differences in education funding in foreign markets."

"We are concerned that Hill-Rom may similarly demonstrate margin contraction and slowed FCF growth in coming quarters as management is forced to make up for seemingly-delayed spending on capex and R&D."

"Tessera has repeatedly licensed outsourced semiconductor assembly and test companies (OSATs) instead of higher value OEM and manufacturer licensees despite OSATs having far lower revenue and margins."

"We would understand if margins declined due to investments in growth, but organic growth is worse than when Solventum was inside of 3M, and the Company has not created an expectation for improvement."

"The Company has never given investors a clear picture as to what are the direct and indirect manufacturing costs related to this business, so that investors can understand trends in its gross margin."

"Kornit's valuation is rich for a commodity-type digital printing company, and analysts are overly optimistic that it can sustain 20%+ revenue growth while expanding EBITDA margins from 7.6% to 17.8%."

"the peak plasma levels of Pitolisant after 6 consecutive daily doses will be 2.3x higher than they were on Day 1 but the Day 1 plasma concentrations were used to estimate the safety margins for QTcF."

"At last year's analyst day, management guided to $3.40 of EPS in 2015, driven by a 4% average growth rate in same-store sales, a 10% EBIT margin, and an $18bn share repurchase program (2011 to 2015)"

"Spruce Point observes that Evoqua changed how it discussed gross margin post-IPO. At first, it gave a more detailed discussion about factors that drove costs, including the impact from acquisitions."

"We find that its prices are on average 15%-20% higher. Weis' prices decreased 8% relative to peers between mid-year 2017 and 2018. As a result, we expect Weis' gross margins to be pressured in 2018."

"MSCI first acquired 40% of Burgiss in Q1 2020. Spruce Point observes that MSCI avoids an explicit discussion of the true profitability of Burgiss, but rather focuses on its mid-teens EBITDA margin."

"We hypothesize that APP blends these high probability ad wins with low probability, low-cost ads to create the appearance of a high ROAS advertising platform while generating a high margin for APP."

"One stated his margin per case drops by more than 90%, from $100-120K to $10K with the device; the other stated “you are eating up a very, very substantial amount of the margin, no doubt about it.”"

"We conservatively estimate Porch booked $8.1m of revenue in 2019 with zero cost associated with it. As a result, we estimate Gross Margin % to be inflated by approximately 2.3% (230 basis points)."

"We conservatively estimate Porch booked $8.1m of revenue in 2019 with zero cost associated with it. As a result, we estimate Gross Margin % to be inflated by approximately 2.3% (230 basis points)."

"Post our reports, both Gentex and Caesarstone showed significant gross margin contraction leading us to believe that the capex anomalies were a strong indicator of future gross margin contraction."

"Sony's IP&S division has kept pace with top peer growth rates by maintaining #1 position in mirrorless cameras while being the only company in Japan to see margin expansion in its imaging business"

"When we asked him about trends in hardware margins, he responded by saying that ARPU as a whole had "dropped significantly". This is a completely different picture than management tells investors."

"The clinical literature is unequivocal, per another study: "steatotis in the donor liver has been identified as a predictor of graft failure...so these livers are often considered...marginal....""

"Since its IPO, it's evident that LSPD's business has become more competitive by analyzing hardware margins. Whereas before, it could make money on the POS systems, now they are sustaining losses."

"Our price target is based on the nature of a business unlikely to meet the market's overly optimistic expectations of captured market share, GGR revenue share and inflated target EBITDA margins."

"Once we calculate the incremental operating profit from the Mexico turnkey contract, we divide it by the incremental revenue from the contract. The result is an operating profit margin of 31.9%."

"Lone Star's Adj. EBITDA margins are set to decline in FY25 by 150bps and the fine print disclaimer around the projected margin gives us considerable hesitation in believing they can be achieved."

"Policy makers and mainstream economists are stuck in GroupThink that easy money always helps the economy, despite basic economic principles that suggest diminishing or negative marginal returns."

"There were already questions about the cost competitiveness of PHAs even before canola oil prices started to surge. We believe investors should discount added margin pressure from rising prices."

"While ODR has been positioned as a higher-margin, lower-risk growth driver, the heavy reliance on fixed-price contract work undermines that narrative and increases the risk of margin volatility."

"Spruce Point estimates that for the first time since coming public, Remitly's transaction margin, or the difference of revenue per send volume and transaction expense per send volume, declined."

"Opportunity of ~70 basis points of margin improvement based on redesigning Goodyear’s brand strategy. Achieving this improvement would equate to a 26% increase in Goodyear’s current stock price"

"According to a former high level Xylem executive we interviewed, digital sales are dilutive to margins. Yet, Xylem’s CFO suggested recently that a higher digital mix would bring higher margins."

"Within asset management, JP Morgan is delivering strong actual margins for shareholders, as opposed to adjusted, "pro-forma" illustrative margins that do not ultimately create shareholder value"

"We believe that GCP can improve its EBIT margin by ~600 bps on a run rate basis, more than recouping all of the deterioration that has occurred through poor performance over the last few years."

"Despite Herbalife's claim that its compensation structure in China is different from other markets, the pro forma Contribution Margin in China essentially mirrors those in the rest of the world"

"We see a large disconnect between the high costs and high margins and how they can co-exist with each other. This was our first clue that something might be amiss with the company’s financials."

"We believe that GCP can improve its EBIT margin by ~600bps on a run rate basis, more than recouping all of the deterioration that has occurred through poor performance over the last few years."

"Assuming 2% comps and the Company’s unit growth plan, if EBITDA margins were to improve 100bps by 2008 (returning to 5-year average levels), EBITDA could increase by 41% from “reported” levels"

"While the Company reported stellar results and a record EBITDA margin of 15.2%, the store manager says the sales were great but the store burned through cash and the bottom line wasn’t great."

"Applying peer target compensation levels of 55% in advisory(1) and more than the peer average of 40% in asset management, we believe Lazard has the potential to achieve +30% margins over time"

"Despite a stellar 2019, we believe Chipotle still has significant unrealized growth potential, with average restaurant sales still 12% below peak levels and margins ~700bps below peak levels"

"In total, we believe our plan for Office Depot will improve operating margins from 0.9% to 7.3%, while providing Office Depot with a plan to successfully transform the future of the Company."

"[W]e believe BWLD company-owned stores could improve margins substantially, by up to 500 [basis points] based on our analysis, by adopting labor practices currently deployed by [franchisees]"

"By reclassifying WSP's net financing expense as an operational cash flow as opposed to a financing cash flow, we find that the Company's operating cash flow margin lags the industry average."

"For example, with clear evidence that EBITDA has been shrinking, margins contracting, and excess manufacturing capacity increasing, why has Saputo continued to add headcount year-after-year?"

"Based on peers, we conclude that there are potentially material opportunities to improve ADT's cost structure as a standalone public company, enhancing both EBITDA margins and free cash flow"

"If AMR is over-reporting production, there is a strong possibility its revenues and coal inventories are overstated. Overstated inventories can also to overstated margins and profitability."

"Spruce Point believes that analysts overvalue AOS because they believe its margins are superior, sustainable, and that the recent growth setback is "temporary" and not of long-term concern."

"As the currency hedge benefit has reversed through the last two years, underlying gross margins have purportedly risen by *EXACTLY ENOUGH* to keep total gross margins steady between 39-40%."

"Booz Allen acknowledges the Amazon recruitment threat and has reported recent challenges. Using LinkedIn data we see that Leidos new hire growth has been marginally worse than Booz Allen's."

"Wir vermuten stark, dass es sich dabei um Notfallreaktionen auf Margin Calls handelte, die jeweils auf einen deutlichen Kursrückgang folgten und mit einer sofortigen Zusage verbunden waren."

"GoDaddy is a scale-leading infrastructure business trading at 11x FCF; replaying Starboard's Splunk/Wix/Salesforce margin-expansion playbook can close a 37% peer gap and re-rate the stock."