I no longer own it after seeing margins continuing to worsen last few Qs, but I’m still keeping it on the watch list… mostly out of curiosity about how enterprise spend will be affected over next few Qs for ‘enterprise tooling’ SaaS like this, not because of its execution (where the trends are not good). I’m guessing that this kind of software isn’t as vital as security and communications tools are right now. Where Smartsheet’s value lies is in VISION that its dashboards bring (that is the driving reason I’m in Datadog, after all), however, Smartsheets’ vision is more over the business operational side, e.g. developer productivity and project mgmt. That ultimately seems more expendable then software that gives you eyes on your infrastructure, like DDOG. Right now I am only looking for companies whose tools are INVALUABLE. Enterprises are sure to start trimming expenses (likely quickly, and ruthlessly) in order to build up their fortress and weather this storm.
Side Tangent: Thank you to Saul for the quick peek at your current shift in positions. I see you are compacting your portfolio, and I’m beginning to do the same; I only plan on focusing on those stocks that are technologically attractive right now AND that have been executing near flawlessly already.
Given all that, Smartsheets seems like an easy choice to jettison if you still hold.
SMAR - Q420
SSI take: https://softwarestackinvesting.com/smartsheet-smar-q4-2020-e…
Bear sold: https://discussion.fool.com/smar-q4-34441630.aspx
Lieberman sold: https://discussion.fool.com/i-sold-as-well-sold-most-my-shares-a…
CC transcript: https://www.fool.com/premium/coverage/earnings/call-transcri…
Revenue 78.5M +51%
- Sub Rev 71.1M +53%
Billings 101.5M +58%
Adj Op Loss 17.3M (was -8.5M)
… margin -22.0% (vs -16.4%)
… margin -4.6% (vs +1.3%)
5K 9070 +47%
50K 961 +116%
100K 350 +138%
ACV 3643 +48%
$NER 135% !!
My stance: I sold out of my small position after last Q, since margins are moving the wrong way, and growth is back to trickling down after a brief rise. Right now it all boils down to: how sticky is this company’s products? We’re about to find out over the next few Q! I am keeping this in my watch pile til then, but I’m expecting the continually lowering growth rates to finally hit 50%. Curtailed enterprise spend is likely to impact new deals, so possibly (and, IMHO, probably) even lower.