Category: Uncategorized (Page 8 of 10)

PagerDuty (PD) Stock Analysis

February 6, 2020 / poffringa

In this post, I examine PagerDuty (PD). Based on my characteristics of successful software stack investments, PagerDuty meets some but not all of my criteria for recommendation. While their core product offering of on-call management has been a staple for DevOps teams since the company’s founding, a clear path to a much larger product expansion that provides necessary value to digital enterprises is harder to discern. Competitive positioning will also be a challenge, as established IT service providers are now encroaching on PagerDuty’s territory through acquisitions. In this post, I will examine the company’s financials, product offering, addressable market, competitive positioning and leadership team. This will set a foundation and investment framework which investors can use to monitor PagerDuty’s progress going forward.

Insights from Microsoft Earnings Call

January 30, 2020 / poffringa

Microsoft reported FY20 Q2 earnings after the market close on January 29th. I won’t dig into Microsoft’s performance overall, as it is covered thoroughly by other analysts. However, within the earnings release and subsequent analyst call, there were some implications for smaller, niche software companies that may be useful for investors to consider.

Zendesk (ZEN) Stock Analysis

January 29, 2020 / poffringa

Date of Recommendation:       Jan 28, 2020 
Closing Stock Price:          $85.87

Zendesk (ZEN) stock should be considered for long term investment. I expect the price of Zendesk’s stock to grow significantly over the next 5 years. This is based on my characteristics for a successful software stack company. Growth will be driven by their solid position in a large addressable market, with multiple expansion opportunities. Their product development cadence has accelerated, with several exciting new launches in the last two years. Zendesk is viewed as a leader in customer service and already supports many large-scale internet-first operations. They have a reliably growing revenue base and have demonstrated basic profitability. The leadership team is strong, led by a long-time founder and CEO. I expect the stock price to more than double and exceed $220 within the next 5 years.

The API Economy and Twilio

January 23, 2020 / poffringa

One of the bigger trends to emerge in software development over the past 5 years is the ability to outsource common software “plumbing” to third party providers through APIs. This has created big opportunities for the companies that provide these services, as the long tail of developers at enterprises going through digital transformation initiatives take advantage of this capability. I examine this trend towards API consumption and how it benefits the leading communications API provider, Twilio (TWLO).

MongoDB at Needham Growth Conference

January 20, 2020 / poffringa

On January 14, MongoDB (MDB) presented at the Needham Growth Conference. Michael Gordon, the CFO and COO, represented MongoDB. I always enjoy listening to Michael’s perspective because of his dual role – he can speak to both the financial position, as well as the business operations and long term strategy of the company. He has a strong grasp of the database landscape and how MongoDB offerings are positioned within it.

Listening to the presentation, I had a couple of take-aways. As readers know, I am long-term bullish on MongoDB. My optimism is driven by a few factors – 1) the overall size/growth of the data storage market, 2) the current “database refresh” occurring as a result of new app development and re-architecture of legacy systems, and 3) MongoDB’s popularity with developers and leading position in coding bootcamp curriculums.

Fastly (FSLY) Stock Review

January 16, 2020 / poffringa

Fastly (FSLY) is a leading edge cloud platform. While they support traditional CDN use cases, their focus and future growth opportunity lies in enabling edge computing. Edge computing represents a large addressable market and Fastly is rapidly rolling out new product offerings in this area. They are developer-centric with strong appeal to the developer community, due to their advantages in performance, security and programmability. Fastly has broad penetration among a set of forward-thinking enterprise customers and is experiencing high DBNER. They are founder led, with a strong leadership team. For these reasons, I think FSLY stock is worth consideration as part of a long term investment portfolio.

Alteryx at Needham Growth Conference

January 15, 2020 / poffringa

On January 14, Dean Stoecker, Alteryx’s CEO, and Kevin Rubin, the CFO, spoke at the Needham Growth Conference. This conference included many of the software stack companies we track (MDB, DDOG, APPN, SMAR, etc.). Listening to the presentation, I had a couple of encouraging take-aways that further reinforce my long term view on Alteryx stock performance. I am bullish on AYX. Interested readers can review my prior recommendation.

Morgan Stanley Updates on CPaaS Stocks

January 14, 2020 / poffringa

On January 13th, Morgan Stanley analysts released a number of ratings for software stack companies in the communications software sector. This provided an update on opportunities for 2020. These highlighted continued strength in Twilio (TWLO), which we regard favorably.

MongoDB to Benefit from NoSQL Tailwinds

January 10, 2020 / poffringa

As readers know, I am long on MongoDB, making a purchase recommendation in Nov 2019 for a 5 year holding period. Growth will be driven by their rapidly expanding product offering in an enormous addressable market. The database product is developer-friendly and represents a popular choice for start-ups and new software projects. The pace of enterprise migrations is increasing as companies revisit their legacy database infrastructure and MongoDB expands into adjacent use cases, like search and data warehousing.

I recently came across an article and a podcast that further reinforced the growth of opportunities for “NoSQL” solutions relative to relational databases going into the future. I will share the salient points and provide some analysis of what these trends mean for MongoDB’s growth trajectory.

Analysts Name Twilio Top Pick for 2020

January 8, 2020 / poffringa

As the new year has started, many analysts are publishing their “Top Pick” lists for 2020. This has favored well for several software stack companies so far this month, following the sell-off in many high growth cloud/software names we experienced in 2H2019. Coming out of this, on Jan 7th, two analysts named Twilio to their Top Pick lists for 2020. I have been long in Twilio and was happy to see this affirmation to start the year.

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