In software, the market is doing a great job of sorting out the platform companies from product companies. The next 5 years is all about platforms and bundling. MSFT being the ultimate bundle.
CrowdStrike is worth understanding as it looks to be a potential platform, taking share in the cybersecurity vertical which is economically less sensitive. LLMs definitely make hackers stronger, so there is also an AI angle that is interesting.
Yes, the macro is not exactly calling out for a high multiple growth stock, but CrowdStrike is a potential winner in a resilient and growing industry, the problem is market timing.
Bond market spreads such as investment grade and high yield are telling us that there are no problems in the economy. Yet, TransUnion, all fintech, solar, ALGN, anything that is sensitive to actual current interest rates is seeing demand crushed. Not dampened - just ran into a brick wall kind of stuff.
TRU: US Financial Services, year-over-year revenue grew 3% in July and 1% in August, but declined 5% in September.
ALGN: September new orthodontic patient appointments were down 8.7%yoy, and ortho case starts were down 6.9%yoy. Adults, who pay for themselves, are particularly weak. Interest rates are biting where they can.
Potential Upside: $243 (+40%) over 2 years
Sensible Downside: $90 (-50%)
Comments