The last two weeks have seen an uncharacteristically high amount of management selling. Vecima quietly exited from its AirIQ fleet management holdings, and some other surprising selling (and a little buying) from some high flying stocks. AcuityAds ($AT.TO) director Igal Mayer exercised 25,000 options set to expire but chose not to sell the resulting shares despite the possibility of the shares netting him $35,000+. There does not appear to be any minimum share requirements for board members
Cloud Commerce Enablement
18 posts
Perspective on Technology – August 11, 2020 Lightspeed’s ($LSPD.TO) share price is up 16% (TSX Composite up 3%) since Tuesday, July 28. Fiscal Q1 (June 2020) revenue and headline EBITDA was better than we expected, but there are clear data points that have us continuing to believe $LSPD.TO does not deserve to be trading at a $SHOP-like SaaS multiple. Record Locations Yet Record Low Deferred Revenue “In the three months ended June 30, 2020, we engaged in several customer-focused initiatives, such as subscription discounts and deferred payment arrangements, aimed at supporting our customers during the COVID-19 Pandemic.” We understand the mix towards monthly/annual payment plans vs. multi-year, but that […]
The speed at which Shopify (SHOP.NYSE) saw a 119% price increase off the back of withdrawing their 2020 financial guidance on April 1st took us by surprise. While a short-term pullback is possible, Shopify is taking advantage of two material catalysts with clear timelines, which we discuss in our 52-slide Powerpoint Executive Summary pitch. At the same time, valuation at US$750 per share requires investors to move away from a relative SaaS valuation thesis they may have had a few months ago and be comfortable with Shopify spending to grow into having a 2.8% market share of online small businesses […]
We have published an update on Lightspeed post their fiscal Q3 results and Q4 guidance. Disappointing Fiscal Q3 2020 Results and Q4 2020 Guidance Misleading statements surrounding Growth continue Increasingly expensive and unprofitable acquisitions with little synergies and no path to improving margins Insider selling and treasury shares issuance are increasing the market float at the wrong time Reasons for the removal of Cash Flows from Operations guidance for the 2nd time is questionable Updated LTV vs. GC metrics (adjusting for the Gastrofix acquisition) Slowing Organic Growth will cause investors to push towards Profitability, yet consistent 10% EBITDA margins appear […]
After a 3-month planned break, Perspectec has re-started. Our team has been busy finalizing some changes to our portfolio. As of November 29, 2019 prior to the market open we are: – We are upgrading Lightspeed (LSPD.TO) to a HOLD from a SELL. We believe Perspectec’s research was a primary driver in moving the stock price lower. – We are upgrading Aurora Cannabis (ACB.TO) to a HOLD from a SELL. We believe Perspectec’s research was a primary driver in moving the stock price lower. – We are moving Shopify (SHOP) from our Focused Portfolio to our General Portfolio. We have […]
Calling institutional investors on a sunny Friday afternoon before the Labo(u)r Day long weekend proved mostly fruitless for myself and Perspectec’s associates in Toronto. However, I’ve received a few inbound questions and points on our 55-slide presentation. As a result, we have updated and slightly re-ordered our Lightspeed investor deck while adding an additional five slides (39, 42, 48, 50, 51). The primary questions via email were around valuation, the math, and logic behind it. As a result, we have added additional math for both Shopify and Lightspeed’s as well as some logic to using LTV/GC as a multiplier to […]
We have updated our Lightspeed POS Inc. (LSPD.TO) presentation, updating our thesis to include further details on our segment forecasts and valuation. Lightspeed (LSPD.TO) August 29, 2019, Institutional Investor SELL Pitch – Perspectec We are making this presentation public for marketing purposes. Institutional Equity Research subscribers had access to an earlier version of this presentation on August 13, 2019. We believe investors holding LSPD.TO should sell their shares. Our investment thesis is that: There are material headwinds Lightspeed’s growth strategy Lightspeed’s Customer Growth has (and will) come almost entirely from acquired platforms Organic customer location acquisition costs are high and […]
We have launched coverage on Lightspeed POS Inc. (LSPD.TO) with a SELL rating and a price target of C$30. We use lifetime value-added (LTV added) as a base metric gathered through online surveys. In addition, we conducted 22 in-person interviews with retail stores and restaurants across Toronto to get a better sense of customer satisfaction with their product relative to competitors. These methods were used in conjunction with Lightspeed’s gross margin dollar growth relative to its public peer group to come to a fair value for Lightspeed. On a stand-alone basis, Lightspeed’s lifetime value-added divided by its customer growth costs […]
We have completed a survey of 600 respondents. The purpose of the survey was to provide churn, penetration and awareness rates for Square (SQ-NYSE). According to our estimates, Square has strong subscriber metrics for its core retail product solutions. The churn rate we obtained helps us compare the company on a Subscriber as a Service (SaaS) basis versus its public peer group. While Square was rightfully boastful about a 3- to 4-quarter payback period on sales and marketing investments in its Q2 shareholder letter and conference call, the lack of providing a net dollar retention rate or churn rate remains […]
We have completed a survey of 400 respondents. The purpose of the survey was to provide churn, penetration and awareness rates for Wix (WIX-NASDAQ). Wix releases metrics such as end-of-period premium subscribers and average annual revenue that helps us value the company on a Subscriber as a Service (SaaS) basis. The customer churn rate that we calculate from the survey results is a key statistic necessary to properly value Wix on a relative SaaS valuation, but that is not released by Wix. The details of the survey are below. The description states all ages, but involves only users over 18 […]
We have updated our coverage list in order to better match our research to interest from investors. We now track the following equities in the technology space: 1-800-Flowers.com FLWS 2U TWOU 3D Systems DDD 8×8 EGHT ACI Worldwide ACIW Activision Blizzard ATVI AcuityAds ACUIF Adobe ADBE Alarm.com ALRM Alphabet GOOGL Altair Engineering ALTR Alteryx AYX Amazon.com AMZN Anaplan PLAN Ansys ANSS AppFolio APPF Apple AAPL Atlassian TEAM Appian APPN AutoDesk ADSK Automatic Data Processing ADP Avalara AVLR Bandwidth BAND Benefitfocus BNFT Black Knight BKI Blackbaud BLKB Blackberry BB Blackline Safety BLKLF Bottomline EPAY Box BOX Cadence Design Systems CDNS Carbon […]
We have launched coverage of 14 additional enterprise software companies. Our models use a combination of SaaS metrics and non-GAAP financials to predict the current stock price. The relationship with our Enterprise focused model and the current stock prices (adjusted r-square) is 0.87 and for companies with an SMB/Entrepreneur focus our model has an adjusted r-square of 0.68. The performance of these stocks will be tracked in the Perspectec General Portfolio. In addition, we are moving Salesforce.com (CRM) from our Focused Portfolio to our General.Portfolio, due to a change in associate coverage. With this launch, we have published our Enterprise […]
We have updated our Shopify (SHOP-NYSE) marketing package which includes our survey results as well as our Q2 and annual forecasts. Our updated 23 slide Shopify pitch is attached.
We have created and updated our Mid-Sized, Slow Growth (SMB Focused) SaaS Comps table while launching coverage of ZEN in our Perspectec General Portfolio. Our target prices are based on a multiple regression model with a multiple r-squared of over 0.65 and r-squared of 0.90. We expect to improve this model moving forward. We do not use targets for Hubspot, RingCentral or Wix at the moment as we believe there are more accurate methods that can be a driver to their stock prices. We believe these metrics are reasonable in the absence of earnings due to the higher likelihood of these […]