Opinions
The Panic-Proof Portfolio (Stockchase Research)
Slack
WORK-N
BUY ON WEAKNESS
Jul 28, 2020
Stock price when the opinion was issued
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He likes the business productivity tools of Slack, but he would favour Microsoft for the tech space. IPAY will give you a bucket of payment option, but he would prefer to chose his own securities, like Visa. The payment space is a budding part of the e-commerce space that will continue to take off.
It can't get any traction. It should be a natural work-from-home stock. True, it popped from $15 to $40 between March and June, but then lagged other work-cloud stocks because Wall Street feared too much competition in this space. Last month, Slack reported a solid top and bottom, except billings and net retention rate (additional business from existing customers). He thought these numbers were fine, but Wall Street didn't. Yes, there's competition--his own poll show that Slack is being clobbered by competition from Microsoft Teams.
It can't get any traction. It should be a natural work-from-home stock. True, it popped from $15 to $40 between March and June, but then lagged other work-cloud stocks because Wall Street feared too much competition in this space. Last month, Slack reported a solid top and bottom, except billings and net retention rate (additional business from existing customers). He thought these numbers were fine, but Wall Street didn't. Yes, there's competition--his own poll show that Slack is being clobbered by competition from Microsoft Teams.
Mission is to eliminate email, to lead to higher productivity. Interesting product. Being acquired by Salesforce, in a huge deal. He worries about competition from MSFT Teams. Post-pandemic, businesses are going to be consolidating and eliminating vendors.
Stockchase Research Editor: Michael O'Reilly Work-from-home is an emerging trend that will likely continue post-pandemic and WORK is a leader in the space although it has taken a pullback lately. The company has launched an antitrust suite in the EU against Microsoft citing an unfair bundling of its products, which may be holding share value down a little. Its recent earnings report showed revenues being up 50%, with paid customers up almost 30% and gross margins of almost 90%. We would look to enter in a further pullback towards $26.00 Yield 0%