MKTW, MarketWise Inc.

Will it survive?

• Can it pay its interest? —
  No meaningful interest burden
  Little or no interest expense reported
  What this means

  Little or no interest expense reported, the business isn't leaning on lenders to operate.

• How heavy is the debt, net of cash? +$70M
  Net cash, debt-free
  Cash $70M − debt $0
  What this means

  Cash and short-term investments exceed every dollar of debt by $70M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? 6d
  Tight
  DSO 6 + DIO 0 − DPO 0 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

• Return on invested capital —
  Not enough data
  Industry peers: median -11%
  What this means

  The filing data didn't include the inputs for this check.

• Owner-earnings margin 14%
  Solid through the cycle
  7-yr median margin, range -5%–20%; latest $46M = operating cash $46M − maintenance capex $391K
  Industry peers: median -4%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 14% of revenue this year, a 14% median across 7 years. Treating stock comp as the real expense it is (less $11M of SBC) leaves $34M.

• Are earnings backed by cash? 8.18×
  Cash-backed
  Cash from ops $46M ÷ net income $6M
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 7%
  Reinvests most of it
  Dividends + buybacks $3M ÷ Owner Earnings $46M
  What this means

  Of $46M Owner Earnings, $3M (7%) went back to shareholders, $0 dividends, $3M buybacks. But the buybacks barely exceed stock issued to employees ($11M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.18×
  Harvesting
  Capex $391K ÷ depreciation $2M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size Miss
  Revenue ≥ $2B · $328M
  What this means

  Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

• Strong liquidity Miss
  Current ratio ≥ 2× · 0.56×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Earnings stability Miss
  A profit every year (7-yr record) · 2 loss years
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · none paid
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth —
  Earnings +33% over the record · —
  What this means

  Earnings were negative early in the record, a growth rate isn't meaningful.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.94/share (latest year $2.26), the averaged base the calculator's gate runs on, and book value is $-4.69/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 5 of 7
  What this means

  Lost money in 2 year(s), look at what happened there before trusting the average.

• Operating margin −105% → 17% (3-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about −105% early to 17% lately, median 12% — pricing power intact or improving.

• Owner earnings growth −23%/yr
  What this means

  Owner earnings shrank about 23% a year over the record.

• Worst year 2021 · −176.2% op. margin
  What this means

  Operations went underwater in 2021, understand why before trusting the good years.