Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a>  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  </li>
<li>We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. </li>
<li>Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. </li>
</ul>



Elastic NV (ESTC US)  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  
We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. 
Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. 


Elastic: High-Profile Search Company With Attractive Fundamentals

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

<ul><li>DataDog was one of the many pricey SaaS players that recently went through a minor correction after increasing investor fears associated with rising interest rates.</li><li>These customers accounted for roughly 80% of the company’s ARR which is a good sign as its focus is on high-value clients.</li><li>While we are optimistic about Datadog's future, we believe its current valuation is still pricey despite the recent correction, which is why we give it a 'Hold' rating.</li></ul>

DataDog was one of the many pricey SaaS players that recently went through a minor correction after increasing investor fears associated with rising interest rates.These customers accounted for roughly 80% of the company’s ARR which is a good sign as its focus is on high-value clients.While we are optimistic about Datadog's future, we believe its current valuation is still pricey despite the recent correction, which is why we give it a 'Hold' rating.

DataDog: A Hyper-Growth SaaS Stock (12/2021)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>There are 6 inclusions and 6 exclusions for the <a href="https://www.smartkarma.com/entities/nasdaq-100-stock-index" target="_blank" data-smartkarma-citation="entities:26197:1" rel="noopener">Nasdaq-100 Stock Index (NDX INDEX)</a> at the annual December reconstitution. The estimated one-way trade is US$11.05bn.</li>
<li>Impact on the inclusions ranges from 0.25-2.22 days of ADV to buy, while the impact on the deletions varies from 1.4-3.38 days of ADV to sell.</li>
<li>There will be large inflows on <a href="https://www.smartkarma.com/entities/meta-platforms-inc-class-a-facebook" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Meta Platforms (FB US)</a> and large outflows on Tesla, Apple, NVidia, Amazon and Google.</li>
</ul>


There are 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. The estimated one-way trade is US$11.05bn.
Impact on the inclusions ranges from 0.25-2.22 days of ADV to buy, while the impact on the deletions varies from 1.4-3.38 days of ADV to sell.
There will be large inflows on Meta Platforms (FB US) and large outflows on Tesla, Apple, NVidia, Amazon and Google.


NASDAQ 100 Index Rebalance: Six Changes at the Annual Reconstitution

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.

Palantir Technologies  / Equity Bottom-Up

We continue to be baffled by Palantir. Rampant obfuscation in conference call answers, investor presentations, and the 10Q. The company is targeting $400MM in "adjusted free cash flow this year"...we have it about $530MM lower.We remain short.<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

We continue to be baffled by Palantir. Rampant obfuscation in conference call answers, investor presentations, and the 10Q. The company is targeting $400MM in "adjusted free cash flow this year"...we have it about $530MM lower.We remain short.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.<table class="table table-striped"><tbody>
<tr>
<td style="width: 192.0pt;">Paytm IPO Details</td>
<td style="width: 137.0pt;">@ INR2,080 </td>
<td style="width: 87.0pt;">@ INR2,150</td>
</tr>
<tr>
<td style="width: 192.0pt;">Shares Outstanding Pre-IPO (m)</td>
<td style="width: 137.0pt;">                                            609.7</td>
<td style="width: 87.0pt;">                       609.7</td>
</tr>
<tr>
<td style="width: 192.0pt;">Offer Shares/New Shares Issued (m)</td>
<td style="width: 137.0pt;">                                              39.9</td>
<td style="width: 87.0pt;">                         38.6</td>
</tr>
<tr>
<td style="width: 192.0pt;">Total Shares Outstanding post-IPO (m)</td>
<td style="width: 137.0pt;">                                            649.6</td>
<td style="width: 87.0pt;">                       648.3</td>
</tr>
<tr>
<td style="width: 192.0pt;">Market Cap (INRm)</td>
<td style="width: 137.0pt;">                                1,351,111.5</td>
<td style="width: 87.0pt;">           1,393,788.4</td>
</tr>
<tr>
<td style="width: 192.0pt;">Post-Money Enterprise Value (INRm)</td>
<td style="width: 137.0pt;">                                1,254,116.5</td>
<td style="width: 87.0pt;">           1,296,793.4</td>
</tr>
</tbody></table>Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/442/original/image_54411635561636403842771.png?1636403843" class="editor-image img-responsive" data-smartkarma-image-id="240442"></figure>Source: Company disclosures

Paytm (PAYTM IN), India’s largest digital ecosystem for consumers and merchants has opened its book-building which will run from 08th November to the 10th of November. Paytm plans to raise INR183bn (approx. US$2.4bn) through the issuance of a mix of new shares (approx. INR83bn) and existing shares (INR00bn) at an indicative price range of INR2,080-2,150 per share. At the above price range, Paytm will have a market capitalisation of INR1,351.1-1,396.6bn and a post-money enterprise value of INR1,254.1-1,296.8bn.

Paytm IPO Details
@ INR2,080 
@ INR2,150


Shares Outstanding Pre-IPO (m)
                                            609.7
                       609.7


Offer Shares/New Shares Issued (m)
                                              39.9
                         38.6


Total Shares Outstanding post-IPO (m)
                                            649.6
                       648.3


Market Cap (INRm)
                                1,351,111.5
           1,393,788.4


Post-Money Enterprise Value (INRm)
                                1,254,116.5
           1,296,793.4

Source: Company disclosures (offer shares calculated by dividing new share issue of INR83bn by the IPO price, Enterprise value after adjusting for net debt and net IPO proceeds (we have assumed underwriting and other costs to be about 7.25% of gross proceeds) and cash and debt as of June 2021)The company has already raised INR82.3bn from anchor investors (about 45.0% of the total offer) ahead of its IPO at a price of INR2,150 per share, and according to the company, its cornerstone investment was oversubscribed by more than 10x. These anchor investors include BlackRock, Vanguard, CPPIB, BirlaMF and GIC.Paytm plans to use the net proceeds from the IPO on growing and strengthening its Paytm ecosystem, investing on new business initiatives, acquisitions and strategic partnerships and for other general corporate purposes.Source: Company disclosures

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

United States

Datadog, Inc. provides software solutions. The Company offers cloud-based monitoring and analytics platform which integrates and automates infrastructure monitoring, application performance monitoring, and log management for real-time observability of customers. Datadog operates worldwide.

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Datadog (DDOG US)

Elastic: High-Profile Search Company With Attractive Fundamentals

Elastic is a high-profile search technology company and we believe current valuations look attractive for long-term investors

Andrei Zakharov

DataDog: A Hyper-Growth SaaS Stock (12/2021)

DataDog was one of the many pricey SaaS players that recently went through a minor correction after increasing investor fears associated with...

Baptista Research

NASDAQ 100 Index Rebalance: Six Changes at the Annual Reconstitution

There are 6 changes for the NASDAQ-100 index at the annual December reconstitution. Apart from the flows on the adds and deletes, there will be...

Brian Freitas

Palantir 3Q21 Earnings: We Buy Growth

We continue to be baffled by Palantir. The company is targeting $400MM in "adjusted free cash flow this year"...we have it about $530MM lower. We...

Aaron Gabin

Paytm IPO: More Expensive than Global Payment Giants and SOTP Suggests More Than 40% Discount

With not so conservative assumptions, our SOTP valuation suggests that Paytm's shares are significantly overvalued at the IPO price range. At the...

Shifara Samsudeen, FCMA, CGMA

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