Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>We double down on New Relic stock as we see operational improvement and a clear path to non-GAAP profitability. A strong balance sheet will help to survive an economic downturn.</li>
<li>The company will repay 0.5% senior convertible notes in 2023 and is not interested in diluting existing shareholders. New Relic ended 2QFY23 with $833M in cash and cash equivalents.</li>
<li>American activist investor Jana Partners held ~3.2M New Relic shares as of Nov-22. <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>  shares underperformed in 2022, with shares down ~49%</li>
</ul>


We double down on New Relic stock as we see operational improvement and a clear path to non-GAAP profitability. A strong balance sheet will help to survive an economic downturn.
The company will repay 0.5% senior convertible notes in 2023 and is not interested in diluting existing shareholders. New Relic ended 2QFY23 with $833M in cash and cash equivalents.
American activist investor Jana Partners held ~3.2M New Relic shares as of Nov-22. New Relic Inc (NEWR US)  shares underperformed in 2022, with shares down ~49%


New Relic: $1B+ Revenue By FY24. Cost Discipline Will Drive Profitability

<ul>
<li>We maintain a bullish view on <a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a>  after the company reported stronger than expected 3QFY23 revenues and management updated its financial guidance for FY23. </li>
<li>We were impressed with subscription revenue growth, strong gross margins, and lower-than-expected operating loss. <a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a>  increased FY23 revenue guidance to <strong>$298M-$299M</strong>.</li>
<li>Our estimates suggest the company will cross the $300M ARR mark in 2022 and the stock currently trades at a discount to the 20%+ growth peer group.</li>
</ul>


We maintain a bullish view on Sumo Logic Inc (SUMO US)  after the company reported stronger than expected 3QFY23 revenues and management updated its financial guidance for FY23. 
We were impressed with subscription revenue growth, strong gross margins, and lower-than-expected operating loss. Sumo Logic Inc (SUMO US)  increased FY23 revenue guidance to $298M-$299M.
Our estimates suggest the company will cross the $300M ARR mark in 2022 and the stock currently trades at a discount to the 20%+ growth peer group.


Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a>  surprised investors and reported solid 2QFY23 results pushing shares up over 10% during a regular trading session on Friday. </li>
<li>Provider of cloud-based machine data analytics reported revenue/non-GAAP EPS of $74.1M/($0.10), above consensus, and improved FY23 outlook.  </li>
<li>Management focused on delivering more efficient growth and reduced hiring plans. Customer metrics remained strong, with a dollar-based net retention rate of 115%.</li>
</ul>



Sumo Logic Inc (SUMO US)  surprised investors and reported solid 2QFY23 results pushing shares up over 10% during a regular trading session on Friday. 
Provider of cloud-based machine data analytics reported revenue/non-GAAP EPS of $74.1M/($0.10), above consensus, and improved FY23 outlook.  
Management focused on delivering more efficient growth and reduced hiring plans. Customer metrics remained strong, with a dollar-based net retention rate of 115%.


Sumo Logic. 2QFY23 Wrap: Rising From The Ashes?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/splunk-inc" target="_blank" data-smartkarma-citation="entities:12849:1" rel="noopener">Splunk Inc (SPLK US)</a> , a leading American provider of machine-generated data platform and established software vendor, announced strong 1QFY23 earnings results. </li>
<li>Total revenues grew to $674M, up 34% YoY, the highest revenue growth rate for the last 3 years. Cloud revenues jumped by 66%, reflecting customer adoption of the cloud platform.</li>
<li>WSJ reported that Cisco made a <strong>$20B</strong>+ takeover offer for Splunk. However, no deal was on the table, but if talks resume, Cisco could pay $20B+, according to The NYT.   </li>
</ul>



Splunk Inc (SPLK US) , a leading American provider of machine-generated data platform and established software vendor, announced strong 1QFY23 earnings results. 
Total revenues grew to $674M, up 34% YoY, the highest revenue growth rate for the last 3 years. Cloud revenues jumped by 66%, reflecting customer adoption of the cloud platform.
WSJ reported that Cisco made a $20B+ takeover offer for Splunk. However, no deal was on the table, but if talks resume, Cisco could pay $20B+, according to The NYT.   


1QFY23 Revenue Growth Accelerated As Cloud-Driven Transformation Goes Well

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a> announced the appointment of Stewart Grierson as CFO and launched new products.</li>
<li>Management raised FY'22 guidance and growth of new customers started to recover as the global economy is reopening.</li>
<li>
<a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a> is one of our reopening stock ideas in technology sector in the United States.</li>
</ul>



Sumo Logic Inc (SUMO US) announced the appointment of Stewart Grierson as CFO and launched new products.
Management raised FY'22 guidance and growth of new customers started to recover as the global economy is reopening.

Sumo Logic Inc (SUMO US) is one of our reopening stock ideas in technology sector in the United States.


Expecting Strong Growth In CY22. New CFO Will Improve Business Performance

United States

Sumo Logic, Inc. provides cloud-based log management and analytics services. The Company enables enterprises to collect and analyze machine data from virtual sources that include servers, virtualization and security infrastructure, network devices, custom applications, and databases. Sumo Logic serves customers worldwide.

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Sumo Logic Inc (SUMO US)

New Relic: $1B+ Revenue By FY24. Cost Discipline Will Drive Profitability

We like New Relic’s turnaround story and believe revenue growth will accelerate in the coming years while the company will hit $1B+ revenue this year

Andrei Zakharov

Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results

Sumo Logic remains our top small-cap pick in US Software. Management provided long-term guidance and disclosed a clear plan to reach profitability...

Andrei Zakharov

Sumo Logic. 2QFY23 Wrap: Rising From The Ashes?

Sumo Logic could report a solid 2QFY23 results despite macro uncertainty and turbulent market conditions. Revenue growth accelerated to 26% y/y and...

Andrei Zakharov

1QFY23 Revenue Growth Accelerated As Cloud-Driven Transformation Goes Well

Cloud ARR growth has accelerated, and we expect Splunk shares may outperform Nasdaq Composite and publicly listed peers in 2022

Andrei Zakharov

Expecting Strong Growth In CY22. New CFO Will Improve Business Performance

We still believe Sumo Logic stock is the most undervalued technology unicorn in our SaaS/Cloud coverage universe, which trades at a discount to...

Andrei Zakharov

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