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>In spite of the challenging macro environment in the past quarter, Dynatrace managed to deliver an all-around beat in its last result.</li><li>As a result, manual data troubleshooting and dashboard-based analytics are becoming increasingly difficult due to the explosion in data volume and complexity.</li><li>Dynatrace also keeps improving its pricing and packaging strategies, which may help the company reach its full potential and hasten growth.</li></ul>

In spite of the challenging macro environment in the past quarter, Dynatrace managed to deliver an all-around beat in its last result.As a result, manual data troubleshooting and dashboard-based analytics are becoming increasingly difficult due to the explosion in data volume and complexity.Dynatrace also keeps improving its pricing and packaging strategies, which may help the company reach its full potential and hasten growth.

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.

Equity Bottom-Up

<ul>
<li>ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.</li>
<li>The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow's ability to bundle functionality for larger deals.</li>
<li>That said...the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.</li>
</ul>


ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow's ability to bundle functionality for larger deals.
That said...the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.


Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

<ul><li>This is our first report on Dynatrace, a well-known software intelligence platform for dynamic multi-cloud environments.</li><li>The strength of its enterprise customer base and the resilience of its subscription model is reflected in the Q1 performance.</li><li>This offers a solid base from which the company anticipates continuing to deliver a balanced business of growth, profitability, and cash flow.</li></ul>

This is our first report on Dynatrace, a well-known software intelligence platform for dynamic multi-cloud environments.The strength of its enterprise customer base and the resilience of its subscription model is reflected in the Q1 performance.This offers a solid base from which the company anticipates continuing to deliver a balanced business of growth, profitability, and cash flow.

Dynatrace Inc: Initiation of Coverage – Growth Prospects & Strategy

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>Activist hedge fund Jana Partners bought ~2.66M <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a>  shares in 2Q22 and upped its stake in the tech company to 5.3%.</li>
<li>According to Reuters, New Relic may explore a potential sale following interest from private equity firms. Mr. Galligan, a partner of Jana Partners, joined the New Relic Board in June. </li>
<li>New Relic shares trade at ~4x EV/Rev on our FY23 revenue estimate, and we think Splunk may set a ceiling on the multiple at which New Relic may be acquired. </li>
</ul>


Activist hedge fund Jana Partners bought ~2.66M New Relic Inc (NEWR US)  shares in 2Q22 and upped its stake in the tech company to 5.3%.
According to Reuters, New Relic may explore a potential sale following interest from private equity firms. Mr. Galligan, a partner of Jana Partners, joined the New Relic Board in June. 
New Relic shares trade at ~4x EV/Rev on our FY23 revenue estimate, and we think Splunk may set a ceiling on the multiple at which New Relic may be acquired. 


Will Jana Partners Have Success In Pushing New Relic For A Sale?

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.</li>
<li>The key judgement is whether a slowdown is temporary or the beginning of a trend.  These shorts tend to have high valuations and betas.  Multiple compression accelerates the stock’s decline.</li>
<li>Today we are flagging Repligen, Snap, Dynatrace Inc, Intuitive Surgical</li>
</ul>


This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.
The key judgement is whether a slowdown is temporary or the beginning of a trend.  These shorts tend to have high valuations and betas.  Multiple compression accelerates the stock’s decline.
Today we are flagging Repligen, Snap, Dynatrace Inc, Intuitive Surgical


Breaking Growth Short Candidates: Repligen, Snap, Dynatrace, Intuitive Surgical

United States

Dynatrace, Inc. operates as a holding company. The Company, through its subsidiaries, develops software intelligence platform for the enterprise cloud. Dynatrace offers software intelligence platform to allow customers to modernize and automate IT operations, develop and release high quality software faster, and improve user experiences for better business outcomes.

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Dynatrace (DT US)

Dynatrace Inc.: Major Drivers

In spite of the challenging macro environment in the past quarter, Dynatrace managed to deliver an all-around beat in its last result. As a...

Baptista Research

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

The log management observability TAM has shown itself to be largely recession resistant based on the last two quarter's results for DT/DDOG...

Aaron Gabin

Dynatrace Inc: Initiation of Coverage – Growth Prospects & Strategy

This is our first report on Dynatrace, a well-known software intelligence platform for dynamic multi-cloud environments. The strength of its...

Baptista Research

Will Jana Partners Have Success In Pushing New Relic For A Sale?

Our analysis suggests that New Relic may be acquired with a premium of 30%-40% vs. current levels, and Jana Partners will succeed by pushing New...

Andrei Zakharov

Breaking Growth Short Candidates: Repligen, Snap, Dynatrace, Intuitive Surgical

Breaking Growth stocks combine declining fundamentals with a multiple compression. This week we flag: Repligen, Snap, Dynatrace, Intuitive Surgical

Eric Fernandez, CFA

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