Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Confluent Inc.'s Q1 2024 performance indicates a robust start for the fiscal year, surpassing all guided metrics with a total revenue growth of 25% to $217 Million, a testament to the successful execution of the firm's strategies, especially amidst a somewhat unpredictable macro-environment.</li><li>Noteworthy in these earnings is the impressive growth of Confluent Cloud, now accounting for over half of the company's subscription revenue and emerging as the fastest-growing offering with a 45% increase to $107 Million.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

Confluent Inc.'s Q1 2024 performance indicates a robust start for the fiscal year, surpassing all guided metrics with a total revenue growth of 25% to $217 Million, a testament to the successful execution of the firm's strategies, especially amidst a somewhat unpredictable macro-environment.Noteworthy in these earnings is the impressive growth of Confluent Cloud, now accounting for over half of the company's subscription revenue and emerging as the fastest-growing offering with a 45% increase to $107 Million.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Confluent Inc.: Initiation of Coverage -  Shift Towards Consumption Profile & Other Pivotal Growth Drivers

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

<ul>
<li>Freshworks, a cloud-based customer services software unicorn, held its first Investor Day on September 7, 2023. Management highlighted the long-term target to deliver the Rule of 40 by 2025. </li>
<li>The 2023 Investor Day agenda included company vision and strategy, solutions in action, strategy for durable growth, customer spotlight, and financial overview, among others. </li>
<li>Management plans to deliver a long-term balance of growth and profitability, with the 2026 model leading to an FCF margin of 20%+ and $1B+ revenue. </li>
</ul>


Freshworks, a cloud-based customer services software unicorn, held its first Investor Day on September 7, 2023. Management highlighted the long-term target to deliver the Rule of 40 by 2025. 
The 2023 Investor Day agenda included company vision and strategy, solutions in action, strategy for durable growth, customer spotlight, and financial overview, among others. 
Management plans to deliver a long-term balance of growth and profitability, with the 2026 model leading to an FCF margin of 20%+ and $1B+ revenue. 


Freshworks: 2023 Investor Day and Valuation Update

<ul>
<li>I remain bullish on the stock and reiterate a $37 PT. <a href="https://www.smartkarma.com/entities/confluent-inc" target="_blank" data-smartkarma-citation="entities:33443:1" rel="noopener">Confluent (CFLT US)</a> delivered upside to total revenue, gross margin, and non-GAAP operating margin estimates.</li>
<li>The company raised guidance for CY23 total revenue and profitability. There were plenty of positives, including cloud momentum and customer demand.</li>
<li>The US-based data streaming pioneer appears well positioned to outperform my estimates, and I see a path to profitability (non-GAAP) in CY24 at the earliest.</li>
</ul>


I remain bullish on the stock and reiterate a $37 PT. Confluent (CFLT US) delivered upside to total revenue, gross margin, and non-GAAP operating margin estimates.
The company raised guidance for CY23 total revenue and profitability. There were plenty of positives, including cloud momentum and customer demand.
The US-based data streaming pioneer appears well positioned to outperform my estimates, and I see a path to profitability (non-GAAP) in CY24 at the earliest.


Confluent. 2Q Wrap: Solid Results and Leadership Position In a $60B+ TAM

<ul>
<li>
<a href="https://www.smartkarma.com/entities/confluent-inc" target="_blank" data-smartkarma-citation="entities:33443:1" rel="noopener">Confluent (CFLT US)</a>, a high-growth data streaming vendor, will host Investor Day 2023 in New York City on <strong>June 13, 2023</strong>. </li>
<li>Management will provide an update on the company’s vision and strategy. <a href="https://www.smartkarma.com/entities/confluent-inc" target="_blank" data-smartkarma-citation="entities:33443:1" rel="noopener">Confluent (CFLT US)</a> shares traded up ~64% in 2023, outperforming the Nasdaq Composite, up ~27%.</li>
<li>I expect CY24 revenue to exceed $1B, driven by efficient growth at a large scale, strong growth in the cloud segment, and rapid adoption of Apache Kafka.</li>
</ul>



Confluent (CFLT US), a high-growth data streaming vendor, will host Investor Day 2023 in New York City on June 13, 2023. 
Management will provide an update on the company’s vision and strategy. Confluent (CFLT US) shares traded up ~64% in 2023, outperforming the Nasdaq Composite, up ~27%.
I expect CY24 revenue to exceed $1B, driven by efficient growth at a large scale, strong growth in the cloud segment, and rapid adoption of Apache Kafka.


Confluent: Upgrade To OW On Consistent Execution And A Clear Path To Profitability. PT Raised To $37

Algosun Global

<ul>
<li>New Relic reported a solid quarter pushing shares up ~18% during the regular trading session as y/y revenue growth accelerated while gross margin and operating income continued to expand.</li>
<li>We like New Relic’s fundamentals and transformation plan driven across the business. The company raised the outlook for FY23 revenue as 3QFY23 results exceeded guidance. </li>
<li>New Relic invites investors to an Analyst Day in May, where the company will announce the FY24 financial plan details and give more color about the updated GTM strategy. </li>
</ul>


New Relic reported a solid quarter pushing shares up ~18% during the regular trading session as y/y revenue growth accelerated while gross margin and operating income continued to expand.
We like New Relic’s fundamentals and transformation plan driven across the business. The company raised the outlook for FY23 revenue as 3QFY23 results exceeded guidance. 
New Relic invites investors to an Analyst Day in May, where the company will announce the FY24 financial plan details and give more color about the updated GTM strategy. 


New Relic: Impressive 3QFY23. Profitable Growth Accelerated Driven By Efficiency Initiatives

United States

Confluent, Inc. operates as a software company. The Company develops cloud-native platform is designed to unleash real-time data. Confluent serves customers worldwide

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Confluent (CFLT US)

Confluent Inc.: Initiation of Coverage - Shift Towards Consumption Profile & Other Pivotal Growth Drivers

Confluent Inc.'s Q1 2024 performance indicates a robust start for the fiscal year, surpassing all guided metrics with a total revenue growth of...

Baptista Research

Freshworks: 2023 Investor Day and Valuation Update

2023 Investor Day highlights massive TAM, ongoing business momentum, adoption of multi-product strategy, and AI monetization opportunities: PT...

Andrei Zakharov

Confluent. 2Q Wrap: Solid Results and Leadership Position In a $60B+ TAM

Confluent reported solid results and achieved sustained high growth despite a choppy macro environment and smaller average deal sizes. The company...

Andrei Zakharov

Confluent: Upgrade To OW On Consistent Execution And A Clear Path To Profitability. PT Raised To $37

Considering Confluent’s superior top-line growth profile, large and growing TAM opportunity, consistent execution, and a clear path to...

Andrei Zakharov

New Relic: Impressive 3QFY23. Profitable Growth Accelerated Driven By Efficiency Initiatives

New Relic surprised investors and reported better-than-expected 3QFY23 results driven by consumption and efficiency initiatives

Andrei Zakharov

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