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

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>Splunk completed the year on a positive note and delivered an all-around beat while exceeding its forecasted targets for revenue, total ARR, cloud ARR, operating margin, and free cash flow.</li><li>In Q4, they increased overall ARR by 18% year on year to $3.674 billion.</li><li>In Q4, Splunk secured major deals against a large enterprise competitor by demonstrating that adequate security, cloud migration, and pricing are insufficient.</li></ul>

Splunk completed the year on a positive note and delivered an all-around beat while exceeding its forecasted targets for revenue, total ARR, cloud ARR, operating margin, and free cash flow.In Q4, they increased overall ARR by 18% year on year to $3.674 billion.In Q4, Splunk secured major deals against a large enterprise competitor by demonstrating that adequate security, cloud migration, and pricing are insufficient.

Algosun Global

<ul>
<li>We double down on New Relic stock as we see operational improvement and a clear path to non-GAAP profitability. A strong balance sheet will help to survive an economic downturn.</li>
<li>The company will repay 0.5% senior convertible notes in 2023 and is not interested in diluting existing shareholders. New Relic ended 2QFY23 with $833M in cash and cash equivalents.</li>
<li>American activist investor Jana Partners held ~3.2M New Relic shares as of Nov-22. <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 underperformed in 2022, with shares down ~49%</li>
</ul>


We double down on New Relic stock as we see operational improvement and a clear path to non-GAAP profitability. A strong balance sheet will help to survive an economic downturn.
The company will repay 0.5% senior convertible notes in 2023 and is not interested in diluting existing shareholders. New Relic ended 2QFY23 with $833M in cash and cash equivalents.
American activist investor Jana Partners held ~3.2M New Relic shares as of Nov-22. New Relic Inc (NEWR US)  shares underperformed in 2022, with shares down ~49%


New Relic: $1B+ Revenue By FY24. Cost Discipline Will Drive Profitability

Concise Playbook for the Week, Global Markets Playbook

Kevin George

Concise Playbook for the Week

Global Markets Playbook

I am an active trader in stocks, FX and commodities with over 15 years' market experience. I hold a master's degree in finance and have developed a strong skill base in technical analysis. 

Alongside technical setups I will provide earnings analysis, company valuation analysis and macroeconomic studies for the key market releases.

<ul>
<li>Splunk is stronger with Q3 earnings and guidance. The company is shadowed by takeover talk.</li>
<li>The company has a strong cloud market make it a buy. The firm is shadowing by takeover talks.</li>
<li>The firm has been in the news for more than two years.</li>
</ul>


Splunk is stronger with Q3 earnings and guidance. The company is shadowed by takeover talk.
The company has a strong cloud market make it a buy. The firm is shadowing by takeover talks.
The firm has been in the news for more than two years.


Splunk Is A Rare Tech Growth Opportunity For 2023

<ul>
<li>We maintain a bullish view on <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>  after the company reported stronger than expected 3QFY23 revenues and management updated its financial guidance for FY23. </li>
<li>We were impressed with subscription revenue growth, strong gross margins, and lower-than-expected operating loss. <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>  increased FY23 revenue guidance to <strong>$298M-$299M</strong>.</li>
<li>Our estimates suggest the company will cross the $300M ARR mark in 2022 and the stock currently trades at a discount to the 20%+ growth peer group.</li>
</ul>


We maintain a bullish view on Sumo Logic Inc (SUMO US)  after the company reported stronger than expected 3QFY23 revenues and management updated its financial guidance for FY23. 
We were impressed with subscription revenue growth, strong gross margins, and lower-than-expected operating loss. Sumo Logic Inc (SUMO US)  increased FY23 revenue guidance to $298M-$299M.
Our estimates suggest the company will cross the $300M ARR mark in 2022 and the stock currently trades at a discount to the 20%+ growth peer group.


Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results

United States

Splunk Inc. develops web based application software. The Company provides software that collects and analyzes machine data generated by websites, applications, servers, networks, and mobile devices. Splunk serves customers worldwide.

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Splunk Inc (SPLK 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

Splunk Inc.: Major Drivers

Splunk completed the year on a positive note and delivered an all-around beat while exceeding its forecasted targets for revenue, total ARR, cloud...

Baptista Research

New Relic: $1B+ Revenue By FY24. Cost Discipline Will Drive Profitability

We like New Relic’s turnaround story and believe revenue growth will accelerate in the coming years while the company will hit $1B+ revenue this year

Andrei Zakharov

Splunk Is A Rare Tech Growth Opportunity For 2023

High valuations are now hard to attain, and a company needs to see real organic growth to shake off the bearish market sentiment.

Kevin George

Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results

Sumo Logic remains our top small-cap pick in US Software. Management provided long-term guidance and disclosed a clear plan to reach profitability...

Andrei Zakharov

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