Turnaround AYX...not!

Nothing more enticing then hitting on that cheap under appreciated turnaround! Well yeah, maybe someday, but yet again not this day for AYX:


NVDA was a successful turnaround, but its problem was identifiable, cryptocurrency bust and over inventory. With Alteryx it is simply they failed to upgrade their platform too long, and when they started planning to move to the cloud their CEO’s biggest concern was not on client satisfaction but on not cannibalizing their server/client business…

My AYX holdings last year cost me some returns, but what a year it was in regard as I still got more than double on it that year as for some reason the shares boomed for some reason and I took advantage to get out near the top. Seems temporary pre-earnings optimism kicked in. Putting these profits into Livongo helped make up for it. I have yet to see a reason to think this will be a powerful turnaround. Maybe next year when the cloud product comes out. But until then, ick!



Tinker, ditto for Fastly…

Declining growth rates, gross margin and operating losses…

Sure, some day they may “turn things around”, but the opportunity costs of holding could hold down your portfolio performance…

Down big in afterhours…

8/4/2021 Earnings out for Fastly

Top-line growth of 14% year-over-year with revenue of $85 million, net of a $1.2
million deferred revenue write-down related to purchase accounting adjustments
from the Signal Sciences acquisition
GAAP gross margin of 52.6%, down from 60.2% in Q2 2020; non-GAAP gross
margin2 of 57.6%, which excludes stock-based compensation and amortization of
acquired intangible assets, down from 61.7% in Q2 2020
GAAP operating loss of $57 million, compared to GAAP operating loss of $14 million
for Q2 2020; non-GAAP operating loss2 of $18 million, which excludes stock-based
compensation, amortization of acquired intangible assets and acquisition-related
costs, compared to non-GAAP operating income2 of $2 million for Q2 2020
GAAP basic and diluted net loss per share of $0.51, compared to GAAP basic and
diluted net loss per share of $0.14 for Q2 2020; non-GAAP basic and diluted net
loss per share2 of $0.15, compared to non-GAAP basic and diluted net income per
share2 of $0.02 for Q2 2020
Capital expenditures3 of $5 million, or 5% of revenue


The lesson learned from both Alteryx and Fastly:

A good technical story and a “roadmap” that sounds better than the roadmap of a competitor isn’t enough for a large investment. The business has to be visibly succeeding when you put down your money as evidenced by sales growth, margin improvement and all the other goodies that Saul et al harp on. That success jacks the price and makes it more expensive than you want, but next years reports will reward you for having bought this year.