We have launched coverage on Open Text (OTEX-Toronto) with this brief 18-slide Executive Summary powerpoint publication. We have looked at Open Text’s history of acquisitions, its acquisition pipeline and their new business model of self-funding acquisitions to grow in perpetuity. We expect to release a longer, more detailed version of this report in the coming weeks prior to making our report public. Open Text will now join our Focused Portfolio as a BUY. Perspectec has a history of moving billion+ dollar market capitalized companies share price once our research becomes public. Our most recent examples include the publications of Aurora […]
Initiation
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We have updated our coverage list in order to better match our research to interest from investors. We now track the following equities in the technology space: 1-800-Flowers.com FLWS 2U TWOU 3D Systems DDD 8×8 EGHT ACI Worldwide ACIW Activision Blizzard ATVI AcuityAds ACUIF Adobe ADBE Alarm.com ALRM Alphabet GOOGL Altair Engineering ALTR Alteryx AYX Amazon.com AMZN Anaplan PLAN Ansys ANSS AppFolio APPF Apple AAPL Atlassian TEAM Appian APPN AutoDesk ADSK Automatic Data Processing ADP Avalara AVLR Bandwidth BAND Benefitfocus BNFT Black Knight BKI Blackbaud BLKB Blackberry BB Blackline Safety BLKLF Bottomline EPAY Box BOX Cadence Design Systems CDNS Carbon […]
With the recent launch of Spotify, we have examined SPOT’s peer group including Netflix, Sirius XM and Pandora. We found a strong relationship between the Customer LifeTime Value added (CLTV added TTM) and Customer LifeTime Value (CLTV TTM) and the dilutive market capitalization of these companies. Target Price Calculation Based on the accumulated and relative data of its online media competitors, we believe Pandora is a BUY. In the potential (probable) absence of no future operating profit, we believe Pandora can be valued using a similar valuation model as Spotify. Using Netflix, SiriusXM, Spotify and Pandora, there is a strong […]
Shopify’s (SHOP-NYSE) share price continues to fluctuate as questions about future gross margins, churn, and valuation continue. We take a unique approach to Shopify’s subscription valuation in order to account for its Merchant business that accounted for 36% of gross margin dollars (TTM). What Moves SHOP’s Share Price and how has it Traded? Source: Perspectec Shopify’s gross margin profile, subscription churn (based on our survey) and operating expense put Shopify as a very expensive stock relative to its peer group. Getting a Clean Shopify SaaS Valuation We believe Shopify’s valuation should be based on its relative SaaS valuation. We do not see a path to a […]
Good visibility on Recurring Revenue Growth Tracking Streams – We have analyzed billions of streams across Spotify’s major markets. Streamed tracks on Spotify were increasing at compound monthly growth rates between 1.5% in the U.S.to over 13% in Japan (a U.K. market monthly compound growth rate at 0.2% was due coming off a high base from Ed Sheeran streaming). Streams are what drive growth in Spotify’s two pipelines to premium subscriber growth (i.e. recurring monthly subscriber fees). Free and discounted trial users – Users typically convert from discounted and free trials to paid within a 36-month. Free and discounted trials […]
We adjust all of our figures to show results and estimates in constant currency (6.35 USD/RMB). This report was published by a junior research associate Bruce Zhang and overseen by Robin Manson-Hing. It is a preliminary view of Alibaba. Over the last three years, Alibaba (BABA-NYSE) is generally highly correlated with the NASDAQ composite and other technology stocks, while trading at a beta of 2.5x. SImilar to the market, Alibaba’s share price has also pulled back. We take a closer look at Alibaba’s business and what the stock price might do in the near future. In constant currency, sales growth was materially […]
Stalking Splunk’s sales force – As Splunk’s full-year revenue guidance has historically been materially different from results, we decided to track approximately 800 of Splunk’s quota carrying sales force, including estimated quotas from current and potential future sales managers as per job postings. Sales force quotas are key to forecasting accurate free cash flow – Estimating revenue per quota carrying sales person is key to determining future billings, operating leverage and free cash flow growth. The stock price primarily follows a trailing 12-month free cash flow yield. Using this metric makes sense to us as it does not punish Splunk or other Big Data […]
With Salesforce (CRM-NYSE) finally releasing company-wide dollar attrition last quarter, we can now launch coverage of CRM being more confident in our relative and historical valuation as well as our target price. This is the first in an ongoing series of research examining Salesforce’s business and share price. Salesforce has a number of diverging elements including: – Trading patterns – Relative valuation, growth – Profitability – Competitive position Over the last few years, there has been one steady method of valuation that has been a strong predictor of its share price: an enterprise value based on its trailing 12-month customer lifetime value added over […]
This is the first in an ongoing series of research pieces examining Paycom (PAYC-NYSE) business and share price. We believe both an absolute and peer enterprise SaaS valuation in relation to Paycom’s growth is the best way to determine whether the stock is a buy or sell. Paycom is an enterprise SaaS company primarily offering payroll software services. It is seeing revenue growth similar to a newer SaaS company, but has revenue churn and profitability closer to more established companies. We also believe tracking the timing of the ramp up of its sales offices and sales teams is important to identifying when […]
The following is our initial stock call the overall business and share price of Elbit Systems (ESLT-NASDAQ). The purpose of this report, and the underlying research provided, is to better understand the future direction of ESLT relative to its peers and the NASDAQ composite. The main criteria that will determine the future share price, earnings per share and dividend per share is anticipating the next few quarters’ dollar revenue recognized, based off the order backlog numbers. Any unexpected changes in revenue recognized in a given quarter will impact the overall buy/sell valuation. This information is provided with the understanding that […]
Introduction: The is the first in an ongoing series of research pieces examining Baidu’s (BIDU-NASDAQ) business and share price. The goal of our research is to understand the future direction of BIDU’s share price relative to its peers and the NASDAQ composite. The main criteria that will determine the future share price of BIDU we believe is: 1) Anticipating the EPS over the next few quarters and 2) Recognizing a change in value on a sum-of-the-parts basis Sum-of-the parts valuation works best – The primary driver to Baidu’s EPS and stock price is its search service operating margin. This division has […]
This is the first in an ongoing series of research examining Aphria’s (TSX: APH) business and share price. The purpose of undergoing this research is to help us determine the future direction of APH relative to Canopy Growth (TSX: WEED). The highest risk/reward forecast we can make that we believe will impact the future stock price is anticipating Aphria’s next few quarter’s kilograms sold, profit per gram and EBITDA. Unexpected changes in kilograms sold can lead to changes in the trajectory of revenue and EBITDA and a re-valuation of the stock price by buy-side and sell-side. We believe Aphria’s share […]
This is the first in an ongoing series of research pieces examining Netflix’s (NFLX-NASDAQ) business and share price. Unlike their programming, there will be no end date to our research unless the company is acquired. We view Netflix revenue and content costs similar to the way the company does, taking into account U.S. and International churn, customer lifetime value and customer acquisition costs. In order to help answer some key questions, we surveyed over 600 hundred people in the U.S. and Mexico, with a goal of helping to answer questions we had surrounding market penetration, pricing, content, competition and subscriber […]