Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a> reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. </li>
<li>Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. </li>
<li>We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.</li>
</ul>



Elastic NV (ESTC US) reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. 
Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. 
We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.


Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<ul>
<li>Elastic just dramatically raised its revenue guidance for FY2025...implying a massive acceleration in revenue growth that the 18% move in the stock underplayed.</li>
<li>Dynatrace is a wildly profitable software company trading at a significant discount to its Rule of 40 metrics.</li>
<li>The overall observability space is red hot, unimpacted by macro factors and being overlooked by software investors.</li>
</ul>


Elastic just dramatically raised its revenue guidance for FY2025...implying a massive acceleration in revenue growth that the 18% move in the stock underplayed.
Dynatrace is a wildly profitable software company trading at a significant discount to its Rule of 40 metrics.
The overall observability space is red hot, unimpacted by macro factors and being overlooked by software investors.


Observability Is Not Just Datadog: Why Elastic and Dynatrace Are Great Longs

Algosun Global

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a>  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  </li>
<li>We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. </li>
<li>Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. </li>
</ul>



Elastic NV (ESTC US)  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  
We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. 
Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. 


Elastic: High-Profile Search Company With Attractive Fundamentals

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Datadog, Inc. exceeded analyst expectations in terms of revenue as well as earnings.</li><li>The revenue of $509 million exceeded the high end of its guidance range and increased by 25% year over year.</li><li>During Q2, customers kept checking prices and maximizing their use of the cloud and observability, especially some with higher spending levels.</li></ul>

Datadog, Inc. exceeded analyst expectations in terms of revenue as well as earnings.The revenue of $509 million exceeded the high end of its guidance range and increased by 25% year over year.During Q2, customers kept checking prices and maximizing their use of the cloud and observability, especially some with higher spending levels.

Datadog Inc.: Improved Log Management Capabilities & Other Major Developments

<ul>
<li>Following takeover rumors surrounding <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.</li>
<li>American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> share in an all-cash transaction.</li>
<li>The <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.</li>
</ul>


Following takeover rumors surrounding New Relic Inc (NEWR US) , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.
American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per New Relic Inc (NEWR US) share in an all-cash transaction.
The New Relic Inc (NEWR US) Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.


New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

United States

Datadog, Inc. provides software solutions. The Company offers cloud-based monitoring and analytics platform which integrates and automates infrastructure monitoring, application performance monitoring, and log management for real-time observability of customers. Datadog operates worldwide.

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Datadog (DDOG US)

Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

Elastic remains my top pick in the observability and search space, and I see the potential for revenue growth re-acceleration in 2024.

Andrei Zakharov

Observability Is Not Just Datadog: Why Elastic and Dynatrace Are Great Longs

Observability software stocks are being overlooked in the recent valuation downdraft. Elastic is our top pick...it had a massive revenue guidance...

Aaron Gabin

Elastic: High-Profile Search Company With Attractive Fundamentals

Elastic is a high-profile search technology company and we believe current valuations look attractive for long-term investors

Andrei Zakharov

Datadog Inc.: Improved Log Management Capabilities & Other Major Developments

Datadog, Inc. exceeded analyst expectations in terms of revenue as well as earnings. The revenue of $509 million exceeded the high end of its...

Baptista Research

New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...

Andrei Zakharov

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Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

Elastic remains my top pick in the observability and search space, and I see the potential for revenue growth re-acceleration in 2024.

Andrei Zakharov

Observability Is Not Just Datadog: Why Elastic and Dynatrace Are Great Longs

Observability software stocks are being overlooked in the recent valuation downdraft. Elastic is our top pick...it had a massive revenue guidance...

Aaron Gabin

Elastic: High-Profile Search Company With Attractive Fundamentals

Elastic is a high-profile search technology company and we believe current valuations look attractive for long-term investors

Andrei Zakharov

Datadog Inc.: Improved Log Management Capabilities & Other Major Developments

Datadog, Inc. exceeded analyst expectations in terms of revenue as well as earnings. The revenue of $509 million exceeded the high end of its...

Baptista Research

New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

​Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...

Andrei Zakharov

Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...