Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

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> reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. </li>
<li>Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. </li>
<li>We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.</li>
</ul>



Elastic NV (ESTC US) reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. 
Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. 
We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.


Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

<ul>
<li>GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.</li>
<li>Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.</li>
<li>The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.</li>
</ul>


GitLab shares have materially underperformed the NASDAQ; GTLB shares down ~28% over the year versus a 14.5% gain on the NASDAQ and a 10.6% loss on the IGV.
Shares saw pressure early in the year because investors reassessed the company’s long-term growth profile in the context of the AI transition in software development.
The stock has since bottomed in the low $20s and gained ~44%. I continue to like GTLB for its superior gross margins, improving FCF and $400M in authorized share buyback.


2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

Our base case continues to be for near-term consolidation while the market determines the implications of states’ reopening (i.e., the “wait-and-see” phase). Until this consolidation period resolves below support or above resistance we are maintaining a relatively neutral stance considering the wide range of outcomes. Many major indexes are testing logical resistance and until we see breakouts it is hard to get too bullish. In this report we highlight attractive stocks from a RS perspective.

Our base case continues to be for near-term consolidation while the market determines the implications of states’ reopening (i.e., the “wait-and-see” phase). Until this consolidation period resolves below support or above resistance we are maintaining a relatively neutral stance considering the wide range of outcomes. Many major indexes are testing logical resistance and until we see breakouts it is hard to get too bullish. In this report we highlight attractive stocks from a RS perspective.

U.S. Equity Strategy: Round Trip Back To Resistance

The S&amp;P 500 has paused just below logical resistance at the downtrend, and we believe the equity market is in wait-and-see mode for incremental information on a variety of issues including trade talks, Fed action and earnings.  Meanwhile, We are upgrading equal-weighted Technology to overweight. Our equal-weighted Tech Sector has surged to the top of our RSR ranks due to broad-based strength in semiconductors last week. Solar stocks are another Group that is emerging as leadership. In today’s report we highlight attractive small-cap Technology stocks, as well as selection of key stocks (MSFT, AMZN, GOOGL, V, NFLX, and ADBE) and subsectors (semis, biotech, and homebuilders) which are all up against logical price resistance.

The S&amp;P 500 has paused just below logical resistance at the downtrend, and we believe the equity market is in wait-and-see mode for incremental information on a variety of issues including trade talks, Fed action and earnings.  Meanwhile, We are upgrading equal-weighted Technology to overweight. Our equal-weighted Tech Sector has surged to the top of our RSR ranks due to broad-based strength in semiconductors last week. Solar stocks are another Group that is emerging as leadership. In today’s report we highlight attractive small-cap Technology stocks, as well as selection of key stocks (MSFT, AMZN, GOOGL, V, NFLX, and ADBE) and subsectors (semis, biotech, and homebuilders) which are all up against logical price resistance.

U.S. Equity Strategy: Market in Wait-And-See Mode; Upgrading Tech

United States

New Relic, Inc. provides cloud based application performance management solutions for cloud and data center applications. The Company offers a solution including real user, application, and availability monitoring features that enable developers and operations teams to manage web application performance in real-time. New Relic conducts its business in the United States.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

New Relic Inc (NEWR US)

Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

Elastic remains my top pick in the observability and search space, and I see the potential for revenue growth re-acceleration in 2024.

Andrei Zakharov

2026 High Conviction Update: GitLab Inc., Valuation Is Cheap But No Major Catalysts In Sight

GitLab is my 2026 high conviction idea in the U.S. software sector. In my follow-up piece, I provide a brief update, focus on investor concerns...

Andrei Zakharov

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

U.S. Equity Strategy: Round Trip Back To Resistance

Our base case continues to be for near-term consolidation while the market determines the implications of states’ reopening (i.e., the...

Vermilion Research

U.S. Equity Strategy: Market in Wait-And-See Mode; Upgrading Tech

The S&P 500 has paused just below logical resistance at the downtrend, and we believe the equity market is in wait-and-see mode for incremental...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)