It's helpful to me to have important SaaS statistics in one table so here's what I came up with:
Company Ticker Mcap Rev TTM Growth Op. mar EV/S Gwth+Mar
Zoom Video (ZM) $25.0 $0.331 119% 2% 76 121.00%
Zscaler (ZS) $10.0 $0.273 104% -11% 37 93.06%
Alteryx (AYX) $7.0 $0.279 82% -5% 25 76.81%
The Trade Desk (TTD) $10.0 $0.513 51% 17% 19 67.94%
Twilio (TWLO) $18.0 $0.754 71% -15% 24 56.43%
MongoDB (MDB) $8.6 $0.300 67% -34% 29 32.32%
Smartsheet (SMAR) $5.5 $0.198 60% -30% 28 30.24%
Okta (OKTA) $14.6 $0.441 53% -30% 33 23.46%
A few comments. The Gwth+Mar is a way of balancing a company's growth rate and operating margin. This was discussed in a recent Seeking Alpha article as "The Rule of 40". Anything over 40% or better is considered good.
OKTA represents a fairly large percentage of my holdings and I'm bothered by its low numbers. Anyone worried about OKTA?
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I’m not sure where you’re getting your growth rates but they don’t seem to be what’s currently going on. ZScaler has never grown 104% as a public company, and it’s possible your Alteryx is not considering ASC605 revenue to ASC606.
A lot of things have to be considered with this stuff, ie, which way is S&M expense as a percent of sales going in? I’m going to be honest when I started hearing commercials for OKTA on a sports radio channel in Phoenix, I really started wondering if they’re having to scramble for customers.
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OKTA represents a fairly large percentage of my holdings and I’m bothered by its low numbers. Anyone worried about OKTA? – MQ
While I appreciate the ongoing efforts to quantify the “key” metrics for various SAAS companies, its important to remember that “contrived” (no disrespect intended, just calling it as an idea, not a rule) metrics capture a very small amount of what makes any particular company special. And its far more than numbers. These are predominantly “story stocks” who…for good reasons… are growing very quickly and typically with high margins (somewhere).
Your analysis of the story may be far more important than the numbers. For me, its why I own OKTA and why I don’t own ZM. Because of my assessment of the “story” (my assessment of what is special and its sustainability).
Rob
Rule Breaker / Market Pass / Supernova Navigator Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
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12x (hope that’s how well your holdings increased TTM) I got those Zscaler numbers off macrotrends.net which says:
“Zscaler revenue for the twelve months ending April 30, 2019 was $0.273B, a 103.66% increase
year-over-year.”
https://www.macrotrends.net/stocks/charts/ZS/zscaler/revenue…
I’m not sure where they are getting those numbers at, but they’re wrong. ZScaler was growing arount 50% when it went public, the fastest growth quarter was like 2 quarters ago when it hit 71% growth, then back down to 65% last quarter.
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Hi Magellan,
You are doing some great work but in order to get the correct number its best to go to SEC.GOV. I never trust anyone else’s numbers.
Andy
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This ought to suffice: Directly from OKTA’s Investor webpage: “Revenue: Total revenue was $125.2 million, an increase of 50% year-over-year. Subscription revenue was $117.2 million, an increase of 52% year-over-year.”
https://investor.okta.com/news-releases/news-release-details…
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On Zscaler, Andy and 12k are right. I went to the SEC. Zscaler posts in a peculiar manner - at least to me. Here's what I got.
Condensed Consolidated Statements of Operations - USD ($)
3 Months Ended 9 Months Ended
$ in Thousands Apr. 30, 2019 Apr. 30, 2018 Apr. 30, 2019 Apr. 30, 2018
Revenue $79,128 $49,163 $216,728 $134,000
So it appears you need to add 9 months of 2019 to 1st 3 months of 2019 and then compare that sum to 2018.
MQ,
Please stop clicking “Table Data” and instead learn to embed spaced out tables via PRE html tag if you plan on posting tables. (Other embedded tags allowed are B for bold and I for italics).
See:
https://www.fool.com/community/advanced-features/#Styling
https://discussion.fool.com/how-to-post-a-table-15434210.aspx
This forum software is antiquated and clicking the unfortunate Table Data option makes the entire posts be under PRE tags. When you PRE on paragraphs of text it makes them unreadable if long, as users cannot scroll far enough right in the post’s web page, especially on mobile browsers. It is much better to embed them yourself and ONLY around tables.
Also 12x and BNH meant you need to research ALL your numbers not just ZS. Don’t trust summary numbers from financial sites.
-m
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Muji, fhanks for the tip. From now on, I will format as you suggest. For those having trouble reading what I wrote earlier, zoom out a little on your screen. Should work - does on my PC.
Also, I got that about just ZS. I believe the other numbers are fine.
Finally, suggest you be just a little bit gentler in your remarks. Please and thanks still go a long way in this world.
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Your analysis of the story may be far more important than the numbers. For me, its why I own OKTA and why I don’t own ZM. Because of my assessment of the “story” (my assessment of what is special and its sustainability).
Rob, you are tantalizing us! Why don’t you tell us what your assessment of the stories are! That would really be helpful!
Saul
5 Likes
I got those Zscaler numbers off macrotrends.net which says:
Magellan, never, but NEVER, get numbers you care about, or invest on the basis of, anywhere except from the company’s investor relations site and their past press releases. You don’t have a clue where macrotrends.net’s robo-computer got those numbers from.
Best,
Sau
6 Likes
By the way, Zscaler’s fiscal year ends in July, so this year they are missing one quarter. For the last four complete fiscal years their revenue was (in millions):
$54
$80
$126
$190
Rate of growth of revenue for the last three fiscal years was:
50%
57%
51%
Their revenue accelerated the last three quarters and was up:
63% Oct Q
74% Jan Q
79% Apr Q
That’s great, but nowhere near 100%. As I said before, just go to the company’s website and look at their press releases. Revenue is right there near the top always. Don’t waste your time with junk-based robo-computers.
Saul
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Saul,
I think you have a typo on those numbers. The 63,74,79 were actual revenue, not %.
The % revenue growth the last 3 quarters were:
59%
65%
61%
Thanks,
Jim
5 Likes
I think you have a typo on those numbers. The 63,74,79 were actual revenue, not %. The % revenue growth the last 3 quarters were:
59%
65%
61%
You are correct Jimbo, I miscopied from my tables. That puts them even a little further from 100%. I can’t imagine where that robo-computer got those numbers.
thanks,
Saul
1 Like