8/21/24 - $cxm - More interesting at $9 but still non obvious8/21/24 :: VROCKSTAR :: NYSE:CXM
More interesting at $9 but still non obvious
- stayed away ahead of last results for the right reasons (go search/ read that one), a lot of our biz is simply avoiding problems. most co's will underperform the index. always helpful to keep this in mind.
- CEO transition always tough. in a bit of a transitional phase.
- still a tough mkt for these sub $5 bn B2B software types
- but do have a pretty significant cash pile 600 mm and debt of 50 mm so net cash is great. they also don't burn. subtract that from the 2.4 bn of mcap and you're sub 2 bn... about 1.85 bn enterprise value to be more precise
- so 2-2.5x EV to sales (doesn't matter if it's '24 or '25 bc the numbers are single digit growth... not amazing, that's the rub)
- gross profit seems to be stalling out in the ST with higher opex. so that flex that we noted last Q isn't necessarily going to continue "guaranteed" in the 2Q... 2H of this year... not great for a setup.
- and lastly, since the dumpity doo da aug 2 to aug 5 japanese chopstick sui extravaganza carry me out on a stretcher sell off... the stock is actually a rare example among the B2B software's not to be catching a bid. this is what i caught my eye. but being the skeptical person i am... this also worries me that there's less reason to get excited into this print and especially bc it's not for another 14 days (2 weeks).
- does anyone use or have familiarity with this software. if it's a good solution I think it's a possible take out for 2H esp as there's more visibility for the end market. but the anemic growth and the not obvious cash gen still have me probably side lined all else equal vs. the opportunity cost of other stuff I like ( NASDAQ:NXT is my top position by a long shot rn at $40).
- help! what do we do here? perhaps if we get a mkt dump and this goes with it, the setup is more obvious. 10 days to cover is a pretty highly shorted name which also could improve the setup if we leg lower.
opinions welcome always!
V
CXM trade ideas
6/5/24 - $cxm - sector keeps me sidelined for better entry 6/5/24 - vrockstar - NYSE:CXM - i like the inflecting opex leverage here, with gross profit up $25 mm in the last Q (on a YoY) basis and opex flat. this should continue and we'll still see mid teens growth for this smid cap. cash generation still fully supported by stock comp - which is undesirable but par for the smid tech complex. PE also less relevant here, but not cheap, between 25-35x depending on whether you want to measure next year or extrapolate a bit further out (we're nearly mid-year '24 at this pt so perhaps '26 really is the best #).
That being said, this still on my 'would buy' but need to see a bigger discount. the software factor is just getting cream corn'd right now by AI fears and probably rotation to some degree (which we can discuss in comments or DMs if you want a more nuanced POV here). So all in- i see nothing fundamentally wrong, valuation is okay, stock should do fine in the MT context. but in the short term context it's tough for me to want to get involved ahead of these results.
gl to the holders i'll be rooting for you
-V
CXM, 4/2-5/30, -2% LOSSOn 3/27/2024, Sprinklr (CXM) reported earnings of $0.13 per share on revenue of $194.21 million for the fiscal fourth quarter ended January 2024. The consensus earnings estimate was $0.09 per share on revenue of $188.75 million. The company reported in-line with expectations while revenue grew 17.47% on a year-over-year basis.
Trade Setup: Buy/Long Sprinklr (Recent IPO)Sprinklr Inc (CXM, $19.57)
- Long bias
- Support in 61.8% FIB range
- Descending triangle however break above
could signal directional shift
- Same-day reclaim of 8 21 x
- Add above $20.15 and $20.47
- Stop: $18.75
- Target: $23.40
Sprinklr is an American software company based in New York City that develops a SaaS customer experience management platform