In today’s briefing:
- FY3Q23: If It’s All Macro, Do You Buy the Dip?
- A Blessing in Disguise
- Oracle: What To Expect As It Reports Q2 2023 Results
FY3Q23: If It’s All Macro, Do You Buy the Dip?
- First ever ARR miss, and big initial guide down on FY2024 ARR growth: low 30s vs. 37% into the Q. Pretty shocking given Crowdstrike’s track record.
- Macro Macro Macro – deal close times pushed out for SMBs and Enterprise customers reworking timing of deal starts to match opex budgets.
- Stock is overly punished down 20% and trading at 9x forward sales for a platform consolidator with 30% FCF margins.
A Blessing in Disguise
- We try to stay away from the fool’s errand of forecasting the economy;
- But often, we notice that high-quality businesses actually benefit from harsh economic conditions in terms of (long-term) shareholder value;
- We provided an example of a company that we own to illustrate how.
Oracle: What To Expect As It Reports Q2 2023 Results
- Oracle’s share price drop presented a good opportunity for long-term shareholders to average down.
- Lagging analysts’ sentiment still presents an opportunity for future multiple repricing.
- Headwinds for profitability will likely be an issue for investors with short-term investment horizons.
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