AYX - Embedded Expectations Analysis - 2021 08 20
Alteryx, Inc. (AYX:USA) currently trades below recent averages relative to UAFRS-based (Uniform) assets, with a 7.3x Uniform P/B, implying bullish expectations for the firm. Although management may have concerns about near-term sales capacity, their customer base, and revenue guidance, market expectations are overly bearish. As such, strong equity outperformance is warranted.Specifically, management may lack confidence in their ability to offset near-term lower
sales capacity, execute hiring plans to scale globally, and manage sales attrition. Additionally, they may have concerns about their revenue guidance, seasonal headwinds, and their competitive position in the market. Moreover, management may be exaggerating their platform's financial fraud detection potential, customer ROI, and the power of their real-time insights. Furthermore, they may have concerns about their sales pipeline, the sustainability of their shared customer base growth with Snowflake, and net expansion rates. Finally, management may have concerns about collecting payments on multiyear contracts and they may lack confidence in their ability to generate improvements in ARR going forward through higher contract values.
Although management may have concerns about near-term sales capacity, their customer base, and revenue guidance, market expectations are overly bearish given the firm's fast-growing, highly profitable SaaS-like business model. As such, equity outperformance is warranted.
Alteryx provides data science and analytics. The company's analytics platform comprises: Alteryx Designer, its data profiling, preparation, blending, and analytics product used to create visual workflows or analytic processes; Alteryx Server, its server-based product for scheduling, sharing, and running analytic processes and applications in a web-based environment; Alteryx Connect, its collaborative data exploration platform for discovering information assets and sharing recommendations across the enterprise; and Alteryx Promote, its analytics model management product for data scientists and analytics teams to build, manage, monitor, and deploy predictive models into production applications.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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