We use Viewer and its Query Insights feature to highlight Smartsheet (SMAR), a recent IPO bucking the trend in the Technology sector. We dive into the sentiment to understand if SMAR is a one-off or a sign of things to come for Tech.
Concerns over Fed policy, global trade, and slowing growth have sapped investor confidence heading into year-end. We take a break from the Macro panic room and use Amenity Viewer to dive into an earnings analysis highlighting a positive trend from a recent software IPO: Smartsheet (SMAR).
In its third quarter as a public company, Smartsheet’s earnings call on 12/3 received an Amenity Score of 73, up from 51 last quarter. For context, the average Amenity Score on earnings calls across all sectors over the last month is 22, so the data is also indicative of broad-based strength in Software. As shown below, that was the highest score in the Software sector over the last month.
With the Amenity Viewer, the score is just the starting point, so we dig into the text of the earnings transcript to identify what is behind the strong overall numbers. First, a quick look at the Key Drivers reveals a stark lack of negative earnings sentiment highlights in the document. Then, in just a few clicks through the Guidance and Market Position categories, two positive trends become apparent that are critical indicators for a SaaS company:
The common theme to the few negative earnings sentiment highlights in the call was cash flow, which is common for a SaaS company of Smartsheet’s size. If the two positive trends above are sustained, free cash flow often takes care of itself as a company scales:
Using Viwer's Query Insights feature allows us to perform earnings sentiment analysis across a broader sector where we see other mentions of accelerating bookings within the Software sector at Workday, Rapid7, and PTC:
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This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.
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