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Slack Technologies, Inc
(NYSE:WORK)
Slack Technologies, Inc

Slack Technologies, Inc. operates Slack, a business technology software platform in the United States and internationally. Its platform brings together people, applications, and data, as well as sells its offering under a software-as-a-service model. The company was formerly known as Tiny Speck, Inc. and changed its name to Slack Technologies, Inc. in 2014. Slack Technologies, Inc. was incorporated in 2009 and is headquartered in San Francisco, C...
Founded: 2009
IPO date: 2019-06-20
IPO price: $26
Full Time Employees: 2,545
CEO: Daniel Stewart Butterfield  (2009~)
Sector: Technology
Industry: Software-Application
Next Earnings Date: 2021-09-08
2020 SaaS review
By: ssmlee04 Community Lead :))   💬 98   
   on Jan 03, 2021

2020 is an interesting year for SaaS companies. Some of them went public and gained huge success in the stock market. Some of them continued their rally from 2016-2019 and have another great year. Some of them have greater success than the others because of their business models in the work-from-home environment. And there's a common thing for those SaaS companies, that is: those companies probably developed something people want.

The following is a list of the top 15 SaaS performers in our database in the last 250 days as of December 31, 2020. https://i.imgur.com/xL1w2F2.jpg

Some of the companies here are getting a lot of attention this year. Terminologies like Zoom Fatigue even appeared in the second quarter. It seems everyone was talking about Zoom at some point. And that's reasonable because Zoom is the clear winner in this video conferencing space. They keep your company operational by providing you a smooth video call user experience for your employees and your clients. There are literally companies built on top of Zoom calls that provide you remote journey experiences, and they do great because of Zoom and Covid.

https://i.imgur.com/KWx3Ea2.png

Cybersecurity is also something to worry about for companies in 2020. Intuitively, when companies are working remotely it would be harder for companies to safeguard their infrastructure. That's when companies like CrowdStrike or Zscalar or Okta come into play. Okta help companies manage their employees' access identities. Zscalar and CrowdStrike protect your web infrastructure using technologies to derive insights from your data and protect your infrastructure in real-time or near real-time.

Also when a lot of people are working remotely you'd expect Internet usage to go up. Cloudflare is a CDN company that help websites serve their requests fast. Fastly is also doing similar things in the video CDN space and helps companies like TikTok serve their videos. And as more people spend more time on their mobile devices those companies also do well. And to support those web requests you need companies like Twilio to send you SMS messages or phone calls, without Twilio you might not even able to login to your apps.

Also when people are staying at home people have more time to get creative. So maybe people start selling stuff on Shopify or Etsy or Pinterest or create websites on Wix. And at the same time, you have marketing companies like Facebook or TradeDesk or Digital Turbine to help you advertise your stuff on mobile devices. The success stories for those SaaS companies are inter-connected.

There are many other interesting SaaS companies that are not mentioned above. They are not in the top 15 maybe because they're not directly related to the stay-at-home trend, but that doesn't mean they're less interesting. As a software engineer, I have to use application monitoring services, database services, image compression and processing services, mailing services... and many others. This is what makes a modern software company functional. And as long as your company is growing you would continue to add and look for the best services for your company. And when more companies are becoming software companies I can imagine those SaaS companies to have a great future ahead.

A few things in common here for the companies on the list:

  • They grow REALLY fast. A lot of the companies on the list are growing 40-80% a year.
  • They all have really high gross profit margins.
  • They're traded at a very high valuation. A lot of them have a p/s ratio of 40-60.
  • The majority of them are losing money.
  • They don't pay dividends.

A possible explanation is that there are no clear winners in the space they're operating in, so they're doing whatever it takes to make sure they win in the long run. And of course that means they cannot afford to pay dividends. Also they're all traded at astronomical levels of valuations maybe because they have high profit margins, and the future for those companies are expected to be good.

Take DocuSign for example. They're one of the pioneers in e-signature. But e-signature is some sort of niche market. You may come up with another e-signature solution with a small team but by the time you have the solution in place you might already be spending millions achieving zero revenue while DocuSign might grow revenue another 40%. In the end there's just not enough market share for you to survive. So it would not be a good idea to copy DocuSign business model, this makes DocuSign (and all the SaaS companies) unique in a way.

If you look back at Amazon anytime in the past 20 years you'll see it's always traded at high multiples. It is still traded at high multiples today but would anyone complain that Amazon is too expensive? Probably not. Because now we know Amazon is dominating in any spaces they're operating in, we just couldn't see it 20 years ago. So maybe there's a correction between winning and being expensive and that's why all the cloud stocks are expensive because there's a chance all of them are dominating in their space in the next 5-10 years.

But, of course, being expensive does not mean the company would be successful eventually. But if you want to look for something good in the next 5-10 years there's a chance it's on the list but you just don't know it yet.

$ZS $DBX $ZUO $AYX $DOCU $SMAR $DOMO $SVMK $AVLR $TTD $PCOM $NOW $WDAY $PD $WORK $ZEN $TEAM $VEEV $CLDR $SHOP $FSLY $TWLO $ADBE $AAXN $CRM $OKTA $GOOG $DT $ZM $SPLK $WIX $COUP $MDLA $LPSN $APPN $EPAY $AKAM $APPS $FIVN $BL $PANW $PFPT $CRWD $DDOG $NET $HUBS $NEWR $APPF $RNG $ESTC $BILL $GDDY $DCT $ECOM $PLAN $SNOW $SUMO $FROG $ASAN $JAMF $ADSK


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Salesforce is in talks to buy Slack, deal could be announced next week
By: ssmlee04 Community Lead :))   💬 98   
   on Nov 25, 2020

https://www.cnbc.com/2020/11/25/slack-shares-jump-following-report-of-possible-salesforce-acquisition.html

prices up around 40% after the news. Shares of Salesforce down 5% today on the news but this might help streamline their workflows and be good for Salesforce in the long run. $CRM $WORK


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Trading Coronavirus
By: ssmlee04 Community Lead :))   💬 98   
   on Mar 01, 2020

There's a big news in the past few weeks - coronavirus.

News and videos are coming out from Wuhan everyday since end of January and things seem to be really bad. People are lining up in front of hospitals and the city is running out of hearses and body bags. People in neighboring countries are on high alert and wear masks wherever they go.

You can't take it for granted when a virus cause the entire city of Wuhan to lockdown. This means the virus is going to have bad impacts and I was convinced the virus would eventually hit Toronto, which is where I live. So maybe I have to prepare for an outbreak as well.

I went to Walmart and Shoppers around late Jan and I couldn't find the masks anywhere. They're all sold out. So it's unfortunate that I don't have too many masks left in my storage.

This also convinced me that buying facial masks manufacturer in a potential outbreak might be a good idea. Some of my friends mentioned $APT to me. It's a company that specializes in making facial masks and related medical devices. Their financials are also ok. It's a solid company with p/e ratio around 15 before the price breakout and even when it's up 50% - 100% the p/e ratio is still reasonable. if you have an outbreak you'd need to wear masks for many reasons.

I bought this around Jan 29 around 5.x.

APT is something I really don't understand. And everyday I was looking at APT to move sideways. And the big / ask spread is so big no one is trading it and the spread can get up to 2-3%. Also in the next 20 days I was convinced by world media that the outbreak is contained in China and is probably not gonna happen in the US so I sold out this position around Feb 12 around $5.

And a few days ago it jumped all of a sudden and within 3 days this is already trading around $40 USD. What I don't understand is how is it not moving at all in the past 20 days. Is it all the media is so manipulated that they don't tell you the truth? Or is it just lack of experience that I am not able to hold it a bit longer. Maybe it's a bit of both.

I am already away from $APT now but would like to observe how this one would play out during this coronavirus outbreak.

There also seem to be a few other coronavirus betting proxy during an outbreak. Zoom is one great example. It went up 30% in Feb. It's reasonable because when you have an outbreak and cannot go to work you'd use video conference tools like Zoom more than before. And according to them the number of users they acquired in the first 2 months in 2020 is greater than the total users they acquired in 2019. So you'd expect them to have a great year ahead.

Same thing for Netflix and Slack. If you cannot go out to work then you would spend a lot of time watching movies or chatting with your colleagues remotely. So chances are the services would benefit from a potential outbreak.

So there are safer investments like this during a potential market downturn compare to others. If you can protect your capital during a market crash like this than the chances of you being financially good would increase long term.

$ZM $NFLX $WORK


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February Pick: Slack
By: earningsfly lazy guy   💬 2   
   on Feb 16, 2020

Slack is a chat app that aims to help you and your teams work together.

Why do we think this company is worth paying attention to? We think Slack is fun and easy to use compared to many other existing chat apps. You can join communities and engage in topics that you're interested in. You can run daily stand-ups or project management tools to make your life easier. You can also add integrations like Giphy that make your work life more interesting.

But Slack is not the only company that offers chat apps to businesses. Microsoft also has a similar product called Teams. There are talks about Slack getting serious competition from Teams a few months ago. There is a chart showing Teams taking a much shorter time to achieve 13 million daily active users when Slack only has 10 million users.

https://i.imgur.com/WdC0l21.jpg

Source: The Verge

But as you can see in Q4 2019 the revenue growth is still at an astounding 59.7% and is up from 57.6% in Q3. Also if you look at the difference in Slack and Teams pricing you can see that for Slack the minimum paid plan is $6.67 USD per user per month, billed annually, and for Microsoft Teams it is $5 USD per user per month.

Does that mean Teams can take existing users away from Slack? We think the answer is no. It's hard to justify switching your collaboration app once you have all integrations and channels setup. It's simply not worthwhile doing so for most companies, considering how time-consuming it is to set up all the channels and integrations.

But maybe that's part of the reason why Slack's stock price dropped 50% since the IPO in 2019. But if you look at their revenue growth you would see they're still doing an exceptional job growing between 55 - 80% consistently in the past few quarters. And keep in mind their net dollar retention rate is around 130%. The good news is the stock price is up around 40% since the beginning of 2020 with a great technical setup, so we think the company has the potential to move much higher.

https://i.imgur.com/8G3C7rI.png

Disclaimer: I wrote this article myself, and it expresses my own opinions. This is not a stock recommendation but rather just expressing a view. We hope this can help you increase your probability of finding great companies in the stock market. Please do your own due diligence.


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Slack
By: ssmlee04 Community Lead :))   💬 98   
   on Feb 13, 2020

Slack showed a technical breakout two days ago. I got in early that day and was able to make a quick 10%. I was relatively convinced the company are still doing ok despite the Microsoft factor so I decided to hold it for a while. It’s a product used and loved by lots of people so it’s unlikely they would become the next Netscape.

What happened that day is there is a news saying they get their biggest client to date called IBM. And the market is happy about the news and drove the stock up 20% at once. It turns out the news is a fake news. What slack did is they just let the entire day went by without doing anything. And at the end of the market they just halt the stock and saying that is already priced in. And then the stock drops 8% ah.

I exited the position the next day on open. To me this is a joke because they could have done something during the 8 hours trading session but they didn’t. Maybe they enjoy the news so much that they don’t want to do something about it immediately.

Ceo is selling shares basically everyday since IPO. Maybe there’s something wrong with them.

$WORK


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Things that I regret in 2019
By: ssmlee04 Community Lead :))   💬 98   
   on Jan 04, 2020

I made a few mistakes that I think is worth mentioning in 2019. But hey it's a learning process maybe anyone can discuss and learn something.

$GH. They announced good results in their liquid biopsy tests. And their price went up from $40 to around $105 very quickly. And then it dropped back to $60. And then go to $110 area again before coming down to $60 area again. I am invested in this company since Feb and unfortunately I didn't sell at the highs. I even added a little when it dropped back from $110 to $80 so my total investment result for this is much less than 100%. After July they're kind of in the middle of the whole Softbank-WeWork fiasco and I am not sure if that negatively impacted their share price in any way. So even when they have one of the best earnings calls in the entire market, the price seemed to be priced-in or even inflated already. They still have a high EV/S ratio of about 30-60 now. And I think it's about 20x 2021 EV/S. So maybe I am just being too optimistic about this company that's all. Their buzz word is "Conquer cancer with data". So it seems too good to be true.

$WORK. Slack is one of the apps I have to use everyday at work. It's also quite popular here in North America so I thought it's a good long term investment. At the time of investment I didn't know Microsoft has a product called Teams that's competing with them. So when the news came out that Microsoft Teams daily active user surpassed theirs and the price dropped like 5-10% after the news. And I was totally unprepared. Luckily I don't have it anymore after the news. Also, the insiders are selling almost everyday. It's really laughable how you'd want to compete with Microsoft when your product is only a desktop app and does nothing really special.

$Z. I have been looking at Zillow for years. I was looking to invest in Z since the a year ago when they announced they're gonna enter the buy and sell housing market. And the story feels right because they have scale, also they're the go to app for you to view the listings nearby. Their competitor, Redfin, is also really good, but in my opinion they're just not as popular. Zillow revenue basically accelerated this year but the price seems to be not going anywhere. So I was counting on the technicals to drive down the price more so that I can buy this company. And surprisingly the price double-bottomed in October and immediately moved higher 50%. https://i.earningsfly.com/Z_estimate_img.png

$TSLA. Elon purchased another 20m worth of Tesla in May. And it dipped to around $180 area. I was waiting for it to drop more because even though it's relative obvious they're on track of becoming no.1 car companies in the world, their stocks are just lagging in the past few years. Also the bears are constantly talking about shorting Tesla so I was hoping for the price to drop more so that I can buy. In retrospect if you know a company is going to do well then maybe the best idea is to just buy and wait for it to move again whenever there's a chance.

There are many more smaller regrets that I'd like to share. But these are the more decisive ones. Maybe this is how you get punished in a bull market but who knows maybe this waiting pays off in a financial crisis. We'll see.


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Microsoft Teams hit 20m users in October, up from 13m in July
By: raspberry lazy guy   💬 31   
   on Nov 20, 2019

https://finance.yahoo.com/news/stockbeat-slack-slump-competition-microsoft-133500195.html

Are there still anyone holding Slack? Wonder if they would become the next Nescape and disappear. $WORK $MSFT


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What can you do with $100 in the stock market
By: ssmlee04 Community Lead :))   💬 98   
   on Oct 31, 2019

Oftentimes I hear about people asking: What can I invest with a small amount like $100? And then there would be people replying with: Hey, leave the money in your pocket, go buy a beer somewhere, or Save your time your money is too small to achieve anything. I was always puzzled about how wildly inaccurate and insincere those comments are, and hoped those money don't end up becoming beer money and disappear.

Generally speaking, your money becomes less valuable over time. There is a thing called time value of money, which measures the value of money at different times. And usually, the future value of money when discounted back to the present time would be less. For example, if you invest $100 in the rate of inflation in 1910 you would have approximately $2500 in the year 2010. That also means if you are hiding the money under your pillow over the past 100 years your purchasing power would decrease around 25 times to a measly $4.

https://i.imgur.com/Gy9i4Kz.png

Source: quickchart.io

There are many other factors that is causing your purchasing power to drop. But roughly speaking, if you want to get the same goods or services you would be paying 25 times more in 2010 than you would in 1910. (Bear in mind this is an approximation because you can get a plane ticket or a phone call much cheaper nowadays, but you are not getting the same quality of service). For a non-existent, simple publicly-traded company this means you have to pay 25 times more to hire an employee, 25 times more to purchase materials, and so is the 25 times increase in expenses and profits. And if you also assume the P/E ratio remains constant for this company then the stock price would increase about 25 times.

Ok, this company doesn't exist. Some of them disappear, while some others do well. But in general when money becomes smaller, the price has to go up.

Now let's look at some extreme cases in the stock market. You can use the calculator above to research companies that you like, but let's look at some big names that you might be familiar with.

Apple Inc:

If you had $100 of Apple Inc. on 2000-03-10 (Dot.com bubble peak) you would have $5555.75 today.
If you had $100 of Apple Inc. on 2002-09-24 (Dot.com bubble bottom) you would have $23858.21 today.
If you had $100 of Apple Inc. on 2007-10-09 (2007 Financial crisis peak) you would have $1040.28 today.
If you had $100 of Apple Inc. on 2009-03-09 (2009 Financial crisis bottom) you would have $2101.64 today.

Pets.com:
AIG:
Lehman Brothers:
Enron:

If you had $100 in any of these you would have $0 by now. This is sad.

Let's say you are such a terrible investor and invested $100 each in all 5 companies at the peak of the dot.com bubble, you would have $5555.75 today even if you have 4 companies disappeared in your portfolio. Or maybe you're a late bloomer that you invested $100 in all those companies at the peak of 2007 and have all other 4 companies go to 0 you would still have $1040 in the portfolio.

But is it possible to find Apple in 2000 or 2008? For a lot of people, the answer is yes. iPhone was released in 2007 and that is before the financial crisis. If you have talked to people then you might have a chance to find this company and invest in them during the financial crisis.

Peter Lynch once wrote in his book he found some of his best ideas when he was out with his family, traveling or talking with friends and associates. One day his wife told him how much she liked L'eggs pantyhose, a new product she'd just tried out. After looking into the company's prospects and liking what he saw, Lynch bought the Hanes Company, maker of L'eggs, and his fund investors realized a 30-fold appreciation in Hanes stock. A lot of times investing boils down to whether or not you talk to people and find something that people like. Sometimes investing might even be intuitive.

So what can you do with $100 in the stock market? The answer is probably a lot. You might be investing in something that gives you more financial flexibility later on. Or you might be really unfortunate and end up investing in something really bad but at least the worst case scenario is you don't get beers.


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Is it a bottom-price of Slack? I don't think so.
By: moodyzhan Senior Financial Consultant   💬 6   
   on Oct 24, 2019

$WORK drops down over its IPO price $26, I believe it is still overestimated though. And the growth rate of income is gradually slowing down, 110% in 2018 vs 82% in 2019 and, the expected growth rate is 51% to 52% in 2020. Being more specifically, new users are not growing as fast as before and the speed of increasing premium clients with over 100K annual payment is slowing down. Slack has 720 premium clients currently, which is less than 1% of its total users (total users with payments is around 100k). But the total number of premium users and free subscribers for the similar service that Slack provides has reached to 500K, which apparently Slack didn't account for a lot. If in this case, Slack hasn't been dominant the business communication platform, instead of as a 'back-up' option for most companies. I think that's a challenge for Slack right now.


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MSFT
By: ssmlee04 Community Lead :))   💬 98   
   on Aug 21, 2019

Great company, the feeling is the market cap would stay above 1T this time. Market downtrend doesn't seem to affect it much. It's a wonder how a company this large can still grow so fast. I was previously in $work and I was shocked to see Microsoft Teams overtake Slack in DAU in such a short period of time so I had to sell Slack. Also as a software developer you just cannot leave Github and Linkedin. You need to check Linkedin everyday and all your code is on Github. And all of a sudden it makes sense for them to roll out something like github Actions which is a CI/CD service and take a stab at the Ci/CD market. The acquisition of Github & Linkedin makes more sense to me now.

long $msft


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made a mistake
By: ssmlee04 Community Lead :))   💬 98   
   on Jul 19, 2019

Made a costly mistake on this one. It is one of the IPOs this year that drops below the opening price. There are reasons behind it just I am pretending not to see it. 2 days ago Microsoft announced they're entering the market with a service called Teams and it is bundled in office365. And within months they already have 13m DAU as opposed to Slack's 10m. This is the clear sign that Slack is not going anywhere on this valuation. It's a costly lesson for me.

https://www.theverge.com/2019/7/11/20689143/microsoft-teams-active-daily-users-stats-slack-competition


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