EBIT
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stock NYSE ETF

I’ve been modelling Netflix - 12-13% annual revenue growth, growing EBIT margin > 28% and even a terminal growth rate of 4%. Despite this, my DCF is spitting out 26% overvalued.
The main issue is WACC. Per those free DCF valuation sites, they all seem to use a WACC of 7-8%. By contrast, my calculated WACC is 10.8%: 0.065 D/E ratio (using market value of equity), 4.7% cost of debt and 11.2% cost of equity (beta of 1.51).
***What am I missing?***

Its quite interesting they're trying to move from a business that's tied to commodity cycles and build more stable, higher margin businesses gradually
- Bull case: Oil palm is probably most interesting part, this segment's EBIT was up 14% this quarter and its oil extraction ratio is improving too that should gradually help. India is pushing for lesser oil imports and they're benefiting from it. Animal Nutrition also had a good quarter, their cattle feed volumes increased 15%. Now they own Creamline Dairy and Godrej Foods, working capital has improved and Astec is gradually moving towards higher margin CDMO work
- Bear case: Issue is that one business does well while another disappoints. This quarter Animal Nutrition and Oil Palm were strong but Crop Care revenue fell 17% because of late monsoons. Dairy revenue grew but margins fell because of higher milk procurement costs and Poultry profits fell too because of higher feed costs. Astec's margin is improving but not revenue. That's why overall EBIDTA margin also fell to 9% from last yr 10.8%. This is something which I'll check over the quarters too.

What's over? Not being facetious but they are trading at 10x fwd EV/EBIT. And they are not some stagnant company that's unable to find growth opportunities.

**ESCO Technologies (NYSE:ESE)** reported Q3 FY 2026 sales of **$339 million**, up 14% year over year, with organic growth of 8% and a $23 million contribution from Maritime. GAAP EPS from continuing operations rose 31% to **$1.26**, while adjusted EPS increased 38% to **$2.20**.
Entered orders were **$410 million** with a 1.21 book-to-bill, driving record backlog of **$1.54 billion**. Year-to-date operating cash flow from continuing operations reached **$193 million**, up $105 million. Aerospace & Defense led segment growth with 23% higher sales and a 30.0% adjusted EBIT margin; USG and Test posted mid‑single to high‑single‑digit sales increases.
ESCO agreed to acquire **Megger Group**, expected to close in Q1 FY 2027, and raised FY 2026 guidance to **$1.30–$1.33 billion** in sales and **$8.30–$8.40** in adjusted EPS. A quarterly dividend of **$0.08** per share is payable October 15, 2026.
“Year to date, we have delivered double-digit organic sales growth across our aerospace, Navy, Test, and Doble businesses. This broad-based strength underscores the long-term growth dynamics across our end markets. At the same time, our backlog has increased by over $400 million year-to-date driven by momentum across our business platforms. This combination of durable growth drivers, leading market positions, and record backlog, gives us confidence in our ability to continue delivering above-market growth and we are pleased to again raise our full-year FY 2026 guidance.”

> 50%+ gross margins and strong international growth are rare combinations.
Lululemon Gross Margin of 56.6% in FY25 (ending 01-Feb-26) was better than Nike's 42.9% in the corresponding year (FY26, ending 31-May-26).
But LULU's EBIT Margin was 19.9%, actually slower than Nike's 20.3%.
As for international growth, Americas was 71% of revenues, whereas China Mainalnd was just 16% and Rest of World (RoW) was just 13%.
So, yes, one can point to higher growth in "international", but with US sales falling (-2% in FY25, -6% in Q4) and dragging down Americas growth to negative (-1% in FY25, -4% in Q4), group sales grwoth was anaemic (+5% in FY25, +1% in Q4).
Q1 FY26 numbers are worse: -4% in the US, -3% in Americas, +4% for the group; comparable sales are worse, -5% in Americas and +1% for the group.
(All growth rates are in constant currency.)

"The 56% figure is AMD-wide non-GAAP gross margin, not a disclosed Data Center segment margin, " I did not claim otherwise, thats why its listed under the general 1. and not under 2. datacenter.
Not the gross, But the **operational** margin in the datacenter business in known and is of course lower than the gross- around 31%.
"In AMD's Q2 2026 financial report (for the quarter ended June 27, 2026), the **Data Center** segment achieved record revenue of **$6.72 billion** (up 107% year-over-year) and generated **$2.10 billion** in operating income, resulting in a segment operating margin of approximately **31%** (up from 28% in Q1 2026)"
(In Q1 26 it was 27,7% so operational margin increased as did the datasegment revenue and income as part of the whole business, now about 58% of all, ( in Q1 2025 EBIT margin datasegment 25%) . So in in this quickly expanding segment the margin is historically high.
For comparison: For NVIDIA the datacenter business is much bigger as part of the whole company (92% - so almost all revenue comes from that) and the margins company wide (which is almost all datacenter driven) are much higher than AMDs.
Nvidia maintained a company-wide non-GAAP gross margin of **75%** (and \~60.4% operating margin),

Thats what I meant with different product mix. Personally I liked the AMD business model better, since it has more legs and does not rely almost entirely on that datacenter business - at least yet. Even if it means lower margins. But the run up from 200 to 500-600 this year was too optimistic in my mind.
Of yourse you can argue, that if they grow the datacenter segment revenue by 50% a year (and keep the other segments stable) they will become much more Nvidia like in 1-2 years but with lower margins.