A note about copyright, it does NOT protect ideas, only the expression of them. In other words, you may not reprint copyrighted material but there is nothing – except private contracts and company secrets – to prohibit people from discussing ideas learnt from any source.
Regarding my message board post in question and my expression of opinion on analysis made on a paid subscription service, I do not think the argument is whether or not I violated copyright, because I certainly did not, but whether or not I violated the rules of this message board, which I certainly did.
Guilty as charged; I hereby enter my guilty plea and I have accepted and endured my public flogging. I hope we can all now get back to the business of this board.
That’s really an interesting response by Bert. In his opinion, TWLO holds just as much appreciation potential as any other stock discussed here. On this board, people have sold TWLO because Flex is not taking off right away and Sendgrid is a slower growth company.
In other words, there are. Any who are very quick to cut a stock and give it no slack whatsoever. I have seen people sell MDB because of tougher comps in the quarters ahead.
Which is the right approach? In my opinion when you give such little slack you’re just as likely to sell a stock for unfounded fears. Right now everyone is jubilant and buying into AYX because of their 65% revenue growth. Coincidentally that is the exact same growth rate ZS hit two quarters ago which was their high point. Two quarters later short term (potentially a few quarters to permanent) issues came about that nobody saw coming. Good things can take everyone by surprise too and could easily be what happens to TWLO next quarter.
Right now everyone is jubilant and buying into AYX because of their 65% revenue growth. Coincidentally that is the exact same growth rate ZS hit two quarters ago which was their high point. Two quarters later short term (potentially a few quarters to permanent) issues came about that nobody saw coming. Good things can take everyone by surprise too and could easily be what happens to TWLO next quarter.
I definitely don’t see AYX continuing to accelerate revenue growth past 65%. I’ll be happy with revenue growth above 50%. There are huge differences between ZS then and AYX now. ZS had a very high valuation as compared to AYX currently selling at 15.3 times EV/sales. Also, AYX has better margins coming in consistently in the low 90s and have clear path to 30-35 FCF margins. There is no way ZS or TWLO will ever produce that percentage of cash flow. As we have seen from the analysis of CRM and TEAM, more mature software companies will be valued based on FCF. TWLO is losing money and is barely cash flow positive, so I think AYX is a much better investment right now.
I’ve been lurking around these threads for over one year - thinking that the group has a bit of genius investing going on, but now - not so much.
Please if that is how you feel, do not follow the board any longer and do not post little one liners that add zero to the discussion of stocks. I’m no board moderator, but if you have been lurking around here for a year, you should have realized this type of post is exactly the type of thing the board is trying to control, specifically posts that add no value whatsoever.
It is tricky to figure out what TWLO’s ultimate net margins or FCF will be at this point. Yes AYX with 91% GM should have good numbers. Yet ANET with 63% GM has 30% net margins! Can TWLO emulate ANET as it achieves scale? I don’t know. As of today TWLO sits at a P/S < 12 (2019 full year rev). If it is projected to grow 40% in 2020 it still seems reasonably valued and that is a reason why I have not fully sold out.
Quarterly Sales have slowed down from 16-20%/ Qtr3 to 7% and QTR 4 guidence 9%
Yet there costs to operate have gone up.
And … they are issuing stocks every quarter to raise capital.
Have they bought up any companies? Ah yes… Send-Grid.
Looks like they have issued shares to raise capital for that one as the long term debt has been paid dow n
Well that explains it then. Going to be some turbulent times ahead with this one I am afraid.
The 3 Biggest concerns for me:
The Insiders are selling off big time! Almost 120,000 Shares sold off since May this year.
Management are not doing a very good job managing the cashflows of this business.
They issued over 1B in Stock to boost revenue in Both Q1 and Q2 and still have not got any cash in the bank (Only $2M left after all that raising of cash.
Something has to drastically change or these guys are gonna crash and burn. They cannot just keep issuing stock to fill the coffers or the investors will just dump them hard… but there is hope, read below.
Just listened to the Q3 Conference call and … sounds like they are having teething issues with managing the scale growth they have experienced and are in the process of orders. Sounds like they are putting better systems in place as it caught them out and they have done a lot of time into looking into the Root Cause and the amount of collateral damage. Sounds like they have proactively issued approx $5Million in credits to what sounds like a hand full of customers.
All the questions from share holders about credit of that $5Million.
Others were concerned about deceleration of the market growth from +70% down to Mid 30%'s.
This was pretty much deflected, however they are definately on board building more app’s for mobile users and building a moat ahead of the pack, + they are growing a massive opportunity with in app advertising using the latest tech and algarithms and using AI to drive more taylored advertising to users.
3. They issued over 1B in Stock to boost revenue in Both Q1 and Q2 and still have not got any cash in the bank (Only $2M left after all that raising of cash.
I suppose you mean to improve cash flow. In his videos David Skok talks about this issue. The need for cash is justified when it is used to “buy” long term customers with a positive CAC::LTV ratio. He also says that often the bean counters don’t get it, that the mechanics of the SaaS business model is different from traditional business. I highly recommend watching David Skok explain SaaS on uTube.
americanray,
Your post will be deleted and if you insist on posting disruptive and unhelpful posts, ultimately you will be banned from posting on the board at all, or banned from all of Fooldom, as has occurred with several posters over the past six months. This board is not like other free boards you may have posted on such as those at Yahoo. This board has rules that are meant to be followed. Our purpose here is to all cooperate together to help us find, and analyze, and discuss high growth stocks. We work together. It is not a place to post little meaningless one or two liners to show how clever you are. And if you are unhappy with our discussions and our rules no one is making you stay here.
Saul