Category: Uncategorized (Page 9 of 10)

Implications of 2020 Priorities for CIOs

January 6, 2020 / poffringa

Back in December, CIO Magazine published an article listing the Top 5 strategic priorities for CIOs in 2020. Now that 2020 has started, we should examine how these priorities might impact the stock performance of related software stack companies. Focus on improvements in analytics, customer support and workforce automation are highlighted. Investment into these areas by enterprise IT organizations should drive demand for product offerings from several of our favorite software stack companies.

Smartsheet and the Citizen Developer

December 26, 2019 / poffringa

Date of Recommendation:       December 26, 2019 
Closing Stock Price:          $43.93

Smartsheet (SMAR) is a leading provider of collaborative work management tools for enterprises. Their flexible, no-code platform allows users to automate common business workflows like project tracking, request approval processing, customer onboarding, event registration and sales pipeline management. This automation is accomplished without writing custom code, allowing developers to focus on building higher-value customer-facing software.

Due to Smartsheet’s rapidly growing product offering, the huge addressable market, its strong leadership team and consistent expansion within large enterprise customers, it should be considered as a long term investment. I expect the stock price to at least triple and reach a target of $140 in the next 5 years.

Insights from Sumo Logic’s Continuous Intelligence Report

December 23, 2019 / poffringa

Sumo Logic recently published their Continuous Intelligence Report, which details trends in application architecture, deployment processes and management tools in the cloud, based on observations across their 2,000 customers. By reviewing the data in this report, we can glean several insights for software stack company investments.

Twilio Performance Updates

December 19, 2019 / poffringa

Twilio (TWLO) acheived a few accomplishments in the first half of December 2019 that are worth noting. I first recommended Twilio stock for long term investment in November. These accomplishments further emphasize the market-leading position that Twilio enjoys and reinforces the opportunity going into 2020.

Alteryx (AYX) Stock Recommendation

December 18, 2019 / poffringa

Date of Recommendation:       December 17, 2019
Closing Stock Price:          $97.40

Alteryx (AYX) stock should be considered for long term investment. Based on my characteristics for a successful software stack company, I expect the price of Alteryx’s stock to grow significantly over the next 5 years. This will be driven by their expanding product offering in an enormous addressable market. Their data analytics platform is deeply embedded and highly valued by major enterprises, particularly in the global 2000. The product is often described as a “must have” by data analysts with clear ROI tied to business outcomes. The leadership team is strong, led by a long-time founder and CEO. I expect the stock price to more than triple and exceed $325 within the next 5 years.

MongoDB (MDB) Q3 2020 Earnings Results

December 10, 2019 / poffringa

MongoDB (MDB) reported Q3 2020 earnings results after the market closed on December 9th. Overall, the results were strong and exceeded expectations. This drove an initial spike in share price, which has receded through the day. This performance provides a great example of why investors need to maintain a long term perspective with software stack companies. Let’s dive into the results.

Why I Like High DBNERs

December 6, 2019 / poffringa

Dollar Based Net Expansion Rate (DBNER) is a critical metric to track for software stack companies. Companies with consistently high DBNER’s will grow revenues faster than their counterparts and experience significant stock price appreciation. DBNER also provides insight into a software stack company’s competitive moat and its pricing power.

What can Stackshare tell us about software stack investing?

November 25, 2019 / poffringa

Stackshare is a community-driven web site with a strong technology angle. It allows engineering teams within companies to post information about the software components and business tools that they use internally to power their software applications and run their online operations. The content is self-reported by members of the company’s technology organization. The purpose is to share knowledge across companies and socialize best practices. Analysis of the content posted on Stackshare provides insights into real-world use of these software components at large enterprises. This intelligence could influence our investing decisions into the stock of software stack provider companies.

MongoDB (MDB) Stock Recommendation

November 20, 2019 / poffringa

Date of Recommendation:     Nov 19, 2019
Closing Stock Price:        $140.99

MongoDB (MDB) stock should be considered for long term investment. Based on my characteristics for a successful software stack company, I expect MongoDB to grow significantly over the next 5 years. This will be driven by their rapidly expanding product offering in an enormous addressable market. Their database product is developer friendly and represents a popular choice for start-ups. MongoDB has strong developer evangelism and is the default database component in the introductory software stack taught at most coding bootcamps. Their cloud-first Atlas product is rapidly gaining share and provides a vendor-agnostic solution. The pace of enterprise migrations is increasing as MongoDB expands into adjacent use cases. I expect the stock price to exceed $490 within the next 5 years.

Investing Implications of Low Code Development

November 15, 2019 / poffringa

Traditional software development is performed by software engineers with formal training in computer science. This involves writing volumes of customized code in a particular language and pushing that onto a software infrastructure stack. The code writing process is getting more efficient every year through improvements in higher-level languages and the creation of new open source libraries that can be easily imported to address almost any common function. However, even with these productivity improvements, application development output is still constrained by the number of software engineers.

Enter low code development tools, which allow non-engineers with some basic technical skills to produce reliable applications that address common, repeatable functions. This is accomplished through graphical user interfaces and configuration, versus programming. Several companies have emerged that have built their entire product offering and business around this trend. Low code development is a rapidly evolving space that has implications for our software stack investing strategy.

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