max(own TTM operating margin 30.18%, growth-matched peer median 13.7%) -> the rule takes the higher, so the terminal margin is Grindr's OWN current operating margin held FLAT for five years. No margin expansion credited, which is conservative for a business running 45.0% adjusted-EBITDA margins with de minimis capex.
Risk & exit
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
Risk trigger 13% below the memo price
$14.51
Forward E[R] vs a 0% floor
+42.7%
A daily close below $14.51 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Thesis-invalidation conditions
Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.
Advertising revenue growth falls below +25% YoY (from +68.1%). Advertising is carrying roughly 12 points of the 38.3% headline; it is the marginal driver and the first thing to break.
Average Paying Users grow less than +10% YoY (from +18.6%). Volume is the majority of subscription growth; if it stalls, the remaining growth is price, and price alone does not support 6.98x sales.
FY2026 revenue guidance is not raised again, or FY2027 initial guidance comes below +15%. Grindr guides in "at least" language and raised on 2026-05-07; a flat guide is a signal in this company's idiom. FY2026
Total debt rises above ~$450m, or the revolver is drawn to fund further buyback. Leverage is currently comfortable (2.7x EBIT, 6.4x interest cover); a further step-up changes the risk profile materially given book equity is $839k.
A goodwill impairment of any size. $275.7m of goodwill against $839k of equity — any impairment takes book equity negative. Tested annually in Q4. annual
A going-private proposal after the standstill expires ~2027-08-26. Terminates the thesis on someone else's terms.
Impairment case
Type: MEASURED. Logged and scored; blocks nothing. Named cause: an advertising-led revenue miss colliding with a levered, near-zero-equity balance sheet during the unsettled ASR/FRT window. The mechanism, in order: 1. Advertising is 17.9% of revenue, growing 68%, spot-priced, and has no contracted backlog. It is the line that falls first in an ad recession. 2. Grindr holds $23.8m of cash against $20.0m of debt due within twelve months, plus two equity forward contracts that must settle by Q3 2026. 3. The FRT contains a bifurcated derivative whose settlement features are *not* indexed to Grindr