Early this month, I unveiled Slack (NASDAQ: WORK) as one of the next big stocks, that have the potential to grow like Apple.
And last week, the company reported its 2nd Quarter report, which shows that they are headed in the right direction. However, 1 number from the report saw the stock’s price fall over 17%.
That’s a call for celebration.
One of the next big stocks got 17% cheaper. How on the ‘stock investing earth’ is that not a good news?
The reporting of a less than expected billings in Slack Q2 report, got a lot of analyst pessimistic about the stock, reducing their price targets. And that’s cool for them.
Unlike them, I think loooooong-term. I’m not looking to buy into a stock for the ‘now’, because I invest for no one but myself, and I’m young enough to ride a play for 20+ years.
Promising numbers from Slack Q2 Report
In the previous article, I noted that for Slack, 100,000 of paying customers is far more valuable than 1 million non-paying customers (that’s a no-brainer, anyways).
And in the Q2 report, Slack’s CEO and Co-Founder, Steward Butterfield spoke in the same language as I did, “Paid customer growth – which is the single most important driver of the business over the long term – accelerated in Q2, up 30% year-over-year”.
The company reported a total revenue of $215.9 million, an increase of 49% year-over-year, beating expectation by 3.17%, expected revenue was $209.22 million.
On the business side, the company reported over 130,000 paid customers, up 30% year-over-year.
The number of paid customer with greater than $100,000 in annual recurring revenue stood at 985, up 37% year-over-years.
While it also reported to have 87 paid customers with greater than $1 million in annual recurring revenue, up 78% year-over-year.
It also reported a calculated billings of $218.2 million, which fell short of expectation, however, that’s an increase of 25% year-over-year.
For me, and from a stock’s value perspective, the single most promising number from the Q2 report is it EPS.
It reported a breakeven second-quarter EPS on the $215.9 revenue, which beat analyst estimate of a 3 cent loss.
Quarter after quarter, Slack keeps getting stronger and stronger, fundamentally.
There are a lot of growth stocks that I think has great potentials, but only few of them have strong fundamentals than Slack ATM.
When you buy a share in a public traded company, as a stock investor, you are buying a part of that company, a part of what it is and what it stands for.
And with that mindset, I look at Slack and I see, a company in a growth market, with the best product and an excellent management team.
Listening to the noise and looking beyond the noise has helped me pick really good stocks overtime.
I believe Slack, as a growth stock, has the potential to grow like Apple. And if the stock price dip in this early stage, that’s a positive for me. I get to buy more at a discount.
Slack stock is getting cheaper.
What a good news.
Henry John is a Stock Portfolio Manager that focuses on companies developing cutting-edge technologies.
Keeping track of cutting-edge techs, companies and stocks is what I do almost everyday. And I love it. Whether it’s artificial intelligence, 5g, or autonomous vehicles; I’m all in.
I’m a self-made millionaire who made most of his money investing in technology companies while working in finance.
Yes! I owe it all to tech and finance.