Before and After Covid

Covid has created an environment unlike the world before, and some companies are suffering from it, or experiencing Headwinds. Others are thriving in/despite this, and even experiencing Tailwinds.

Here I looked at some board favorites and a few others, and classified them based on whether or not their stock price is up or down vs February highs. I will discuss a few below.

All prices are approximate…I did this by hand so excuse any roughness.

**Experiencing Headwinds?**

Stock     Feb High     Curr Price      Diff
PLAN        63            44           -30%
PINS        25            18           -28%
AYX        158           132           -16%

**Experiencing Tailwinds?**

Stock     Feb High     Curr Price      Diff
ZM         107           163           +52% 
CRWD        66            80           +21%
SHOP       545           765           +40%
FSLY        25            38           +52%
NET         22            29           +32%
WORK        28            32           +14%
COUP       173           215           +24%
DDOG        50            68           +36%
OKTA       140           177           +26%
(Most we follow fall into this category.  I could have added DOCU, TWLO, MDB, etc etc.  But I feel I have included enough.)

**Headwinds? Tailwinds? Neither?  Both?**

Stock     Feb High     Curr Price      Diff
SMAR        52            56           + 8%
ROKU       138           133           - 4%
TTD        315           315             0%
ESTC        73            73             0%

Why haven’t CRWD and WORK gone up as other stocks who are experiencing tailwinds? Obviously that’s too complicated to know. Perhaps the market saw them as already expensive (though I don’t see it that was based on growth rates and PS ratios). Perhaps the market doesn’t think they will thrive as much as others in this new environment (but I do). It is interesting to ponder if they will run further, as some others have.

I think ESTC should be experiencing tailwinds. If so, they could be bid up significantly from here. They will report their Q in a few weeks, and that will likely be the catalyst.

AYX is down on slower revenue growth, which makes sense to me. But it’s only down 16%, and it had a higher PS ratio in February. To me this is the market saying it still believes.

PINS is down more, but as I’ve said, I get it:…

PLAN is an interesting one. I really don’t follow it, but it seems SaaSy ™ enough to thrive. They’ll report their Q on May 26. If anyone following them would like to write up their thoughts and post them, I’m all ears.

Last thoughts

A lot of things are getting extremely expensive. And I’m talking market caps. Today DDOG became a $22 billion company. They have $424 million in TTM revenue. That’s a PS ratio over 50! SHOP’s is similar, and its revenue is only growing half as fast as DDOG’s.

Many others sport PS ratios in the 30’s and 40’s. My explanation: The market is desperate for companies that can thrive in this environment. We cannot know to what extent it will eventually go, so I’m not making a call about that…or about when this run-up will end for any of these companies. I have no idea. But there is a run-up happening. Many PS ratios are at all time highs by a lot.

I highlight CRWD and WORK, ESTC and PLAN, not because they’re cheap but because I think perhaps they share some traits with those that have run up more, and yet they haven’t had their run-ups yet. Maybe they never will…it’s just how the numbers look to me.

I also own AYX (why wouldn’t I?) and ZM. ZM is especially interesting because it’s beyond expensive…but it could be justified because their revenue is about to spike massively. We just have no idea how much.

Hope this was thought provoking.



Those with the biggest runs have come as Earnings have been released (minus the run in ZM). Once the fear of a collapse in the business subsides, the buying begins (TINA). DDOG, FSLY, TWLO all had 20+% pops that I’m not sure anyone saw coming?

One name not on your list, Bear, is Zscaler. The stock price has rallied from the lows, but the lows were really low. This may be another founder-led company that saw a problem/opportunity and addressed it. Sales performance (cost and cycle time) was unacceptable. The CRO started in September. Is 6-months enough time to fix the problem and re-accelerate growth?

Is the pandemic a headwind or a tailwind? At first glance, a longer sales cycle would imply a strong headwind. OR, is it a tailwind? Is expediency in decision-making (especially in cyber security) happening in companies that were thinking about making a change?

I’m long ZS at 3%

Great post, Bear, nice seeing those numbers all in one place to compare.

I know you can’t (and weren’t trying to) post all discussed stocks, but one that’s getting a lot more attention around here recently is LVGO. I’m glad of that as I’ve been purchasing since Jan of this year in the low to mid $20’s and finally have some more eyes on it to help analyze as that’s not my forte yet. I purchased up to a medium sized holding but it’s grown to a top 5 position for me.

       Feb High   Curr $   Diff
LVGO      28        60     100%+ 

Market cap now around $5.6B with TTM P/S around 27 (was much lower), still growing in triple digits! Forward P/S from their current 2020 estimate (which they’ll probably beat) would be about 18.

I don’t think anyone will want to miss out on this one going forward as their opportunity seems huge to me per all the reasons posted on recent threads about LVGO and their most recent earnings release.


New to the board and have been trying to understand the board and rules. Found the board last week and nice to see the exchange of views. Work in IT in a mid sized company. While ZM is good, we have not chosen to go that route and do not use it other than when our vendors use it. I have not seen any vendor use Slack. It may be growing but feel that at least for communication between entities is not as heavily used as ZM. ZM , I can see the case but still feel they have a lot of competition from Teams especially for the larger clientele who would still rather favor a Teams over a ZM since many of the larger companies already have a relationship with Microsoft. I see ZM used by many of our software vendors but other non software vendors are not as much on ZM as Teams.

Plan from what I have read is more of a budgeting software and when times are bad like they are now, budgeting software is not the highest priority for implementing. ESTC and CRWD are on my watch list and may pull the trigger on ESTC and wait for CRWD to come down a bit. I picked up AYX when it fell on day of earnings at 112, am thinking it runs up slowly back to where it was.

I own TTD and ROKU as well and debating if I should exit TTD , picked TTD up at 225 but may hang in it till I find another good one to rotate into. ROKU , I bought at 125 and will hold since I think they are still growing well and have good runway ahead of them.

WORK is one I’ve been researching and have taken a ~5% position in. They are clearly experiencing some large tailwinds from COVID and yet the stock is barely above February highs as you noted.

CEO, Steward Butterfield tweeted on March 25, a lot:

Regarding guidance for the current Q, which was poorly received by the market
One thing we can say is that averaging out the best and the worst case to draw a line down the middle doesn’t make any sense. We want to guide to something we know we can achieve, and that means factoring in the downside scenarios more heavily. And that’s what we did.

And how things have progressed:
For us as a company, however, the shift is dramatic. In each of Q3 and Q4, we added around 5,000 net new paid customers. By last Tuesday, halfway through Q1, we had added 7,000. Yesterday, a week later, we crossed the 9,000 mark.
Meanwhile, existing customers are expanding. Enterprise deals are getting done. More new teams are signing up. More upgrading to paid plans. And the intensity of usage is also increasing: people are spending more time in Slack. Average messages sent per day per user is up 20%.
Through it all, with average active usage surging past a billion minutes each weekday, our customer experience team has kept pace beautifully. Network ops & infrastructure engineers deserve huge credit for 99.999% uptime through absolutely unprecedented growth.

Those tweets were posted only a week or two into the lockdown. I think it’s fair to assume that trend has continued. He also included a very impressive graph of how their usage exploded, and that it was too early to draw any conclusions at the time of the earnings report. Here that is:

Revenue guidance for the current quarter was 39% at the high end. I expect they will blow that out of the water considering the huge uptick in paid customers noted in the tweets.

Revenue growth looks like this: 67 58 60 49
Billings: 47 52 47 47
Adjusted operating margins: -25% -38% -11% -13%
FCF: -34M -8M -19M -1M
Net retention rate: 132%

Yes, the margins aren’t Zoom-like, yet. However, they are improving. And as s revenue spikes and they will continue to gain operating leverage. So it seems fair to assume margins will be swinging to the positive sooner rather than later.

What do others think? Am I missing something here?




My daughters school marching band of 200+ uses Slack for the band director to communicate with students and parents. My experience is that it is not super intuitive. It is effective for basic communications but the interface is just OK, nothing special. When I compare that to my experience with Zoom it is night and day. Zoom is simple - intuitive - it just works well - always. Slack is not the same experience.

In looking at the financials, a company that loses more and more money each year is not one I want to own. Sure the pandemic may give them a one time boost and may show a big beat but nothing historically has indicted that they can sustain profitability long term. Your own analysis shows that.

No plans to take any position in WORK. Long ZM.



Just as a counterpoint here, Slack is heavily used by tech teams as a kind of constant, always-on, mode of communication. The Slack interface is highly optimised for tech, and it remains to be seen if they can jump outside of that.

“It’s just chat” you say. Yes, it is, but it (like ZM) is the best of its kind. A (very basic) case in point - on a Mac, you can grab a screen shot to your clipboard (copy) and then paste it directly in Slack. None of the other chat clients could do that.

The other challenge for Slack sounds a bit facetious, but I believe is actually a real issue: Most people can’t type that fast. (A lot of) tech workers can type faster than they can talk, and being able to edit your ‘speech’ is often a real benefit to clarity. But if you find typing difficult, by definition, Slack will be difficult.

So it remains to be seen if Slack can break into other verticals.

My 2c



None of the other chat clients could do that.

While not a chat client in the same sense, one can do this in Signal. Signal provides end to end encryption and has both phone and desktop clients. The phone and desktop mirror one another, which is quite handy.

Revenue guidance for the current quarter was 39% at the high end. I expect they will blow that out of the water considering the huge uptick in paid customers noted in the tweets.

Revenue growth looks like this: 67 58 60 49
Billings: 47 52 47 47
Adjusted operating margins: -25% -38% -11% -13%
FCF: -34M -8M -19M -1M
Net retention rate: 132%

Yes, the margins aren’t Zoom-like, yet. However, they are improving. And as s revenue spikes and they will continue to gain operating leverage. So it seems fair to assume margins will be swinging to the positive sooner rather than later.

Thanks Kyle. Yes, I remember a couple folks here on the board linking to the CEO’s tweets. Does seem like we’re getting a signal that they’re seeing significant tailwinds. Which is important, because I agree with you – the slowing growth was keeping me out as well. So this would definitely be a Zoom-like play on the current situation.

A small position seems about right. Think I’ll dip a toe in. I’m holding too much cash anyway.



Thanks for your (and others') great analysis on this board. I've given your question about PLAN a first bash, happy to hear your views.

Key metrics last FY:

$m		Q1	Q2	Q3	Q4	
Rev.		75.8	84.5	89.4	98.2	
yoy%		47%	46%	44%	42%	< ++ >40% rev growth but decelerating
Sub Rev		65	74	80	90	
% Rev		86%	88%	89%	92%	< ++ Increasing subscription rev as % of total 
Billing		87	89	114	126	
yoy%		57%	46%	59%	25%	< - key issue, billings growth down dramatically
RPO		473	516	590	656	
yoy%		53%	56%	55%	49%	< +/- revenue already in the bag; growth slowing
NRR		123%	121%	123%	122%	< ++ Stable and positive NRR
Ad Loss		-20.1	-16.1	-11	-10.1	
Margin%		-27%	-19%	-12%	-10%	< +/- Improving margins but still properly negative
FCF		-5	1.5	-19.9	-6.1	
Cash		332	356	311	310	< + Enough cash on hand

Other interesting metrics:
Payback period 22 months (improved vs prior Qs)
LTV:CAC - 5.4 times (improved vs prior Qs)

Key issue:
Billing growth dropped from >50% in prior Qs to 25% in Q4.??

Chief Growth Officer:
Mark Anderson was appointed 5 Aug 2019 and left 27 Feb 2020. They mention the US as a problem area with 
some disruption and execution challenges. So looks like this hire did not work out. His role will not
be backfilled.

More refined customer segmentation implemented. They are going after larger and more complex customers 
with higher propensity to buy.

More agile GTM team now led by MDs of 3 regions: Aisia-Pac, Europe, Americas, now reporting directly to 
CEO will drive heightened focus, esp relevant for the US where execution has been lacking in Q4.

Big partner ecosystem with Deloitte very prominent: digital transformation projects with Anaplan+ being 
part of the total solution; the following are now in place with Deloitte (and CEO very excited about 

Anaplan + Salesforce
Anaplan + Adobe
Anaplan + Google Cloud

They have success in sales, supply chain, finance, ops. They mention a large European telecoms customer 
as a big success story (Possibly Vodafone: [](
A personal anecdote, having worked at said large Telco. The annual integrated marketing/sales planning 
and budgeting process was extremely cumbersome during my time there and the forecasting process sucked 
in the whole senior team from all subsidiary companies/territories for 3-4 months each year with 
enormous amounts of time spent going backwards and forwards between various spreadsheets and systems. 
So I can imagine huge efficiency gains through a platform such as Anaplan. I can also easily see it 
expanding from the sales team to the marketing and finance teams, or ther other way round, if it takes 
some of the pain away.

Revenue $102-103m (+34.5%) <- so slowdown in growth, but they stress this is conservative in the Q&A.
Continued investment in innovation and sales
NRR >120%

Q&A from earnings call:

Q: Execution challenges in US?
A: They were focused on putting in place ways to id customers with largest propensity to buy. Key was 
to have this in place at beginning of the year.
Leadership changes in the US -> a relatively large number of new hires and some were new to Anaplan and 
that caused some disruption in Q4.

Q: Billings growth to rebound after slump in Q4?
A: Don’t forecast billings, but new focus should give good amount of opportunity. When things are 
growing so fast, it can cause a little disruption; but did not lose any opportunities.

Q: Why no backfilling of Mark’s role?
A: "I feel very comfortable and very happy" with talent in sales org. Asia Pac performed very well with 
strong leader. Europe doing very well with very strong leader: largest customer expand there. Americas: 
strong leader and supplemented the leadership team - they are adding 14 new regional account teams 
reporting into these three leaders. Didn’t feel we needed the additional layer (i.e. Mark). "I feel 
good about it." Sales kick-off 1st Feb: had over 200 partners at this event.

Q: Billings growth given Covid-19?
A: Will always be very prudent on forward guidance.

Q: All the changes in sales, how are you thinking about new hires?
A: All changes in the sales org related to the refinement of the GTM is now done - done in early Feb.

Q: Why make all of these sales org changes in Q4 and not Q1?
A: Refinement of GTM, important to get in place at beginning of year, as you expand you need to add when you can.

Q: Was there a misread of what was going on with customers in Q4, was handover not good? 
A: Key thing is there was no loss of customers, secondly in the competitive landscape nothing has 
changed and Anaplan still very well positioned, transformation is accelerating, partner ecosystem is 
strong. "I feel good about the refinement."

Forbes write-up:

Q4 IR release:

My take:

If there is more and faster digital transformation, PLAN should win.
COVID-19 is accelerating this type of transformation in large organisations.
I find the answers about what they did to fix the sales team and org convincing; market may have overreacted.
Valuation is attractive (P/S of 15.6 ttm).

-> I believe PLAN will surprise on the upside when they report Q1 on 26 May and will do well long-term. I’ve added a 8% position today.

Hope this is a good start for further analysis,