SaaS Cracks

by Dan September 9, 2019 12:03 pm • Chart of the Day

Earlier today I wrote a post discussing the price action of recent tech IPO’s and the feedback on the next Mega-Unicorn hoping to reach the public markets (Tech Unicorns Born Into a Grave). My take-away is quite simple regarding the massive ones consumer-focussed ones that have broken price and make new lows every day, vs those that are enterprise-facing have relatively small floats and until this summer made new highs every day with seemingly endless gains (aside from Slack).  I thought it I’d offer up some charts of the latter group, that are still up a ton on the year but are nearing or have broken the uptrends that have been in place for most of the year…

CrowdStrike (CRWD) – $15 billion market cap, trades 35x 2020 . sales, not expected to turn a profit until 2022:

 

Slack (WORK) – $13.5 billion market cap, went public through direct listing at $26 recently, broke that price today, trades 22x 2020 sales, not expected to be profitable until 2022:

 

Zoom (ZM) – $21.5 billion market cap, trades 36x 2020 sales, profitable on an adjusted basis but not supposed to be on a GAAP basis till 2023:

 

Twillio Inc (TWLO) went public in 2016, up 10x since, sports a $15.5 billion market cap, trades 14x expected 2019 sales, turn a small adjusted profit, not exp3ted to do so on a GAAP basis for years:

 

Atlassian (TEAM), went public 2015 at $21, sports a $30 billion market cap, trades 20x expected 2020 sales, GAAP losses, small adjusted gain:

 

MongoDB went public in 2017, sports a $7.2 billion market cap, trades 18.5x expected 2020 sales, maybe profitable on a GAAP basis in 2023:

 

And obviously you will want to keep an eye on the big dogs, Salesforce (CRM), ServiceNow (NOW) and Workday (WDAY)…

CRM – has a $131 billion market cap, mildly profitable on a GAAP basis, trades nearly 8x expected 2020 sales, in a downtrend since the Spring despite last month putting up a good qtr and guidance:

NOW has a $47 billion market cap, mildly profitable on a GAAP basis, trades nearly 14x expected 2020 sales, approaching key support:

 

 

WDAY has a $37 billion market cap, steep GAAP losses for years, trades 10x expected 2020 sales, down 26% from July highs, in a freefall: