Smartsheets SMAR

On a day when my portfolio is down a whole lot, largely due to Alteryx, I updated some numbers on my stock valuation spreadsheet and surprisingly, SMAR jumped out as potentially worth an investment right now.

Take a look at these three companies, no names for now. Which one seems the most worthy of an investment?

  Rev-last12mos  GrossMargin  Last 4 q's RevGrowth  LastQ Net Loss  Market Cap
#1 $391 million	   78%	        53%,48%,36%,40%	    -$19 million     $16.4 B
#2 $300 million	   78%	        53%,53%,51%,52%	    -$27 million      $5.0 B
#3 $246 million	   60%	        35%,44%,38%,62%	    -$14 million      $8.1 B

Similar revenue, relatively similar growth rates over the past year, similar net losses, one with lower margins than the other two, big difference in market caps.

Now what if I told the three companies were Fastly, Zscaler, and Smartsheets, could you identify them?

Most of us would know ZS has grown to a high valuation this year, so yes, #1 is ZS, #2 is SMAR, and #3 is FSLY

I found it interesting that they are all in the same ballpark in terms of last 12 months revenue and operating/net losses. ZS’s revenue is a little higher, but it’s growth has been slower, yet it is rewarded with a much higher market cap. I believe ZS has built out a huge capital infrastructure, so I’m guessing that is why they are valued so much higher, as that is expected to benefit them over the longer term future to drive business?

But FSLY has much lower GM’s, lower revenue today, yet is valued 60% higher than SMAR. It was close to 80% higher (nearly double the market cap of SMAR) before today’s FSLY drop, so it stood out even more yesterday when I first looked at the numbers.

Now I suppose that is warranted since FSLY’s growth is accelerating, and SMAR is likely to only report growth around 40% next quarter, but still, it makes me want to think about putting some money back into Smartsheets again.

I’m not sure if anyone else is still following SMAR, but I would love to hear what others think. I only pulled this together quickly from their latest financials, but haven’t looked back at recent earnings calls etc.

For the record, even after doing this analysis, I did buy my first shares of FSLY today at around $77, although I have not gotten back into SMAR. Part of that was due to Fastly’s acceleration and likely continued tailwinds, part of it is just because I know it will be better followed on this board.

Anyway, I was surprised just how alluring SMAR looks right now. I think I said in my year end writeup in December that SMAR is a company that I might most regret not owning more of in the future. It’s staring at me right now saying “buy me” but I can’t quite bring myself to pull the trigger.

Curious if anyone else has strong feelings one way or the other.



I believe Bert liked Smartsheets for the company and the valuation entry opportunity. He had a really good write up dissecting last Q’s numbers.
I also hold Mekong and added a little during the crisis.


“Similar revenue, relatively similar growth rates over the past year, similar net losses, one with lower margins than the other two, big difference in market caps.”

I believe, a big part of market cap is about realistic TAM and how much of a piece the company can take. If you look at your three examples, I would venture a guess that SMAR’s TAM is the lowest and they also have the fiercest competition. That is why SHOP’s market is so high relative to their currently revenue and growth.


interesting analysis…

I like SMAR and longer term bullish on it…

One thing I do worry about SMAR is where does it fit in enterprise customers’ priority of SW spending…

In the quarter when even DDOG is coming out and saying they show slowdown during Q2 due to optimization and AYX gets completely decimated, I think SMAR has some / high risk of under-delivering on top line…

I have a very tiny position… may add a little bit only because it is the best out there from valuation and long term, I believe it is as strong a story as any other here… but I do worry it can go down in the near term…