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Elastic (ESTC) Stock Analysis

March 12, 2020 / poffringa

Date of Recommendation:          March 12, 2020
Stock Price at Publishing:       $48.76
5 Year Price Target:             $170.00

Elastic (ESTC) stock should be considered for long term investment. I expect the price of Elastic’s stock to increase significantly over the next 5 years. Growth will be driven by their leading position as a generalized development platform for search, which in the broadest sense encompasses wide applications of data discovery. Their product development cadence has accelerated in the last few years, driven by thoughtful acquisitions and organic growth. Strong developer mindshare is supported by an open core software licensing model. Revenue growth has been consistently high with impressive customer expansion rates. The leadership team is strong, led by a technically-oriented founder and CEO. I expect the stock price to more than triple and exceed $170 within the next 5 years.

Alteryx Returns to Leader Status in Gartner Magic Quadrant

February 27, 2020 / poffringa

A few days after Alteryx’s earnings release, Gartner published its updated Magic Quadrant for Data Science and Machine Learning Platforms. Alteryx recaptured the Leader position, after being moved to a Challenger in 2019. Gartner highlighted solid expansion in Alteryx’s product vision, driven by improvements in augmented machine learning and process automation. Additionally, Alteryx was rated as having the highest ability to execute on its vision amongst all companies. This recognition from Gartner validates Alteryx’s strong product position and reflects progress in 2019 to extend its offerings across the full life-cycle of data science and machine learning.

Fastly (FSLY) Q4 2019 Earnings Results Review

February 25, 2020 / poffringa

Fastly announced earnings results for Q4 and full year 2019 on February 20, 2020. Results beat expectations on most measures, with strong revenue outperformance for Q4. Bundled with the earnings results was an announced CEO transition. The market reacted negatively the following day, pushing the stock down about 6%. This did coincide with a general market sell-off, which may have over-corrected the reaction. Projections for 2020 were inline and provide room for upside. Let’s take a look at the details and take-aways for investors.

Alteryx (AYX) Q4 2019 Earnings Results Review

February 19, 2020 / poffringa

Alteryx released earnings results for Q4 2019 on February 13, 2020. Overall, results were strong and exceeded expectations. The market responded favorably by driving the stock price up 9.5% the following day to an all-time high. Analysts were positive in their response with raised price targets. Projections for 2020 surpassed estimates, with ample room to outperform. Let’s do a deep-dive of the results.

Zendesk (ZEN) Q4 2019 Earnings Results Review

February 17, 2020 / poffringa

Zendesk released earnings results for Q4 2019 on February 6, 2020. Reaction to these results were generally positive. The market bid ZEN stock up slightly the next day, closing up about 0.3%. Analysts were uniform in their reaction, with 6 out of 6 analysts raising their price target and reiterating a buy rating. Projections for 2020 were on target, with room to outperform. Let’s take a deeper look at the results.

Twilio (TWLO) Q4 2019 Earnings Results

February 7, 2020 / poffringa

Twilio released earnings results for Q4 2019 on February 5, 2020. These results were met with mixed response. The market clearly expected more, with TWLO stock closing down 7.3% on the following day. Yet, analysts reacted favorably with 6 out of 7 raising their price target and reiterating a buy rating. Let’s dive into the details.

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).

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