Ben’s Portfolio update end of January 2023

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Ben’s Portfolio update end of January 2023

Returns: 










Portfolio







2020
63.6%
(Since May 12, 2020)




2021
13.1%





2022
-60.7%





2023
YTD
Month




Jan
8.3%
8.3%

These are my current positions: 










Jan 2023
Dec 2022






Snowflake
20.6%
20.5%




Datadog
16.3%
17.4%




Cloudflare
14.6%
13.5%











Zscaler
11.9%
11.6%




Crowdstrike
10.3%
11.1%




SentinelOne
8.0%
8.3%











Nvidia
8.0%
6.5%




Monday
5.9%
6.0%




Enphase
2.6%
3.3%




TradeDesk
2.0%
1.9%

Expectations for upcoming earnings

In the following I summarize my expectations for the companies that are due to report this earnings season. The goal of this exercise is to come up with reasonable earnings expectations. The goal here is not to be absolutely accurate, but to be able to identify when a company surprises in either a good or a bad way. That way it will be easier for me to identify if a change in conviction level is warranted. Also, just because a company exceeds or performs below my expectation with a single metric, that doesn’t necessarily mean my conviction has to change. Really, what this exercise does is it helps me to think about my companies holistically. Therefore, I think it is valuable to come up with these expectations before they report as it will help me to keep the companies (and myself) accountable and minimize any cognitive bias once the results are out.

Snowflake:

  • Reporting Fiscal Q4 2023 around 3/1/23.
  • Product revenue expectation: $560M (7% QoQ, 56% YoY), assuming same 4% beat as last Q.
  • Q1 new product revenue guide: $599M (7% QoQ, 52% YoY) which I would interpret as $616M (10% QoQ, 56% YoY) and hoping for some QoQ re-acceleration.
  • I would like to see some QoQ Operating Income margin improvement.
  • I would like to see >1M customer QoQ growth above 15%.
  • I would like to see at least 4.1B in RPO.
  • Detailed thoughts: Ben’s Portfolio update end of December 2022

Datadog:

  • Reporting Fiscal Q4 2022 on 2/16/23 before the market opens.
  • Revenue expectation: $474M (8.5% QoQ, 45% YoY), assuming same 6% beat as last Q.
  • Q1 new revenue guide: $493M (4% QoQ, 36% YoY) which I would interpret as $526M (11% QoQ, 45% YoY) assuming a similar re-acceleration as post-covid.
  • I would like to see 20ish % FCF margin.
  • I would like to see no large customer QoQ deceleration.
  • I would like to see profitability margins around 20%.
  • Detailed thoughts: Ben’s Portfolio update end of November 2022

Cloudflare:

  • Reporting Fiscal Q4 2022 on 2/9/23.
  • Revenue expectation: $277M (9% QoQ, 43% YoY), assuming 1% beat as absolute bottom.
  • Q1 new revenue guide: $296M (7% QoQ, 40% YoY) which I would interpret as $302M (9% QoQ, 42% YoY) expecting roughly the same QoQ growth as previous Q.
  • With only 1% revenue beat, I would really like to see that profitability margins continue to improve.
  • Positive FCF is a must.
  • Detailed thoughts: Ben’s Portfolio update end of November 2022

Zscaler:

  • Reporting Fiscal Q2 2023 around 2/23/23.
  • Revenue expectation: $383M (7.5% QoQ, 50% YoY), assuming a 4.5% beat as in last two Qs.
  • Revenue expectation from billings model: $386M (8.5% QoQ, 51% YoY).
  • Q3 new revenue guide: $402M (5% QoQ, 40% YoY) which I would interpret as $421M (10% QoQ, 47% YoY) expectation from billings model.
  • I would like to see ~$527M in billings.
  • I would like to see >~7% large customer growth.
  • I would like to see >12% FCF margin.
  • I would like to see 12% Operating income margin.
  • Detailed thoughts: Ben’s Portfolio update end of December 2022

Crowdstrike:

  • Reporting Fiscal Q4 2023 around 3/8/23.
  • Revenue expectation: $630M (8.5% QoQ, 46% YoY), assuming a 0.8% beat as an absolute bottom (on which I should probably reduce my position size).
  • Q1 new revenue guide: $674M (7% QoQ, 38% YoY) which I would interpret as $693M (10% QoQ, 42% YoY), minimum I’d like to see ad my current position size.
  • I would like to see similar profit margins as last Q.
  • I would like to see reaccelerating customer growth (QoQ).
  • Detailed thoughts: Ben’s Portfolio update end of December 2022

SentinelOne:

Monday:

  • Reporting Fiscal Q4 2022 on 2/13/23 before the market open.
  • Revenue expectation: $148M (8% QoQ, 54% YoY), assuming same 5% beat as last Q.
  • Q1 new revenue guide: $155M (5% QoQ, 44% YoY) which I would interpret as $163M (10% QoQ, 51% YoY), hoping for a modest QoQ re-acceleration.
  • I would like to see continued, significant improved leverage and FCF margin.
  • I would like to see large customer growth re-accelerate to around 20% QoQ.
  • Detailed thoughts: Ben’s Portfolio update end of November 2022

Enphase Energy:

  • Reporting Fiscal Q4 2022 on 2/7/23.
  • Revenue expectation: $718M (13% QoQ, 74% YoY), assuming a 3% beat.
  • Q1 new revenue guide: $747M (4% QoQ, 69% YoY) which I would interpret as $768M (7% QoQ, 74% YoY), just a guess.
  • I would like to see similar or slightly improved margins in comparison to last Q.
  • I would like to hear about supply chain improvements.
  • I would like to hear good news from new manufacturing plants.
  • I would like to hear an update on government incentives / taxation.
  • Detailed thoughts: Ben’s Portfolio update end of October 2022

Wrapping it up

The next two months will be again action packed with reports. I think my revenue growth expectations are significantly below where they were a year ago but I believe that the main reason is due to macro. So overall, I hope to see and hear about improving macro headwinds from our companies while they continue to demonstrate that they are the best of the best in what they do.

Thanks for reading and have a great February everyone!

Past recaps

July 2022: Ben’s Portfolio end of July 2022 - Saul’s Investing Discussions - Motley Fool Community

August 2022: Ben’s Portfolio end of August 2022 - Saul’s Investing Discussions - Motley Fool Community

September 2022: Ben’s Portfolio update end of September 2022

October 2022: Ben’s Portfolio update end of October 2022

November 2022: Ben’s Portfolio update end of November 2022

December 2022: Ben’s Portfolio update end of December 2022

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