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

<p>Some updated thinking on our shorts: We like the Teradata short setup into 2Q21, and think Tesla may finally be <em>safe</em> to short. Well, safe as it ever gets. Apple remains our preferred large cap short, while Disney we flip from long biased to short biased as Disney+ subscriber numbers have decelerated massively. </p><p></p><div class="content-highlight"><p>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.  </p></div>

Some updated thinking on our shorts: We like the Teradata short setup into 2Q21, and think Tesla may finally be safe to short. Well, safe as it ever gets. Apple remains our preferred large cap short, while Disney we flip from long biased to short biased as Disney+ subscriber numbers have decelerated massively. 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.  

<p>We think Snowflake is expensive, but not necessarily as expensive at it seems (44x CY22 revenues) when looked at on a growth adjusted metric (0.6x). This quarter didn’t reveal anything notable – the business is still doubling YoY, guidance for 90% growth next quarter seems conservative, and the operating model as a whole seems conservative (e.g. mid70s gross margin target vs. 73% today)…which is why we expect some sort of update coming in two weeks at Snowflake’s analyst day. The stock has become a consensus short, which explains some of the price action today on a just “ok” guidance. The recent drawdown below $200 represented a good entry point…we are long, and would add into Analyst Day.</p><div class="content-highlight"><p>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.</p></div>

We think Snowflake is expensive, but not necessarily as expensive at it seems (44x CY22 revenues) when looked at on a growth adjusted metric (0.6x). This quarter didn’t reveal anything notable – the business is still doubling YoY, guidance for 90% growth next quarter seems conservative, and the operating model as a whole seems conservative (e.g. mid70s gross margin target vs. 73% today)…which is why we expect some sort of update coming in two weeks at Snowflake’s analyst day. The stock has become a consensus short, which explains some of the price action today on a just “ok” guidance. The recent drawdown below $200 represented a good entry point…we are long, and would add into Analyst Day.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.

Snowflake 2Q22 Earnings: Stay Tuned to Analyst Day

<p>When we first looked at Snowflake at the time of the IPO, we saw an incredible business with great management and unbelievable business model. But the stock quickly went well beyond our valuation comfort levels, and last quarter we said we couldn’t justify owning it. We reserve the right to change our minds. The number that stood out this quarter was 168% - Snowflake’s net revenue retention in the quarter. We still think Snowflake is expensive – and you can arguably get a similar growth rate and excellent business model at half the valuation with Crowdstrike…but like many compounders (Adobe, ServiceNow), sometimes you never get the entry point you want. We think the drawdown in growth presents that opportunity.</p>
<div class="content-highlight">
<p>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.</p>
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When we first looked at Snowflake at the time of the IPO, we saw an incredible business with great management and unbelievable business model. But the stock quickly went well beyond our valuation comfort levels, and last quarter we said we couldn’t justify owning it. We reserve the right to change our minds. The number that stood out this quarter was 168% - Snowflake’s net revenue retention in the quarter. We still think Snowflake is expensive – and you can arguably get a similar growth rate and excellent business model at half the valuation with Crowdstrike…but like many compounders (Adobe, ServiceNow), sometimes you never get the entry point you want. We think the drawdown in growth presents that opportunity.

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.


Snowflake 4Q21 Earnings: Their Revenues ARE Worth More Than Yours

<p>Snowflake had a good quarter…it was a bit above expectations that were well telegraphed from the IPO, and their guidance was only inline (though likely conservative)….so what does one do with a stock that is the single richest multiple in the stock market (100x+ sales)? Buy a lot more? We can’t pretend to understand why this stock was up 16% today. And we can’t pretend to understand why the market values its revenues at 3x!!! the rest of high valuation software. We don’t short on valuation alone. But we certainly couldn’t justify owning Snowflake.</p><p><strong> </strong></p><div class="content-highlight"><p>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.</p></div>

Snowflake had a good quarter…it was a bit above expectations that were well telegraphed from the IPO, and their guidance was only inline (though likely conservative)….so what does one do with a stock that is the single richest multiple in the stock market (100x+ sales)? Buy a lot more? We can’t pretend to understand why this stock was up 16% today. And we can’t pretend to understand why the market values its revenues at 3x!!! the rest of high valuation software. We don’t short on valuation alone. But we certainly couldn’t justify owning Snowflake. 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.

Snowflake 3Q21: Our Revenues Are Worth More Than Your Revenues

Palantir Technologies  / Equity Bottom-Up

<p>When we took a deep dive into Palantir, we thought it would be as a long. Up 90% in the past month? Its a short.</p>
<div class="content-highlight">
<p>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.</p>
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When we took a deep dive into Palantir, we thought it would be as a long. Up 90% in the past month? Its a short.

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.


United States

Teradata Corp operates as a database management company in the technology industry. The company offers analytic data solutions through integrated data warehousing, big data analytics, and business applications.  Teradata Corp collaborates with leading innovators in software, technology, and integration services.

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Teradata Corp (TDC US)

2H21 Obex Research Short Portfolio

We like the Teradata short setup into 2Q21, and think Tesla may finally be safe to short. Apple remains our preferred large cap short, while...

Aaron Gabin

Snowflake 2Q22 Earnings: Stay Tuned to Analyst Day

Snowflake has become a consensus short, we think the recent drawdown below $200 represented a good entry point…we are long, and would add into...

Aaron Gabin

Snowflake 4Q21 Earnings: Their Revenues ARE Worth More Than Yours

Snowflake had an incredible quarter and we think its a reasonable entry point for the highest valuation software stock in the market.

Aaron Gabin

Snowflake 3Q21: Our Revenues Are Worth More Than Your Revenues

Snowflake's first public quarter was a raging success according to the stock market, who boosted a 100x P/S company by 16% just for meeting...

Aaron Gabin

2021 High Conviction: Short Palantir

We take a deep dive into the Palantir business model and come away skeptical that the success of its first quarter as a public company is sustainable.

Aaron Gabin

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