I like this bussines a lot. It's the type of company I'd like to see in my portfolio. However I came to OE yield closer to 5,8%. It's not that bad ATM, but I am afraid it will end up lower in the future. Why?
" Expect one-time stand-up / transition cost of ~$75-100M over 12-18 months."
"Expected incremental ~$20-25M in run-rate costs to operate as a standalone company compared to historic SPGI allocations:
• Concentrated in standalone public company functions, IT infrastructure, facilities / international
costs"
"Equity compensation to be aligned with public company peers to attract and retain talent" - this especially means that SBC will be higher. I wonder if management will use this as a chance to significantly boost their renumeration. "Aligned with public company peers". What does it even mean? CCC IS for example has 7x SBC more than Mobility with lower revenue. On a SBC/revenue basis it's like a 1% to 10%. It kinda worries me. I want to see full year as a standalone company, ideal 18 months to determine whether it's worth pulling a trigger.
That's a fair concern. I agree that the $20–25M of incremental standalone costs should be incorporated into normalized owner earnings, while the $75–100M of transition costs are largely one-time so I didn't include those in my calculations. SBC is probably the bigger unknown—time will tell on that. I think we'll have a much better picture after several quarters as a standalone company.
Very interesting company for sure. I have to wonder, did you take into account the $100mm increase in interest expense? That's going to lower FCF meaningfully as well as other increased costs for the standalone business. I got OE closer to ~320mm
You make some good points. I think the biggest difference in our estimates comes down to how we’re treating the deferred tax liability. Considering that much of the deferred tax reversal is tied to historical acquisition accounting (primarily IHS Markit and other acquired intangibles) rather than the ongoing operating economics of the business, I’m hesitant to treat the full deferred tax outflow as a permanent reduction to normalized owner earnings. That said, I agree it’s an important judgment call, and I’m looking forward to a few quarters of standalone results to better understand the recurring cash tax profile and normalized earning power. If anything, I think you’re being more conservative in your estimate. Nothing wrong with that!
Thanks for the comment. Based on the pro forma income statement in Form 10, net income after the approximately $113 million of annual interest expense is about $139 million. Adding back depreciation and amortization of roughly $310 million gets you to around $450 million before considering working capital and capex. After roughly $24 million of capex, I’m estimating normalized owner earnings/free cash flow in the neighborhood of $425 million on a 2025 pro forma basis. Assuming the business grows 8–10% in 2026, that gets me to approximately $460–470 million of normalized owner earnings. Obviously that’s just my estimate, and I’m looking forward to the first few earnings calls to better understand the standalone cost structure and cash flow profile.
Hey thanks for responding. On page 170 or F-5 they break out the 3 months ended March 31 2026. They generated 54mm but was a bit down due to working capital. I think we're getting different numbers due to the deferred income taxes which was 23mm for the 3 month and 90mm for 2025. I also took out SBC and the restructuring charges since they have been in for the last 3 years. I don't know if this is due to the acquisitions they have made, but it is significant and brings me OE down. Interested in your perspective here
Bear in mind that Carfax only reports on pubicly-available information; for example, if a car was wrecked, somewhat repaired but not reported, it won't show up on the Carfax report. Customers buying a used auto from remote could easily be disappointed when the car arrives and they begin to understand the car's true condition. In short, review the Carfax, but get an independent auto mechanic's inspection as well.
Good question. I don’t know that much about MarkLines but it appears to be a legitimate niche competitor, particularly in automotive market intelligence, production forecasting, supplier data, and OEM analytics, so there is definitely some overlap especially with Polk. That said, the automotive data market is quite large, and the two companies appear to have different strengths. So while I think MarkLines is a credible competitor in certain areas of the B2B business, I don’t view it as a major threat to Mobility’s overall automotive data platform.
I like this bussines a lot. It's the type of company I'd like to see in my portfolio. However I came to OE yield closer to 5,8%. It's not that bad ATM, but I am afraid it will end up lower in the future. Why?
" Expect one-time stand-up / transition cost of ~$75-100M over 12-18 months."
"Expected incremental ~$20-25M in run-rate costs to operate as a standalone company compared to historic SPGI allocations:
• Concentrated in standalone public company functions, IT infrastructure, facilities / international
costs"
"Equity compensation to be aligned with public company peers to attract and retain talent" - this especially means that SBC will be higher. I wonder if management will use this as a chance to significantly boost their renumeration. "Aligned with public company peers". What does it even mean? CCC IS for example has 7x SBC more than Mobility with lower revenue. On a SBC/revenue basis it's like a 1% to 10%. It kinda worries me. I want to see full year as a standalone company, ideal 18 months to determine whether it's worth pulling a trigger.
That's a fair concern. I agree that the $20–25M of incremental standalone costs should be incorporated into normalized owner earnings, while the $75–100M of transition costs are largely one-time so I didn't include those in my calculations. SBC is probably the bigger unknown—time will tell on that. I think we'll have a much better picture after several quarters as a standalone company.
https://heraldofthehudson.substack.com/p/you-can-be-a-stock-market-genius
Very interesting company for sure. I have to wonder, did you take into account the $100mm increase in interest expense? That's going to lower FCF meaningfully as well as other increased costs for the standalone business. I got OE closer to ~320mm
You make some good points. I think the biggest difference in our estimates comes down to how we’re treating the deferred tax liability. Considering that much of the deferred tax reversal is tied to historical acquisition accounting (primarily IHS Markit and other acquired intangibles) rather than the ongoing operating economics of the business, I’m hesitant to treat the full deferred tax outflow as a permanent reduction to normalized owner earnings. That said, I agree it’s an important judgment call, and I’m looking forward to a few quarters of standalone results to better understand the recurring cash tax profile and normalized earning power. If anything, I think you’re being more conservative in your estimate. Nothing wrong with that!
Thanks for the comment. Based on the pro forma income statement in Form 10, net income after the approximately $113 million of annual interest expense is about $139 million. Adding back depreciation and amortization of roughly $310 million gets you to around $450 million before considering working capital and capex. After roughly $24 million of capex, I’m estimating normalized owner earnings/free cash flow in the neighborhood of $425 million on a 2025 pro forma basis. Assuming the business grows 8–10% in 2026, that gets me to approximately $460–470 million of normalized owner earnings. Obviously that’s just my estimate, and I’m looking forward to the first few earnings calls to better understand the standalone cost structure and cash flow profile.
Hey thanks for responding. On page 170 or F-5 they break out the 3 months ended March 31 2026. They generated 54mm but was a bit down due to working capital. I think we're getting different numbers due to the deferred income taxes which was 23mm for the 3 month and 90mm for 2025. I also took out SBC and the restructuring charges since they have been in for the last 3 years. I don't know if this is due to the acquisitions they have made, but it is significant and brings me OE down. Interested in your perspective here
Bear in mind that Carfax only reports on pubicly-available information; for example, if a car was wrecked, somewhat repaired but not reported, it won't show up on the Carfax report. Customers buying a used auto from remote could easily be disappointed when the car arrives and they begin to understand the car's true condition. In short, review the Carfax, but get an independent auto mechanic's inspection as well.
Good question. I don’t know that much about MarkLines but it appears to be a legitimate niche competitor, particularly in automotive market intelligence, production forecasting, supplier data, and OEM analytics, so there is definitely some overlap especially with Polk. That said, the automotive data market is quite large, and the two companies appear to have different strengths. So while I think MarkLines is a credible competitor in certain areas of the B2B business, I don’t view it as a major threat to Mobility’s overall automotive data platform.