2/ These companies have all been massive winners the past few years. Investors have been amply rewarded for owning these #SaaS companies thus far. In last 3 yrs, all have at least tripled. 
3/ As I've said before, revenue growth is always one of the first things I look at when evaluating investments (and Phil Fisher's first principle for looking at stocks).
And while $OKTA has appreciated the most, $TWLO's revenue has grown the most.
And while $OKTA has appreciated the most, $TWLO's revenue has grown the most.
4/ After looking at the top-line, let's look at operating income.
$VEEV is consistently in the black, $TEAM approaching profitability, $OKTA and especially $TWLO trending down.
$VEEV is consistently in the black, $TEAM approaching profitability, $OKTA and especially $TWLO trending down.
5/ Now let's look at some valuation metrics, starting with free cash flow yield.
Remember, the higher the ratio the better return investors are receiving in exchange for their money.
Remember, the higher the ratio the better return investors are receiving in exchange for their money.
6/ But w/these companies the best measure might be the price-to-sales ratio. $OKTA and $TEAM are EXPENSIVE, which is what has kept me out of both names thus far. I would be more forgiving WRT $VEEV b/c it is profitable. $TWLO seems more reasonable, though there are reasons...
7/ Don't run through metrics w/o looking at margins. Here's where you see why the three priciest of these stocks might be deserving of such lofty valuations. $TEAM's margins are esp incredible. $TWLO is obvious laggard in bunch.
8/ When looking at operating margins, you see the potential of $OKTA and $TEAM once they turn profitable by seeing what $VEEV is doing now. Operating margin approaching 30% is nothing to sneeze at!
9/ The numbers above are important, giving us an insightful first glance, but are far from the whole story.
For instance, if you were going to invest $TWLO, you would need to know that its crazy revenue growth was spiking due to a key acquisition and not organic.
For instance, if you were going to invest $TWLO, you would need to know that its crazy revenue growth was spiking due to a key acquisition and not organic.
10/ The most important thing I look for is evidence of an economic moat. There's also management, strategy, balance sheets, etc.
e.g. For these types of companies, one of things I'm most concerned with is the stickiness of their platforms (e.g. high switching costs).
e.g. For these types of companies, one of things I'm most concerned with is the stickiness of their platforms (e.g. high switching costs).
11/ Finally, if you made it this far, I'm super excited about today's announcement. But have no fear. We're all still going to be as active on Twitter as possible, participating in conversations and mixing it up as much as possible.
Thanks for all the support!
Thanks for all the support!
