Francis -O-A's avatar

$103.4M follower assets

Tech Investor
Francis -O-A's avatar
$103.4m follower assets
Snowflake's cybersecurity growing importance
A new type of security data lake is emerging and $SNOW is building a large cybersecurity ecosystem with some interesting security startups such as panthers lab, hunters ai, securonix.

These companies are building amazing cybersecurity products on Snowflake's data lake.

With snowflake's announcement yesterday, cybersecurity incorporated with snowflake is a space to watch over the next few years!
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Cybersecurity Industry Breakdown: One of my focus for 2022 and Q4 Earnings Report
This is a breakdown of the entire security industry:

The most popular sectors are Cloud Security and Endpoint protection security.

I am looking forward to the reports for each of these players within each category to extrapolate which sectors will grow the fastest.

Key companies to watch: $NET $CRWD $S $FTNT $ZS $PANW $MSFT $PLTR

Hope this breakdown helps people!
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Thanks for the breakdown! From an enterprise client standpoint, maybe even from a smaller sized business, one would think they wouldn't want three different security products, they would prefer one that has what they really need and covers the other service areas as adjacent service offerings?

When I try and analyse stocks in the space, I am always trying to think through this. Yes some of these services are 'mission critical' and attract higher spending than the rest, but would you rather pick the one that is the best in a specific cybersec offering, or maybe rank them based on how good all of their offerings are and choose the one which is okay in most of them?
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The Snowflake Thesis
What is Snowflake:

Snowflake is a cloud-agnostic data-warehouse company for centralizing all the data in a company. The platform is able to accommodate structured and unstructured data.

They have pioneered a data-cloud enabling customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data.

Competitive Advantage:
  • Market Leader: Advanced storage and computing capabilities together over their competitors like Databricks who is focused on ML/Data science.
  • Snowpark marketplace and data sharing capabilities that expands their already Large and growing Total Addressable market opportunity
  • Wide-level integrations with multiple customers, partners and system integrators.
  • Business Model: Consumption and usage-based model that enables ultimate flexibility for customers.

Product Moat:
  1. Ease of use, speed, scalability, and performance
  2. Unique and high switching costs due to the high cost of unlearning and disruption to business services once you have installed Snowflake
  3. They have a defensible and differentiated technology stack with high barrier to entry.
  4. The company has a cognitive referent brand within the data industry amongst consumers.

Financial Metrics:
  1. Accelerating Revenue growth last 4-qtrs - (beat and raise): 117% > 110% > 105% > 110%
  2. Margins:
  • Gross Margins: 56% > 57% > 61% > 64%
  • EBITDA Margin Losses: 105% > 90% > -74% > Now: -47%

  1. Land & Expand: High Net Retention Metric in dollars and customers (Signals customers want the product)
  • Customer Growth: 84% > 67% > 60% > 52%
  • DBNRR: 168% > 168% > 169% > 173%

In summary, Snowflake is a special company that represents an important future for Data and AI.

If interested, I did a past write-up:
$SNOW's an exciting company. Management has said they want to get to $10B in revenue by 2029 which would make this a multi-bagger from here...impressive for a company at a $100+B market cap! Thanks, @investianalyst!
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Investment Thesis: Why DataDog has a premium valuation:
$DDOG is a SaaS company that helps companies observe and monitor their software applications, servers, databases, tools, and services, through a SaaS-based data analytics platform. It ensures that IT and DevOps teams can identify issues before they become costly.

Some metrics:

+ 4YRS of 70%+ CAGR Growth w/ ARR
+ 77% - Gross Margins
+ Flawless GTM execution,
+ Product velocity,
+ Consistent 130% N-Dollar Retention,
+ Customer stickiness w/ Product Moat,
+ 15% FCF + 11% EBITDA Margin
+ Lowest S&M spend within the sector, but highest growth.
+ No 1 within its product category

DDOG is the epitome of SaaS Business quality hence the reason why it has always maintained a premium valuation. This is one of my highest conviction SaaS names.
I studied the company New Relic about a year ago which is in the same space as DataDog. DataDog has been crushing them recently. Do you have any insight into why DataDog's product has been better?
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The paradox of Investing.
One of the biggest lessons I've learned from the recent volatility.

You're better off focusing on the long-term outcome because the faster you want to make money in the markets, the more likely you are to lose it faster.
Completely true. The faster you want to make money, the more risk you have to take on. And at a certain level of risk… you pretty much are asking for a wipeout.
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This is a great quote I read from Deliberate Capital's Blog:

"There are three major competitive advantages in investing: 1) informational (knowing a meaningful fact nobody else does); 2) analytical (cutting up the public information to arrive at a superior conclusion) and 3) psychological (that is to say, behavioral). Informational and analytical advantages are harder to come by, therefore long-term investors must assess if they have the behavioral aptitude to succeed as active investors."
While the informational and analytical advantages are extremely competitive, the ‘behavioral’ vector is probably the ‘team with the least cuts at tryouts’

The massive amount of short term money in the market means many, many long term investors can have a seat on the bus if they want it.

The behavioral vector is the only one where you disqualify yourself.
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Today is a great example of why it is difficult to effectively time the markets.

This is why during bear markets, stocks return to their rightful owners.
Amazon AWS is a stunning business:

Amazon's AWS is at a $64B run rate, growing 39% YoY and still accelerating growth from 37% in Q2! Defying the law of large numbers.

Meanwhile, Microsoft's Azure grew 48% YoY at a $35-$40B run rate and the lower one was Google Cloud growing 45% YoY (decelerating growth from 54%) at a $20B run rate.

All remarkable businesses!