Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>Darktrace is a cyber security and AI unicorn backed by leading VC firms. The company was founded in Cambridge, UK, in 2013 and crossed the $500M ARR mark in 2022.  </li>
<li>
<a href="https://www.smartkarma.com/entities/darktrace-plc" target="_blank" data-smartkarma-citation="entities:34466:1" rel="noopener">Darktrace (DARK LN)</a>  currently trades at ~4x EV/CY22E revenues, a steep discount relative to other US-based cybersecurity peers that trade at an average of ~9x EV/CY22E revenues.</li>
<li>The cyber defense company achieved GAAP Op Margin and FCF Margin break-even in FY21 and FY22, with an opportunity to deliver profitable stellar growth in the coming years.</li>
</ul>


Darktrace is a cyber security and AI unicorn backed by leading VC firms. The company was founded in Cambridge, UK, in 2013 and crossed the $500M ARR mark in 2022.  

Darktrace (DARK LN)  currently trades at ~4x EV/CY22E revenues, a steep discount relative to other US-based cybersecurity peers that trade at an average of ~9x EV/CY22E revenues.
The cyber defense company achieved GAAP Op Margin and FCF Margin break-even in FY21 and FY22, with an opportunity to deliver profitable stellar growth in the coming years.


Darktrace: Undervalued Cyber Defense Unicorn. A Steep Discount Is Unjustified

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 Capital Markets

Crowdstrike Holdings  / Equity Capital Markets

<ul><li>CrowdStrike had a solid quarter increasing its revenue by 53% year-over-year, surpassing Wall Street expectations.</li><li>In the enterprise, sales cycles or average days to closure remain marginally higher than the previous quarter.</li><li>Furthermore, LogScale experienced another solid quarter in Q3 thanks to their wins in the financial services, insurance, technology, retail, energy, and telecommunications industries.</li></ul>

CrowdStrike had a solid quarter increasing its revenue by 53% year-over-year, surpassing Wall Street expectations.In the enterprise, sales cycles or average days to closure remain marginally higher than the previous quarter.Furthermore, LogScale experienced another solid quarter in Q3 thanks to their wins in the financial services, insurance, technology, retail, energy, and telecommunications industries.

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<ul>
<li>Snowflake guided below consensus for 4Q2023 revenue growth on a mix of macro conservatism and a quirky point that more vacation travel will reduce the amount of workloads run.</li>
<li>Margins continue to beat to the upside and management is guiding FY2024 FCF marginst to 23%, just 2pts below the LT guidance.</li>
<li>Very conservative management team also guided for a stabilization in revenue growth for FY2024 at 47%, a bit below consensus, but better than feared given the earnings reports recently.</li>
</ul>


Snowflake guided below consensus for 4Q2023 revenue growth on a mix of macro conservatism and a quirky point that more vacation travel will reduce the amount of workloads run.
Margins continue to beat to the upside and management is guiding FY2024 FCF marginst to 23%, just 2pts below the LT guidance.
Very conservative management team also guided for a stabilization in revenue growth for FY2024 at 47%, a bit below consensus, but better than feared given the earnings reports recently.


Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024

<ul>
<li>First ever ARR miss, and big initial guide down on FY2024 ARR growth: low 30s vs. 37% into the Q. Pretty shocking given Crowdstrike's track record.</li>
<li>Macro Macro Macro - deal close times pushed out for SMBs and Enterprise customers reworking timing of deal starts to match opex budgets.</li>
<li>Stock is overly punished down 20% and trading at 9x forward sales for a platform consolidator with 30% FCF margins.</li>
</ul>


First ever ARR miss, and big initial guide down on FY2024 ARR growth: low 30s vs. 37% into the Q. Pretty shocking given Crowdstrike's track record.
Macro Macro Macro - deal close times pushed out for SMBs and Enterprise customers reworking timing of deal starts to match opex budgets.
Stock is overly punished down 20% and trading at 9x forward sales for a platform consolidator with 30% FCF margins.


FY3Q23: If It’s All Macro, Do You Buy the Dip?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In the past 24 hours, there have been many news flow about numerous US airports that have been cyber attacked by suspects from Russia. </li>
<li>The increasing media attention on cyberattack threat could result in greater concerns about cybersecurity inducing higher global spending on software and other services that help to protect against cyber attacks. </li>
<li>Global cybersecurity stocks that could benefit from greater media attention on cyberattacks include Palo Alto Networks (PANW US)  Crowdstrike Holdings Inc (CRWD US)  CloudFlare (NET US).  </li>
</ul>


In the past 24 hours, there have been many news flow about numerous US airports that have been cyber attacked by suspects from Russia. 
The increasing media attention on cyberattack threat could result in greater concerns about cybersecurity inducing higher global spending on software and other services that help to protect against cyber attacks. 
Global cybersecurity stocks that could benefit from greater media attention on cyberattacks include Palo Alto Networks (PANW US)  Crowdstrike Holdings Inc (CRWD US)  CloudFlare (NET US).  


Cyberattacks at Numerous US Airports by Suspects from Russia

United States

CrowdStrike Holdings, Inc. provides cybersecurity products and services to stop breaches. The Company offers cloud-delivered protection across endpoints, cloud workloads, identity and data, and leading threat intelligence, managed security services, IT operations management, threat hunting, Zero Trust identity protection, and log management. CrowdStrike serves customers worldwide.

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Crowdstrike Holdings (CRWD US)

Darktrace: Undervalued Cyber Defense Unicorn. A Steep Discount Is Unjustified

Our analysis suggests Darktrace shares look undervalued relative to peers, and we believe a steep discount is unjustified

Andrei Zakharov

CrowdStrike Inc: Major Drivers

CrowdStrike had a solid quarter increasing its revenue by 53% year-over-year, surpassing Wall Street expectations. In the enterprise, sales cycles...

Baptista Research

Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024

Snowflake produced another impressive quarter and a guidance that was better than feared given the macro concerns other high growth SW companies...

Aaron Gabin

FY3Q23: If It’s All Macro, Do You Buy the Dip?

Buy the dip in Crowdstrike. Still a top software asset with 30% FCF margins and share gains still to come, macro headwinds are now in the numbers....

Aaron Gabin

Cyberattacks at Numerous US Airports by Suspects from Russia

In the past 24 hours, there have been many news flow about numerous US airports that have been cyber attacked by suspects from Russia. This could...

Douglas Kim

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