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Unit Economics - the profitability of a single unit of output, often focused on the variable
costs of production. This textbook definition evokes memories of economics 101 courses,
endless case studies demonstrating step cost functions and economies of scale. To us, Unit
Economics is more than an economics concept or business name: it defines who we are.
Let's start with profitability. We formed Unit Economics with the conviction that better ideas
make our clients more profitable. In the long-run, we believe share prices are driven by
the future profitability of the underlying businesses. While most of Wall Street focuses
solely on predicting top-line growth, we think the best insights into future earnings are
gleaned from detailed modeling of fixed and variable costs: the Unit Economics of the firm.
Understanding the cost structure, input cost inflation/deflation and their leads and lags,
incremental margins, and capacity utilization is the key to assessing the future earnings of a
company.
Variability is an essential element of Unit Economics. We, like most of our clients, are
compensated based on how well our ideas perform. Unlike most independent research
firms, subscriptions can be cancelled at any time by our clients if they do not feel that we are
adding value to their investment process. The rewards - and frustrations - of this 'eat what
you kill' model ensure that our interests and the interests of our clients are aligned.
Independent research for institutional investors, especially when targeted toward hedge
funds, is a competitive business. Take a look at our coverage, products,and sample reports.
We think you will agree Unit Economics is an exceptional firm - one that can become
an indispensable part of your equity research process.
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Unit Economics
11 Beacon St. Suite 1400b
Boston, MA 02108
Phone: (617) 227-5872
Fax: (617) 227-5870
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