I sold my NET after the earnings pop last Q because I just could not understand the enthusiasm. The impression I get is that investors are charmed by Prince and his optimism, but the numbers don’t back up the story he tells. Rev growth was 32% last quarter, so not much different than this one, I guess I’m not seeing how Q4 was outstanding but Q1 is mixed, unless you’re looking at the price reaction. When I asked the board for its opinion, I thought Raylight had some pretty good responses: Help me understand this reaction to NET earnings - #15 by Raylight - basically the argument is that we won’t know until more time has passed (which by the way, isn’t that convenient for Prince?) because the revenue is suppose to be durable, instead of hypergrowth
There is another explanation (that I’m subscribing to more and more as I follow NET over the years) - they are not able to monetize these flashy new products they are announcing because not enough customers will pay for them over the alternatives out there and everything is just narrative. Think about all of the products and releases they’ve had over the years. Has that translated to hyper growth revenue, when compared to its SAAS peers like CRWD, ZS, etc.? At this point of revenue base, all of those companies were growing much faster. NET deserves to be rated lower with its peers, not at a premium, and its current price doesn’t leave a whole lot of upside.