top of page

Application Software Play - Buy the Dip!

Market Summary:

The major indices are all trading higher at midday following an active and bullish morning session on Wall Street, with stocks recovering some of last week’s steep losses. Cyclical issues, small-caps, and the Dow have all been showing relative strength this morning, as global growth fears eased thanks to the promising early data on the Omicron variant. The most virus-sensitive issues have also been pulling their weight even as the number of global COVID infections hit its highest level since late-August over the weekend.

Stock Pick Summary:

Today, we are doubling down on one of our high performing pick last year, until it took a severe beating last week. It was down more than 35% after reporting third-quarter earnings that included a more tempered outlook and environment than the market was anticipating. While the company posted impressive growth on both its top and bottom lines, the billings guidance, a key indicator of future revenue growth, came in lower than expected at only 28 which indicates a considerable slowdown from the prior two years. Possibly, the tailwinds from COVID that it enjoyed are beginning to subside. However, we believe it still remains a top quality business that will continue to grow in a more adjusted and normalized growth environment. The fundamentals are as strong as ever, with a strong dollar-based net retention rate of more than 120%. Not only is it onboarding more customers, pulling in 58,000 new users in the quarter, but the number of customers spending more than $300,000 each year with the platform grew 46%. It has been consistently showing its ability to scale posting a solid 16% free cash flow margin last quarter. While the market may be short sighted, we believe this company is still in just an early stage of tapping what could potentially be a $60 billion plus market opportunity, that it could exploit with steady growth in US and internationally. We are excited to take a second position in it today for the long term!

Risk Meter:

Allocation Guidelines:

  • We don't recommend over investing in any stock. Consider starting with a small amount, say 2-3% of your portfolio's overall value, and add a little at a time.

  • You could invest as low as $200-$500 on a pick, and even buy just 1 or 2 shares, if you are new to investing, low on cash or just prefer going slow.

  • For best results, have an intention to hold your position for at least 2 - 3 years in general. However, you can always lock profits sooner if you prefer as every investor has a unique portfolio and different goals.

  • Consider investing in our multiple stock picks (the more the better).

  • The most successful members look to mirror our portfolio as much as possible.

  • Besides the new stock pick, you may also consider diversifying amongst some of the earlier picks from our market crushing portfolio.

  • Be patient and don't allow daily market swings to unnerve you. Remember, we have a pristine track record over last 10 years, so Buzz with confidence and patience.

If you liked this pick and/or plan to open a position in it, please press the Like (Heart) Button below the post.

Keep Buzzing!

Stock Buzz Now Buy Recommendation
Stock Buzz Now Buy Recommendation

Recent Posts

See All


bottom of page