巴克莱-美股-软件行业-美国软件业：第四季度非周期收益指南-2019.2.8-36页.pdf

Equity Research 8 February 2019 CORE Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 30.U.S.Software The Q4 Off-Cycle Earnings Guide Positive Set-up Ahead of Q4 Earnings:With Q4 being the strongest IT spending quarter and most off-cycle names being structural beneficiaries we expect a healthy earnings season.We also believe that the market nervousness around Q3 results helped to reset 2019 expectations lower and hence guidance should not be a problem here either.With this set up shares should work,in our view.The main factor to watch for us is valuation given the healthy start to the year for many of our growth names.Considering this,we prefer CRM and Splunk,which both still have reasonable valuation levels,and MongoDB,which has a specifically healthy set up.Names We Prefer:Salesforce(OW)Expect a Healthy Billings Beat:Billings expectations for Q4 seem conservative(17.5%consensus growth),considering the positive compounding effect from Q4 invoicing seasonality and inorganic contribution from MuleSoft.Our latest VAR survey(see end of this report)also showed positive data points,and overall,we like CRM going into its seasonally biggest quarter.MongoDB(OW)Bullish Going into FY20:Atlas numbers will continue to trend strongly in Q4 and we see a strong possibility for a beat on FY20 guidance.We believe consensus is mis-modelling growth rates and mix for Atlas and Enterprise Advanced for next year,which should drive positive estimate revisions in coming quarters.Finally,a move to ASC 606 should make guidance look even better.Splunk(OW)Favorable Set-Up and Strong Momentum:Street estimates for Q4 and Q1 look conservative and checks on end-market demand continue to be strong.Names We Are Cautious On:Coupa(EW)Recent Run Makes Us Nervous:Despite being a high quality growth asset,Coupas current valuation(16x CY20E EV/Sales)makes us nervous into the print.We believe the recent run(+47%vs.S&P of+8%YTD)has been driven more by hype around the Coupa Pay opportunity rather than fundamentals.Hence,we look for commentary from management that would support the recent hype.Intuit(EW)Moving Parts around Tax Season Creates Volatility:We are heading into the heart of Intuits tax season,the next two quarters make up 70%of revenue and 100%of operating profit.We expect the company to beat tax guidance but also acknowledge the many unknowns around Live SKU adoption rates,new tax rules,and government shutdown which might create short term volatility to Q2.Downgrading Anaplan to EW on Valuation:We like Anaplans fundamentals around market positioning and its long-term potential.However,shares have reached our price target and we believe that further upside,with the stock trading already above 10 x CY20E EV/Sales,is difficult to argue fundamentally.INDUSTRY UPDATE U.S.Software POSITIVE Unchanged For a full list of our ratings,price target and earnings changes in this report,please see table on page 2.U.S.Software Raimo Lenschow,CFA+1 212 526 2712 BCI,US David Rainville+1 212 526 9318 BCI,US Pree Gadey+1 212 526 3156 BCI,US Mohit Gogia+1 212 526 1053 BCI,US Michael Maguire+1 212 526-8682 BCI,US Barclays|U.S.Software 8 February 2019 2 Summary of our Ratings,Price Targets and Earnings Changes in this Report(all changes are shown in bold)Company Rating Price Price Target EPS FY1(E)EPS FY2(E)Old New 07-Feb-19 Old New%Chg Old New%Chg Old New%Chg U.S.Software Pos Pos Anaplan,Inc.(PLAN)OW EW 31.37 30.00 32.00 7-0.79-0.79-0.72-0.72-Coupa Software Inc.(COUP)EW EW 92.22 71.00 86.00 21 0.09 0.09-0.25 0.25-Elastic N.V.(ESTC)OW OW 85.14 85.00 105.00 24-1.34-1.32 1-1.35-1.33 1 Splunk Inc.(SPLK)OW OW 128.21 136.00 154.00 13 1.14 1.14-1.61 1.61-Workday Inc.(WDAY)EW EW 186.61 150.00 180.00 20 1.22 1.27 4 1.46 1.54 5 Source:Barclays Research.Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in the reporting currency.FY1(E):Current fiscal year estimates by Barclays Research.FY2(E):Next fiscal year estimates by Barclays Research.Stock Rating:OW:Overweight;EW:Equal Weight;UW:Underweight;RS:Rating Suspended Industry View:Pos:Positive;Neu:Neutral;Neg:Negative Valuation Methodology and Risks U.S.Software Anaplan,Inc.(PLAN)Valuation Methodology:Our price target of$32 is based on 11x CY20E sales of$378mn.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Slower than expected migration from legacy systems to the cloud and competitors catching up to Anaplan with platform solutions.Coupa Software Inc.(COUP)Valuation Methodology:Our price target of$86 is based on CY20 EV/Sales of 15x and revenue of$388mn.Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Failure to grow its spend management platform would disrupt the potential for network effects,which could adversely affect the future growth of the business.This,along with advances in competing legacy vendor technology,would have an effect on Coupas ability to seize market share and increase top-line growth.Elastic N.V.(ESTC)Valuation Methodology:Our price target of$105 is based on a weighted average of 40%our high case($169),40%our mid case($70)and 20%our low case($47).Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Key risks include:1)lack of profitability of the company since inception as well as the forecasted losses ahead;2)Elastic competes with many different technologies,as well as incumbents in the search space which will have stronger enterprise footprints;3)the companys core platform is fully open source and could be replicated by the large cloud players.Splunk Inc.(SPLK)Valuation Methodology:Our price target of$154 is based on 9x our CY20 sales estimate of$2.6bn Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Given the market is nascent and the true information value of machine data is still relatively unknown,it is possible that growth slows faster than we expect as businesses do not find the ROI to be as compelling as currently believed.Additionally,weaker economic conditions could lead to customers making less investments,including software spending,which would be a risk to our forecasts.Workday Inc.(WDAY)Valuation Methodology:Our price target of$180 is based on CY20 EV/Sales of 10 x and revenue of$4.24bn Risks which May Impede the Achievement of the Barclays Research Valuation and Price Target:Faster than expected ramp up in its Financial Accounting products functionality and scalability could lead to faster enterprise traction and ultimately sales revenue than we currently expect.On the downside,failure to gain traction enterprise financials which much of the valuation depends on would cause multiple contraction Source:Barclays Research.Barclays|U.S.Software 8 February 2019 3 CONTENTS EARNINGS CALENDAR.4 VALUATION AND PRICE PERFORMANCE.5 ANAPLAN(EW/POS,PT$32).6 COUPA(EW/POS,PT$86).8 ELASTIC(OW/POS,PT$105).9 INTUIT(EW/POS,PT$223).10 MONGODB(OW/POS,PT$108).12 PIVOTAL(EW/POS,PT$23).13 SALESFORCE(OW/POS,PT$172).14 SPLUNK(OW/POS,PT$154).15 VMWARE(OW/POS,PT$168).16 WORKDAY(EW/POS,PT$180).17 VAR SURVEY DETAILS.18 Barclays|U.S.Software 8 February 2019 4 EARNINGS CALENDAR FIGURE 1 Q4 Off-Cycle Earnings Calendar Source:Refinitiv,Nasdaq,Barclays Research*Estimated earnings date 18-Feb19-Feb20-Feb21-Feb22-FebFIVN EarningsINTU EarningsAPPN Earnings25-Feb26-Feb27-Feb28-Feb1-MarPLAN Earnings*WDAY Earnings*CRM EarningsSPLK Earnings*VMW Earnings4-Mar5-Mar6-Mar7-Mar8-Mar*ESTC Earnings11-Mar12-Mar13-Mar14-Mar15-Mar*COUP Earnings*PVTL Earnings*MDB Earnings18-Mar19-Mar20-Mar21-Mar22-MarMondayTuesdayWednesdayThursdayFridayBarclays|U.S.Software 8 February 2019 5 VALUATION AND PRICE PERFORMANCE FIGURE 2 Valuation Table Source:Barclays Research,Thomson One*Price as of Previous Days Market Close CurrentPriceMarket CapCategoryCompanyRatingpricetargetUSD($,mn)2019E2020E2019E2020E2019E2020ELarge capIntuitEW220.9722360,21032.1x27.8x8.6x7.8x27.7x23.8xMicrosoftOW105.27120817,73722.9x20.2x5.9x5.3x21.2x18.1xOracleEW50.2255191,69014.1x13.2x5.0 x4.9x12.0 x11.0 xSAPOW103.46123123,84218.3x16.8x4.0 x3.7x31.8x24.3xEnterpise SaaSAnaplanEW31.37324,459nmnm13.8x10.8xnmnmAppianEW34.19312,361nmnm8.6x7.2xnmnmCeridianEW43.44446,44698.9x70.4x8.4x7.4x98.6x85.5xCoupaEW92.22866,446nmnm19.6x16.0 xnmnmCornerstoneUW58.23483,73848.5x36.9x6.4x5.6x42.1x32.2xFive9EW51.72463,35978.8x50.9x10.8x9.1xnm64.8xLogMeInOW92.911134,96815.9x14.2x4.0 x3.7x12.5x11.5xPaycomEW168.171609,87553.0 x41.5x13.8x11.2x51.8x38.0 xSalesforceOW154.93172122,76956.3x46.5x7.6x6.4x37.0 x30.3xServiceNowOW226.9623544,57778.1x58.3x12.8x10.1x45.1x34.8xWorkdayEW186.6118045,035nm89.2x12.8x10.4xnm93.3xBig DataElasticOW85.141057,584nmnm23.6x18.5xnmnmMongoDBOW95.871086,152nmnm17.0 x12.7xnmnmSplunkOW128.2115420,44881.8x60.8x9.2x7.5x53.1x41.3xTableauOW121.5413711,16573.4x51.1x7.4x6.1x66.9x28.4xTalendOW37.75701,158nmnm4.3x3.7xnmnmTeradataUW46.00345,59031.2x21.5x2.6x2.5x33.4x21.6xInfrastructureAvayaOW17.65212,0005.3x5.1x1.4x1.4x10.3x9.4xCitrixEW105.1211514,43917.2x15.7x4.7x4.5x14.8x13.7xMobileIronUW5.385628nmnm2.5x2.2x33.7x20.7xPivotalEW19.28235,640nmnm6.3x5.1xnmnmRed HatOW179.1216632,82146.3x40.0 x8.2x7.1x27.9x23.7xSolarWindsEW17.55185,40322.1x19.0 x7.5x6.7x16.9x15.0 xVMwareOW156.3016866,54223.5x20.9x6.9x6.3x18.5x16.8xP/EEV/SalesEV/FCFBarclays|U.S.Software 8 February 2019 6 ANAPLAN(EW/POS,PT$32)Downgrading to EW on Valuation,But Still Positive on Longer-term Thesis We like Anaplans fundamentals around its market positioning and long-term potential,but believe that valuation levels are getting stretched.We need a longer track record of execution to give management and the company the benefit of a best in class valuation multiple(currently trading at 11x CY20E Sales vs.9x for SaaS peers).On the quarter,Anaplan had a strong 3Q results out of the IPO gate,but this could also set-up unrealistic expectations for 4Q.We still expect a beat on conservative IPO numbers,but the size of the beat will likely moderate.While we are concerned in the short-term over valuation,longer term,Anaplan is in the early stages of a secular shift towards next-gen connected planning(see our initiation report for more information-Anaplan:Best of Breed in Next Gen Planning;Initiate at Overweight,11/6/2018).We downgrade our rating to Equal Weight(from Overweight),but increase our PT to$32 based on CY20E EV/Sales of 11x(from 10X).Billings Key to Track Progress:Anaplan is a true subscription product that is delivered over the cloud,so its billings number should be the best leading indicator of health.The street is estimating billings growth on a y/y basis to be+25%,a large step down from last quarters+43%growth.Since street numbers are still based off conservative IPO estimates,Anaplan should beat consensus estimates,but with a smaller outperformance than last quarter(Anaplan beat consensus billings by 18%last quarter).What to Look For on FY20 Guide:On revenue,consensus is expecting 29%growth in FY20E,a large deceleration from FY19E growth of 40%.While Services is being pushed out to VARs and should be a drag on growth,consensus numbers should be positively revised after earnings due to strong subscription growth.On margins,consensus is looking for 6 percentage point improvement on a y/y basis.Anaplan invested in non-quota carrying sales team in FY18 and this should create some leverage in FY20.While opex leverage and FCF burn matter,we think investors are more focused on revenue growth at this stage.Drivers to Make us More Positive:(1)Acceleration of subscription revenue growth,(2)major announcements around partnerships with VARs that would accelerate enterprise sales,(3)better visibility into customers using Anaplan for connected planning vs.disparate use cases(the largest competitive advantage that Anaplan has),and(4)net ARR moving materially above the low 120%range.We believe that these drivers would also warrant a valuation multiple to its SaaS peers.Barclays|U.S.Software 8 February 2019 7 FIGURE 3 Barclays Research vs.Consensus Estimates Anaplan$,mn Barclays Consensus Difference Barclays Consensus Difference 4Q 19 4Q 19 vs.cons.1Q 20 1Q 20 vs.cons.Total Revenue 63.4 63.2 0%66.7 66.0 1%Gross profit,non-GAAP 46.5 46.4 0%48.5 47.9 1%margin 73.4%73.4%72.7%72.5%Operating profit,adjusted(21.6)(21.7)(0)%(26.7)(24.6)8%margin(34.1)%(34.3)%(40.1)%(37.3)%Net income,adjusted(21.8)(22.6)nm(27.0)(25.6)nm EPS,adjusted(0.18)(0.18)nm(0.22)(0.21)nm Billings 81.5 82.03(1)%71.0 72.08(1)%Source:Barclays Research,Thomson Eikon Barclays|U.S.Software 8 February 2019 8 COUPA(EW/POS,PT$86)Tough Comps and Stock Run YTD Makes Us Uneasy into Q4 We view Coupa as a high quality business and a strategic asset within software.However,the recent run in the shares+47%year-to-date(vs.S&P 500 of+8%)combined with tough comps makes us nervous into the quarter as we see the 16x EV/CY20E Sales multiple as priced for perfection.It seems like the overall appetite for quality growth assets in software has picked up YTD and have since been fielding more and more calls from upbeat investors on Coupa and the payments opportunity.We believe this hype is the driver behind the recent outperformance in the stock.We look for more commentary on the payments opportunity on the call as we think it is necessary to support the shares at current levels.We are worried that current fundamentals do not warrant a high teens sales multiple.We raise our price target to$86(was$71)based on 15x EV/Sales(was 12x),but reiterate our Equal Weight rating as we wait for more colour on Coupa Pay.Tough Billings Comps:Coupa is facing a very tough comp from 4Q18 on billings(+51%y/y).We forecast billings of$107mn for the quarter(55%sequential growth)which we think is fair given that Coupa has achieved 54%q/q growth on average over the past three years in Q4.Looking at seasonality,we expect Q4 to account for 36%of FY billings,slightly lower than historical average of 38%.Spend Under Management In Focus:We track the sequential net adds in Cumulative Spend Under Management(CSUM)as a way to gauge incremental business from quarter to quarter.Q4 is the largest quarter for Coupa,and we look for a large uptick in CSUM.After a strong 3Q(+$95mn,the second largest quarter in history),we hope to see this trend go on as the company continues to scale.The company has added$65mn,$95mn and$100mn sequentially in the past three quarters,which were all nicely above their previous year net adds.We hope for a net add above$120mn.Looking for More Clarity Around LT Payments Opportunity:In order to get comfortable with current valuation leve