Hi guys,
I've been wanting to compare SHOP, OKTA, and AYX so I sat down and got some numbers. I've learned
that I need to learn a lot more. Hopefully you all can fill in some of the blanks.
**Alteryx** (AYX)
+large TAM (?80billion and growing) and small market cap **(2.27 billion)**
+good reputation from data scientists I have spoken to
+probably cash flow positive 2018
+large industry (? bubble), many uses, many sorta competitiors
Revenue |Dollar Revenue Retention | Cost of revenue | Efficiency of capital
2015 54 (54%) 125% (approx) 19.5% (revenue generated per dollar invested
2016 86 (59%) 130% 18.7% 0.77
2017 132 (53%) 132% 16.6% 0.45
EV/S 9-10 range for guided 2018
**SHOP**
large TAM (60+ billion), medium market cap **(14 billion)**
insane growth, just absolutely insane( percentages are slowing down only because such huge numbers,
shopify plus an ever increasing percentage of MRR (21%)
has a huge amount of cash right now
Revenue | efficiency of capital | operating leverage | MBRR (monthly billing revenue retention
2016 389 (90%) 0.79 58% >100%
2017 673 (73%) 0.64 57% >100%
2018 guiding 960 (42%)
EV/S 13-14 range for 2018 (bonkers expensive)
i think they report operating leverage to show that their fixed costs are decreasing as a percentage
of their revenue increases. any other ideas?
I wish shop would report their Dollar Revenue Retention (DRR). I found one hint that it was right
around 100% a few years back but hard to say now.
I think their efficiency of capital has gone down recently because of the capital raises.
**OKTA**
*note their fiscal years are one year ahead
Amazon recently entered into the single sign on (sso) market
Microsoft is a large competitor
medium tam (~18 billion) relatively large marketcap (4billion) for their TAM
close to cash flow positive
Revenue DRR freecashflow efficiency of capital
2017 160 123% -53.8 (33.6% of revenue) 1.23
2018 260 (62%) *empty -37 (14.3% of revenue) 0.77
2019 guiding 345 (32%)
I worry a bit about their guidance since q1 they are saying should be ~50% (70 million) growth would
would imply serious slow down later in their year since they are only guiding for 2019 revenue of
345 million. Their efficiency of capital in conjecture with a high DRR means they should be earning
some serious cash moving forward. I guess the big question is how sticky is the Single Sign on business.
All these companies are forecasting decreased growth to the 35(AYX and OKTA) to 42%(SHOP)which if
true means a bit of a bloodbath for all of us. In my opinion AYX has the biggest chance to grow
as they are sitting at a much lower marketcap, generating some free cash flow and appear to me
to be the cheapest. I'm not sure what to make of OKTA, they are close to cash flow positive but
their valuation for their growth is even higher than SHOP or AYX. I'm also not thrilled with their
relatively large market cap although when you look at their revenue compared to what people predict
for SSO spending it appears they have a big market to grow into. SHOP defies my understanding at
this point. They are growing like mad, have a huge amount of cash in the bank. I suspect that they
could turn on the earning spigot at pretty much any point, or become cash flow positive easily but
just ramping down some of their variable expenses. I am slightly nervous that they don't report
churn and i don't know if the MBRR that they report is equivalent to DRR. If it is, then their
churn can't be that bad. Anywho. This is my long winded way of saying i have my largest allocation
in AYX (11)%, followed closely by SHOP(9%) with OKTA (4%) being a distant third.
The SaaS space has gotten expensive with average EV/S going from under 6 to close to 9 which is the highest ratio since 2008.
Please forgive me for not having the same numbers for each company. Was a bit of a slog to get what
I got.
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The SaaS space has gotten expensive with average EV/S going from under 6 to close to 9 which is the highest ratio since 2008.
Absolutely True.
You must realize that there are at least 2 vastly disparate viewpoints here, ethan.
-
Non-participating. These are the folks with the stunned looks, shaking their heads and mumbling about
how these guys are going to be slayed one day soon. (They may be right.) -
Participants. When you’re holding XYZ and they become very, very, very expensive in a short time …
is that a good thing or a bad thing?
-
Have a lot of stories, reasoning and many avenues for ‘complaint’. “Glad I’m not so foolish.”
-
Just glad to have a view of the forest through the trees.
-
“I wish things would return to normal.”
-
“Welcome to the new normal.”
-
“Something could change the market. Yikes!”
-
“The world is changing now. Wow!”
-
“Don’t listen to the #2’s.”
-
“Listen to everyone.”
Dan
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