Next Year's Revenue

There was a fascinating thread this week that has had me thinking about the market caps of our companies. One of my thoughts was that price to next year’s revenue is a more relevant metric than price to last year’s revenue. So I did some digging:

                 Mkt Cap (Price)         TTM Revenue              Next Year Revenue Guidance
Zscaler           9 billion               243 million                375 million***
MongoDB           8 billion               267 million                371 million
ElasticSearch     6 billion               241 million                375 million***
Alteryx           5 billion               254 million                350 million

***Next Year Revenue Guidance for ZS and ESTC were educated guesses for ~55% growth. They’ll probably grow more than that, but the others will likely smash their guidance too.

Takeaway #1: ESTC and especially AYX look incredibly attractive. The TTM revenue and Next Year guidance for all these companies looks very close…hard for me to justify the $9b and $8b valuations for MDB and ZScaler (esp ZS). The market seems to be pricing in continued acceleration from ZS and continued triple-digit Atlas growth for MDB. I’m not sure those things are such a foregone conclusion. What do you think?

                 Mkt Cap (Price)         TTM Revenue              Next Year Revenue Guidance
Smartsheet        4 billion               178 million                257 million (310 million billings)
Sailpoint       2.5 billion               251 million                299 million

Takeaway #2: Even with less revenue, SMAR looks good at a $4b price tag. Growth is great, and if you take their 4b price divided by 310 next year billings, the ratio is ~13.

Takeaway #3: Even with slower growth, SAIL looks like a steal at just $2.5b. Their “Next year P/S” is ~8.

                 Mkt Cap (Price)         TTM Revenue              Next Year Revenue Guidance
Twilio           16 billion               650 million               1.08 billion

Takeaway #4: Twilio’s next year guidance is almost 1.1 billion (which they’ll smash), so roughly 3x or more that of any other company on this list. They practically seem like a bargain at a $16 billion market cap. I’ll predict they’ll actually hit at least 1.2b next year revenue, which makes their Next year P/S about 13.

Takeaway #5: For any of these companies to continue to be worth these ratios, they must continue to grow rapidly.



A lot depends on when you end your year. ZS for example will probably do at $300 million this year. Dreamer is yet another q out w $330 or $340 as current revs.


The company’s with non-calendar fiscal years are irritating and confusing. Just my opinion.

So Tinker is referring to my modeling which just slots their Qtrly revenues into CALENDAR years, so we can think about the stocks on equal terms relative to the next 6-12-18-24 months of revenue.

Bears numbers are all pretty close to what I have, and echoes a coincidence I noticed in that ZS/MDB/ESTC/AYX, now with ASC606 accounting, all are fairly close in TTM revenue size with 50%+ growth rates each. So it will be fun to watch, and hopefully informative, on how they do from here.

My current port here:…