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> , a leading search technology company, reported strong Q3 FY’22 results that topped estimates. Cloud revenue surged 79% year-over-year, and free cash flow was ~$3M. </li>
<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>  shares underperformed in CY’22, with shares down ~37% YTD versus a ~29% loss on the WCLD – WisdomTree Cloud Computing Fund. </li>
<li>Shares of Elastic jumped to ~$87.00/share after the company reported third-quarter earnings the previous week, but then the stock erased early gains due to broader sell-off in tech shares. </li>
</ul>



Elastic NV (ESTC US) , a leading search technology company, reported strong Q3 FY’22 results that topped estimates. Cloud revenue surged 79% year-over-year, and free cash flow was ~$3M. 

Elastic NV (ESTC US)  shares underperformed in CY’22, with shares down ~37% YTD versus a ~29% loss on the WCLD – WisdomTree Cloud Computing Fund. 
Shares of Elastic jumped to ~$87.00/share after the company reported third-quarter earnings the previous week, but then the stock erased early gains due to broader sell-off in tech shares. 


Q3 FY’22 Earnings Review: Spectacular Revenue Growth Driven By The Cloud Business

<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

Equity Capital Markets

<ul>
<li>HashiCorp is a cloud infrastructure automation company offering industry leading-products with high-profile customer list and freemium business model. The unicorn was backed by leading VC investors. </li>
<li>HashiCorp is the open-source software company, which is well-positioned to gain market share in the cloud infrastructure, security and networking addressable markets. </li>
<li>The company filed to go public this month. Our post-IPO valuation implies substantial upside potential to last private round valuation and we have favorable view of the upcoming IPO.</li>
</ul>


HashiCorp is a cloud infrastructure automation company offering industry leading-products with high-profile customer list and freemium business model. The unicorn was backed by leading VC investors. 
HashiCorp is the open-source software company, which is well-positioned to gain market share in the cloud infrastructure, security and networking addressable markets. 
The company filed to go public this month. Our post-IPO valuation implies substantial upside potential to last private round valuation and we have favorable view of the upcoming IPO.


HashiCorp IPO: Serious Player in Multi-Cloud Infrastructure Automation Segment

<p>In September, <a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a>  announced Q2’22 earnings results and the stock plunged more than 10% after results were released. Investors were disappointed by higher-than-expected operating losses, weak gross margins and declining net dollar retention rate. However, management increased guidance for FY’22. Revenue will increase to ~$238M in FY’22, representing a growth rate of 17%. We believe investors overreacted to mixed Q2’22 earnings results and expect Sumo Logic stock to rebound in the area of $19-$20 per share till the end of the year, implying 20%+ upside potential vs. current levels.   </p>

In September, Sumo Logic Inc (SUMO US)  announced Q2’22 earnings results and the stock plunged more than 10% after results were released. Investors were disappointed by higher-than-expected operating losses, weak gross margins and declining net dollar retention rate. However, management increased guidance for FY’22. Revenue will increase to ~$238M in FY’22, representing a growth rate of 17%. We believe investors overreacted to mixed Q2’22 earnings results and expect Sumo Logic stock to rebound in the area of $19-$20 per share till the end of the year, implying 20%+ upside potential vs. current levels.   

Investors Overreacted To Mixed Q2’22 Earnings Results. The Stock Is Set For A Rebound

<p>San Francisco-based <a href="https://www.smartkarma.com/entities/amplitude-inc" target="_blank" data-smartkarma-citation="entities:34148:1" rel="noopener">Amplitude (AMPL US)</a> , best-in-class product analytics and digital optimization technology unicorn, filed for a direct listing and expects their Class A common stock to begin trading on September 28, 2021. The company has registered up to ~35.4M shares to sell in the direct listing with the reference price to be announced. Amplitude plans to list their Class A shares on the Nasdaq Capital Market under the symbol “AMPL”. Direct listing means that there will be no book building process and none of the existing shareholders will be subject to 180-day contractual lock-up agreement. Morgan Stanley, Bank of America, Citigroup, KeyBanc Capital Markets, Baird, UBS and William Blair will serve as financial advisors.</p>

San Francisco-based Amplitude (AMPL US) , best-in-class product analytics and digital optimization technology unicorn, filed for a direct listing and expects their Class A common stock to begin trading on September 28, 2021. The company has registered up to ~35.4M shares to sell in the direct listing with the reference price to be announced. Amplitude plans to list their Class A shares on the Nasdaq Capital Market under the symbol “AMPL”. Direct listing means that there will be no book building process and none of the existing shareholders will be subject to 180-day contractual lock-up agreement. Morgan Stanley, Bank of America, Citigroup, KeyBanc Capital Markets, Baird, UBS and William Blair will serve as financial advisors.

Founder-Led Unicorn And Leader In Product Analytics

United States

Elastic N.V. provides information technology and data analysis services. The Company offers monitoring, security analysis, enterprise search, cloud computing, and open source application performance monitoring solutions. Elastic serves customers in the United States.

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Elastic NV (ESTC US)

Q3 FY’22 Earnings Review: Spectacular Revenue Growth Driven By The Cloud Business

Elastic Cloud remains a revenue growth driver as customers are spending more in the cloud, and the company expects $1B+ revenue in FY’23

Andrei Zakharov

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

HashiCorp IPO: Serious Player in Multi-Cloud Infrastructure Automation Segment

HashiCorp, one of the leaders among infrastructure automation platform providers, filed to go public after a successful Nasdaq debut of open source...

Andrei Zakharov

Investors Overreacted To Mixed Q2’22 Earnings Results. The Stock Is Set For A Rebound

Sumo Logic shares still have 20%+ upside potential under our bear case scenario. However, longer term, we remain bullish on Sumo Logic stock and...

Andrei Zakharov

Founder-Led Unicorn And Leader In Product Analytics

Amplitude, the growth engine for digital products, will go public via direct listing and we think its fully SaaS, cloud-native product with...

Andrei Zakharov

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