The Covid-19 tripod: EVBG, TDOC, ZM

Investment Analysis Clubs Saul’s Investing Discussions
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I’ve been looking for the companies that benefit the most, and most directly, from the covid-19 pandemic. A month or so ago I identified Zoom and Teladoc and I was looking for another one. I had seen Everbridge but I could not figure out how they could become a key player, how they would grow and monetize their mission statement. Literally 20-20 has cleared it up.

I’ve been an amateur student of the Science of Complexity for over 20 years. It was made clear early on that it would govern our lives as much as bronze, iron, agriculture, steam, electricity, and other inventions had dominated earlier eras. One idea stuck powerfully in my mind, that as the number of nodes increased, so would increase the instability of the whole network, an effect graphically demonstrated by Stuart Kauffman, one of my favorite Complexity scientists. If covid-19 is not as close to chaos as we have ever come, I don’t know what is. Zoom and Teladoc are easy to understand in just two words: “contactless communications.” Everbridge is much more interesting!

If the greatest risk of a network is the increasing instability – the chaos induced by the growing number of nodes, the mission of Everbridge is to bring order to all those nodes! Everbridge collects information from all the nodes, makes sense of them, and imparts order to the nodes keeping the growing network from self destruction by chaos.

If you don’t want your organization to self destruct, you have to use Everbridge.

You think 7 billion people create a chaotic network? How about 75 billion IoT devices?

Everbridge Unveils Critical Event Management (CEM) for the Internet of Things (IoT) Supported by Two Technology Acquisitions

New IoT capabilities automate process of mitigating a wide variety of critical events such as coronavirus (COVID-19) to protect people, operations and supply chain.

With the number of IoT devices expected to approach 75 billion by 2025, the Everbridge CEM platform enables organizations to utilize vast amounts of electronic data, including IoT sensors, to digitally transform how they manage the safety and security of their employees, customers, patients, first responders, residents, and visitors, as well as the resiliency of their operations and supply chain. CEM for IoT extends the number of use cases for the Everbridge platform within the broader critical event management market, complementing the company’s existing offerings for supply chain and wearable devices.

Companies, governments and healthcare organizations utilize CEM to mitigate risks from coronavirus with several million COVID-19 related communications deployed by Everbridge in recent weeks. The expansion of CEM for IoT enhances coronavirus-related use cases to better protect people, operations, supply chain and brand. For example, the Everbridge ecosystem supports over 1,500 healthcare entities including the top pharmaceutical, biomedical and medical device and manufacturing companies, as well as the largest healthcare systems (overseeing more than 25 percent of all hospital beds in the U.S.), managed care organizations, pharmacies, and statewide health alert networks (HANs), including the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH). CEM for IoT improves the ability to coordinate first responders and other critical healthcare resources such as intensive care unit (ICU) beds, respirators, expert medical staff, etc., based on real-time data on the broader impact of COVID-19.

https://www.everbridge.com/newsroom/article/everbridge-unvei…

This is the reason to add EVBG to the covid-19 investing tripod. It’s the leader of the field they pioneered and at the very heart of network complexity. None of the other SaaS offering is as universal.

Denny Schlesinger

Fool wrciii wrote:

I trimmed my position today because of its size in my portfolio, my sense that a lot of the growth is priced into the stock now, and management mentioned the word “prudent” several times when discussing 2020 guidance.

If my vision is not blurred, Everbridge is still at the staring gate…

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Those three stocks, along with Docu have been on a roll for me this year.
I wouldn’t necessarily add Docu as the fourth pillar (the Covid-19 chair?) but without their electronic signature and document cloud it’s hard to understand how any large contracts are being signed.
Dean referred to a large deal which Alteryx signed remotely and required 16 signatories all in different locations and working remotely, which I don’t think would be possible without Docusign.
Cheers, PB.

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I wouldn’t necessarily add Docu as the fourth pillar (the Covid-19 chair?) but without their electronic signature and document cloud it’s hard to understand how any large contracts are being signed.
Dean referred to a large deal which Alteryx signed remotely and required 16 signatories all in different locations and working remotely, which I don’t think would be possible without Docusign.

Docusign (DOCU) is a fine company. The distinction is that it is impacted less by covid-19 than ZM and EVBG. In the example you cite, the 16 signatories would have been in different locations with or without covid-19. On the other hand, being forced to work and play remotely with Zoom, and the need to be notified by Everbridge are much more covid-19 consequences. In other words, covid-19 is a stronger driver of ZM and EVBG than of DOCU.

Denny Schlesinger

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After the flurry of posts about yesterday’s initial meltdown I though it might be a good idea to update The Covid-19 tripod. These three positions were hit very hard (ZM closed the 150 gap) but they recovered and Everbridge even came out ahead. Where were they at the end of the day?


**Ticker  Buy Date       Buy      Last   Change** 
ZM      02/24/20    107.85    161.97    50.2%
TDOC    02/26/20    118.28    162.64    37.5%
EVBG    03/16/20    107.51    138.34    28.7%

One must learn to trust oneself. Why did you buy the stock? Did the story change? If the story is still true there is no reason to panic.

Simply said, covid-19 is the catalyst for a paradigm shift that started decades ago – online or remote living. This new mode of living is not going to stop or revert, it will continue to develop. If this is true and if the above mentioned companies have not screwed up, there is no reason to panic.

A lot of newbies ask “which stock should I buy?” If you didn’t have a reason for buying except you got a tip from an “expert,” when the dip comes, and it will, how will you answer the question “Why did I buy?” You won’t have a story to rely on, you won’t have a reasoned motive to hold. All the ingredients for panic are now in place, the stock is crashing and you don’t know why you own the stock. Let’s play it safe. Sell!!!

Denny Schlesinger

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My Covid-19 tripod is DOCU, EVBG, and RNG. However, I bought them well before Covid-19. As the saying goes, “It’s better to be right for the wrong reasons than wrong for the right reasons.”

Thank you for reminding me about TDOC. It looks like TDOC is here to stay. Therefore. it goes on my watch/research list today.

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Thank you for reminding me about TDOC. It looks like TDOC is here to stay. Therefore. it goes on my watch/research list today.

My pleasure but why no Zoom (ZM)? It’s the grand daddy of covid-19.

Denny Schlesinger

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I am somewhat embarrassed to say that I have never used Zoom. Had I used Zoom I might overcome my valuation concerns. Morningstar shows ZM’s TTM P/S as 79x today.

I have a significant position in RNG. As you probably know, RNG and ZM are partners. The partnership may not last because RNG has introduced a product to compete with ZM. This concerns me because from what I have read, ZM has a superior product.

And to be honest, an analyst I follow has had Sell rating on ZM since July 2019. Here is here a snippet about what she said yesterday: “Goldman Sachs analyst Heather Bellini raised the price target on Zoom Video (NASDAQ: ZM) to $154.00 (from $90.00) while maintaining a Sell rating.” She keeps the Sell rating but dramatically ups her price target. Where have I seen that before?

In short, I missed on ZM and hit on RNG. So it goes.

FWIW, I’m looking to add more EVBG soon.