I go back and forth on this. If you have a look at 2000-2003 the Russel out performed the nasdaq. Similar patterns did occur as well in the 1970s. However they still trended down. So they certainly seem to be a less bad option.
FCF yield(buyback + dividend adjusted) is our baseline financial metric. We then apply a whole munch of others.
I've tracked the first three names fairly closely for the last 2 years.
With ZM and Docu - I don't think their moat is defined enough to maintain margins. They are not very operationally complex products IMO and easily substituted for by companies looking to reduce costs.
I like PLTR. My big concern is their buy revenue model and small high growth tech customer concentration. What type of churn will they see as some of these clients close shop or cut contact size? If you back out their bought revenue, what would their actual growth have been? Basically I need to rebuild revenue growth and forward looking growth which I haven't had time to do yet. I do think they are differentiated enough to defend margins.
I think all these companies are going to run more efficiently, esp on the customer acquisition front. But it's possible one or two of them don't do as well but as a whole, i think they should be able to find ways to make their growth more profitably and squeeze out more margins. Plus some of their competitors are probably going to go away. Like I don't see Google spend a lot of money improving Google Meet and people are going to be tired of it and just use Zoom. Same for Docusign, Okta and Twillio. Things are more complicated for Palantir but their customers are sticky and recession resistant so I think they still grow and hire engineers at lower costs.
I go back and forth on this. If you have a look at 2000-2003 the Russel out performed the nasdaq. Similar patterns did occur as well in the 1970s. However they still trended down. So they certainly seem to be a less bad option.
FCF yield(buyback + dividend adjusted) is our baseline financial metric. We then apply a whole munch of others.
I've tracked the first three names fairly closely for the last 2 years.
With ZM and Docu - I don't think their moat is defined enough to maintain margins. They are not very operationally complex products IMO and easily substituted for by companies looking to reduce costs.
I like PLTR. My big concern is their buy revenue model and small high growth tech customer concentration. What type of churn will they see as some of these clients close shop or cut contact size? If you back out their bought revenue, what would their actual growth have been? Basically I need to rebuild revenue growth and forward looking growth which I haven't had time to do yet. I do think they are differentiated enough to defend margins.
Thoughts?
I think all these companies are going to run more efficiently, esp on the customer acquisition front. But it's possible one or two of them don't do as well but as a whole, i think they should be able to find ways to make their growth more profitably and squeeze out more margins. Plus some of their competitors are probably going to go away. Like I don't see Google spend a lot of money improving Google Meet and people are going to be tired of it and just use Zoom. Same for Docusign, Okta and Twillio. Things are more complicated for Palantir but their customers are sticky and recession resistant so I think they still grow and hire engineers at lower costs.