Stockchase Opinions

Jim Cramer - Mad Money Slack WORK-N COMMENT Oct 05, 2020

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.

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BUY ON WEAKNESS

They just went public to a lot of fanfare. Since then, the stock has pulled back, because Microsoft responded with an app, Teams. Slack's software is better than Microsoft's, and many users are already content or ecstatic with Slack. He will add to his position.

WATCH
He follows them, but does not own it. He uses their messaging service and believes it has a long runway. He did not buy it on their IPO and sees the space having great value.
RISKY
It is a work-from-home beneficiary. It is anyone's guess what will happen in the short term. There has been a real rotation out of the high fliers recently. It is priced for perfection so any earnings report that isn't stellar could cause a sell-off.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

BUY ON WEAKNESS

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%

DON'T BUY

Another Canadian success story. Valuation is quite rich. Other companies have a better risk-adjusted reward. For the collaboration space, he'd look at Open Text with its great track record. instead. WORK has a lot of shiny promise.

COMMENT

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.

DON'T BUY
He didn't like their last quarter and doesn't see why one should own it. Offered weak guidance, like macro issues they're facing like fewer companies buying their service, and layoffs.
COMMENT

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.

DON'T BUY

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.