CFLT

There Will Be Volatility

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By Brian Nelson, CFA Last year, 2022, was a big test for equity investors, and the downside volatility that we witnessed during the year wasn’t comfortable, to say the least. Following the COVID-19 crash and rebound during 2020, and then the market surge in 2021, it wouldn’t be a stretch to say many investors’ heads are probably still spinning from all the volatility witnessed to start this decade. That said, part of what we’ve been warning about the past few years with respect to the equity market, especially in Value Trap, is that the proliferation of price-agnostic trading (e.g. quant, machine/algorithmic trading, etc.) will only lead to more and more market volatility, so while we were somewhat surprised by last … Read more

Adobe Acrobat Pro Prices Up 33%; Price Tag of Figma Deal Remains Overhang on Shares

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Image: Adobe’s long-term market opportunity is huge. Image Source: Adobe By Brian Nelson, CFA All things considered, fiscal 2022 was a solid year for Adobe (ADBE), as reported in its latest quarterly earnings report December 15. The company generated record revenue, operating income, and operating cash flow, and we loved that management is talking in terms of the “next decade of growth,” not next quarter or even next year. We like executive suites that are positioning their companies for the long run, and we think Chairman and CEO Shantanu Narayen has done a great job leading the charge. Adobe is among the most well-known software companies due in part to its Adobe Acrobat software. Almost anyone that has applied for a job has … Read more

Adobe Signals Near Term Growth Rate Slowing Down, Longer Term Outlook Still Quite Bright

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Image Source: Adobe Inc – December 2021 Financial Analysts Meeting IR Presentation By Callum Turcan On December 16, Adobe Inc (ADBE) reported fourth quarter earnings for fiscal 2021 (period ended December 3, 2021) that modestly beat consensus top- and bottom-line estimates. However, shares of ADBE plummeted in the wake of its latest earnings report as management signaled that the firm’s near term growth rate would slow down in fiscal 2022 versus levels seen in fiscal 2021. Investors were apparently hoping for more, though in our view, Adobe’s longer term growth outlook is still quite bright. Our fair value estimate sits at $576 per share of Adobe. Earnings Update The company’s GAAP revenues were up 20% year-over-year last fiscal quarter, reaching … Read more

Salesforce Has Room to Run

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Image Source: Salesforce Inc – Fourth Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan Salesforce Inc (CRM) was founded in 1999 as software-as-a-service (‘SaaS’) company built around customer relationship management (‘CRM’) software, initially a version created by its co-founders Marc Benioff, Parker Harris, Frank Dominguez, and Dave Moellenhoff. The firm is headquartered in San Francisco, California. The company offers software that assists its customers with marketing, customer service, sales, digital commerce, business development, collaboration, analytics, recruitment, and numerous other activities. These offerings aim to improve workplace productivity by streamlining certain functions and automating others. Salesforce provides a comprehensive suite of software solutions designed for businesses and government entities across its Customer 360 platform, while using analytics and AI … Read more