$CRWD posted its 16th straight quarter of a dollar-based net retention (DBNR) rate above 120%. Also humble-bragged that its metric of customers using four or more modules wasn't worthwhile anymore (since over 70% already do) and changed it to 7 or more.
$DDOG one-upped CrowdStrike and recorded 19 consecutive quarters of a DBNR above 130%. As companies continue migrating to the hyperscalers' ($AMZN, $MSFT, $GOOG) clouds, Datadog is poised to benefit.
$BILL is my least confident pick of the group but is worth a watchlist spot as it also owns a promising DBNR of 124% and brings innovation to paperwork-heavy back-office operations.
Which of these three will perform the best over the next decade?
Voted for Datadog, but CrowdStrike is awesome as well.
I can't get Bill.com out of my head as being really frustrating, but that is only based on reading Packy McCormick's short on them from Jan 2021 (which, for the 10 months after he wrote it, Bill.com went up 162%. But then it fell all the way back down and is now 7% below where it was in Jan 2021. It takes a long time to be right!)
It's interesting to see $MCD alongside the likes of $SQ, $AFRM, $BILL. I like the company and think the have decent pricing power (though they should take care not to raise prices so high as to kill their value prop!)
Side note - subscription based businesses command a higher multiple and they generally deserve it. If a 100mm SaaS business wants to grow by 25% they only need to sell an incremental 25mm. A non subscription based company needs to sell 100mm plus 25mm in year 2 to grow 25%.
Companies with lower multiples:
1 - Industries in secular decline such as oil
2 - Highly regulated markets such as healthcare
3 - Low revenue growth
4 - Industries that may have become commoditized
5 - Legacy companies that are quickly losing market share to new entrants
Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.