Significant short-term divergence between a company’s business performance and stock price is a feature of the stock market, not a bug.

Long-term returns only come to those who are willing to bear that short-term price volatility, and pay that admission fee when others won’t.
Examples of 5 charts to bring this point home:

(1) Zoom Video Communications $ZM
(2) Zscaler $ZS
(3) The Trade Desk $TTD
(4) Adobe Inc $ADBE
(5) CrowdStrike $CRWD
Short-term daily price performance almost always does significantly deviate from long-term business performance.

Be a business-focused investor, not a price-focused one.

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More from @EugeneNg_VCap

14 Jan
Sharing my four key takeaways from Howard Mark’s latest memo - “Selling Out” (Jan22) on investing: 👇🏻
1 | The Advantage.

Long-term investors have an advantage over those with short time frames (the market majority).

Patience investors are able to ignore the short-term performance, hold for the long run, and avoid excessive trading, while most keep worrying & trades excessively.
2 ) Price Volatility = Noise.

Never let price movements / volatility get to your head and be the sole basis for any decision.  Image
Read 5 tweets
9 Dec 21
UiPATH $PATH 3Q22 Earnings

- Rev $221m +50% ↗️
- GP $178m +37% ↗️ margin 80% -772 bps↘️
- NG EBIT $9m ↗️ margin 4% +1334 bps✅
- NG Net Inc $2m ⤴️ margin 1% +1545 bps✅

- 9m OCF $-49m margin -8% -1087 bps↘️
- 9m FCF $-31m margin -5% -769 bps↘️
➡️ Strong Business Metrics 💪🏻

- ARR $818m +58% ↗️
- Net New ARR $92m +42% ↗️
- RPO $580m +80% 🚀
- cRPO $359m +69% 🚀
- Gross Retention 98% ➡️
- Net Retention 145%+ ✅
- Cust 9.6k+ +1.8k +23%YoY ↗️ +6%QoQ ↗️
- Cust >$100k ARR 1,363 +52%YoY ↗️ +9%QoQ ↗️
➡️ Strong Business Metrics 💪🏻 (cont’d)

- Cust >$1m ARR 135 +82% YoY 🚀 +14% QoQ ↗️
- Partners 4.9k 📶 +200 +4%QoQ ↗️

4Q22 Guide
- ARR $901-903m ↗️
- Rev $281-283m ↗️
- NG EBIT $10-20m ↗️

Tech Partnerships: Snowflake, CrowdStrike, Qlik and Alteryx.
Read 17 tweets
8 Dec 21
Price declines.

Expect large price declines over short periods of time, even for the best businesses.

Bessembinder (2020) on the 100 best stocks since 1950:

- Best Decade: Average loss -32.5% over 10 months.

- Preceding Decade: Average loss -52% over 22 months.
Extreme Stock Market Performers, Part I: Expect Some Drawdowns Hendrik Bessembinder July 2020

bailliegifford.com/literature-lib…
Similarly, the “Top 200” firms experienced an average -50% drawdowns (i.e. price decline from historical highs).
Read 4 tweets
7 Dec 21
Coupa Software $COUP 3Q22 Earnings 💪🏻

- Rev $186m +40%↗️
- GP $108m +32%↗️ margin 58% -358 bps↘️
- NG EBIT $28m +95%🚀 margin 15% +427 bps✅
- NG Net Inc $24m +81%🚀 margin 13% +287 bps✅
- OCF $31m +63% ↗️ margin 17% +240 bps✅
- FCF $28m +63% ↗️ margin 15% +216 bps✅
1 | Still Strong

- RPO $1.2b +58% ↗️
- cRPO +mid 40s% ↗️
- cRPO (ex Lamasoft) +mid 30% ↗️

4Q22 Guide
- Revenue $185-186m (flat QoQ)
- Billings $290m (mid teens after Lamasoft $14.8m adj)
2 | Strong Q

“We delivered another strong quarter with record revenue and profitability….we are seeing strong adoption of the Coupa platform…”
Read 11 tweets
7 Dec 21
MongoDB $MDB 3Q22 Earnings 💪🏻

- Rev $227m +50% ↗️
- Gross Profit $158m +51% ↗️ margin 70% +41 bps✅
- NG EBIT -$4m ⤴️ margin -2% +907 bps✅
- NG Net Income -$7m ⤴️ margin -3% +891 bps✅
- OCF -$6m ⤴️ margin -3% +283 bps✅
- FCF -$9m ⤴️ margin -4% +585 bps✅
$MDB Biz Metrics 💪🏻

- Atlas +84% 🚀now ~58% of revenues ↗️
(vs 56% in 2Q22, 47% in 3Q21)
- Cust >31K +37% ↗️ +2K QoQ 📶
- Atlas Cust >29.5K +40% ↗️
- Cust >$100k ARR 1,201 +34% ↗️
- Net AR Expansion >120% ✅
- >$0.5bn Rev Run-Rate 📈
1 | Strong 3Q22

“…just to reiterate, our strong performance is really due to again our consistent go to market execution as well as the confluence of the fact that the secular trends are really reinforcing our technical advantages and our growing credibility with customers….”
Read 12 tweets
5 Dec 21
My biggest takeaway from listening to “Invest Like the Best with Ram Parameswaran @_ram_ with Patrick O'Shaughnessy @patrick_oshag (5Jan2021)” 👇🏻

joincolossus.com/episodes/22392…
1 | Current Market Cap of Internet Companies ~10%

2 | 20-30 years, go up that S-Curve ~50-70%
3 | Front-end (marketplace, e-commerce, on-demand, ad & content solutions), with payments and software (cloud).
Read 9 tweets

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