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.

Equity Bottom-Up

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Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.
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Summary: <a href="https://www.smartkarma.com/entities/guidewire-software-inc" target="_blank" data-smartkarma-citation="entities:15448:1" rel="noopener">Guidewire Software (GWRE US)</a>, the leading provider of core system software for the P&amp;C insurance industry is in the early stages of a SaaS business model transition. While the market is pricing in a smooth <a href="https://www.smartkarma.com/entities/adobe-systems-inc" target="_blank" data-smartkarma-citation="entities:8357:1" rel="noopener">Adobe Systems (ADBE US)</a> or <a href="https://www.smartkarma.com/entities/autodesk-inc" target="_blank" data-smartkarma-citation="entities:13211:1" rel="noopener">Autodesk Inc (ADSK US)</a> like transition, Guidewire will fail to deliver the expected “Adobe-like” rebound in revenue growth and profits due to a weak value proposition and inability to migrate much of its installed base. Our EPS estimates are ~25% below consensus. Despite the recent pullback on 1Q20 earnings, Guidewire still trades 10-11x price / forward sales, or ~25-30% above its historical 7-8x range. Put together, Guidewire could see as much as 50-60% downside from today’s ~$105.
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<li>Base Case PT: $80                      </li>
<li>Upside PT: $120                                    </li>
<li>Bear Case PT: $55</li>
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The Insight is meant to be used by investors as a road map to evaluate Guidewire’s  progress over the next few quarters. We start with a Best Working Thesis which reflects our initial conclusions from the case study. Key Questions positively answered would make us incrementally more bullish, while evidence of rising Thesis Threats may potentially puncture our view.


Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Summary: Guidewire Software (GWRE US), the leading provider of core system software for the P&amp;C insurance industry is in the early stages of a SaaS business model transition. While the market is pricing in a smooth Adobe Systems (ADBE US) or Autodesk Inc (ADSK US) like transition, Guidewire will fail to deliver the expected “Adobe-like” rebound in revenue growth and profits due to a weak value proposition and inability to migrate much of its installed base. Our EPS estimates are ~25% below consensus. Despite the recent pullback on 1Q20 earnings, Guidewire still trades 10-11x price / forward sales, or ~25-30% above its historical 7-8x range. Put together, Guidewire could see as much as 50-60% downside from today’s ~$105.

Base Case PT: $80                      
Upside PT: $120                                    
Bear Case PT: $55

The Insight is meant to be used by investors as a road map to evaluate Guidewire’s  progress over the next few quarters. We start with a Best Working Thesis which reflects our initial conclusions from the case study. Key Questions positively answered would make us incrementally more bullish, while evidence of rising Thesis Threats may potentially puncture our view.

Guidewire Software: Short This SaaS Transition I (Fundamentals)

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

On cue, outperformance last week and yesterday from cyclicals led the S&amp;P 500 to new all-time highs while defensive Sectors lagged. Additionally, weakness in the US dollar has allowed foreign equities to recover substantially, to the point where the major int’l ETFs (ACWX, EFA, and EEM) are on the cusp of bullish inflections topside downtrends. In today’s report outline our view of the U.S. equity market ad highlight attractive Groups and stocks within Health Care and Technology.

On cue, outperformance last week and yesterday from cyclicals led the S&amp;P 500 to new all-time highs while defensive Sectors lagged. Additionally, weakness in the US dollar has allowed foreign equities to recover substantially, to the point where the major int’l ETFs (ACWX, EFA, and EEM) are on the cusp of bullish inflections topside downtrends. In today’s report outline our view of the U.S. equity market ad highlight attractive Groups and stocks within Health Care and Technology.

U.S. Strategy: Sentiment Improving, Upgrading Manufacturing

United States

PTC Inc. develops and delivers technology solutions, comprised of software and services. The Company's technology is primarily used by discrete manufacturers to design, operate and maintain complex products. PTC's technology is also used to connect products to the Internet for purposes of capturing and analyzing information from them.

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PTC Inc (PTC US)

Guidewire Software: Short This SaaS Transition I (Fundamentals)

Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental...

Aaron Gabin

U.S. Strategy: Sentiment Improving, Upgrading Manufacturing

On cue, outperformance last week and yesterday from cyclicals led the S&P 500 to new all-time highs while defensive Sectors lagged....

Vermilion Research

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