3 US listed tech stocks on a higher note this year

  • Jun 21, 2020 AEST
  • Team Kalkine
3 US listed tech stocks on a higher note this year

Summary

  • Slack has reported record results in 1QFY21. It has also signed a multi-year agreement with Amazon Web Services for additional collaboration between the two businesses.
  • Atlassian expects to report revenue between $1.58 billion to $1.6 billion in FY20.
  • ServiceNow has experienced strong take-up of its newly launched app for the management of COVID-19 infections at workplaces.

Technology continues to play an important role in businesses and productivity. And, some technologies have seen tailwinds arising out of the COVID-19. Better managed businesses are turning crisis into opportunities to deliver value to the customers.

Since March sell-off, the technology companies have been marching higher. NASDAQ Composite index also reached its lifetime high close of 10,020.35 points on 10 June 2020, after which there has been some consolidation in the markets.

In the US, these three companies under discussion have been attracting investor attention after the March sell-off.

Slack Technologies, Inc. (NYSE:WORK)

Channel-based messaging system, Slack is used by businesses to align their teams and systems, their business as usual operations. Its systems are scalable with the largest organisation in the world for people connectivity, bridge systems, tools, and software. It could replace the use of email in organisation, and perform various tasks, including disaster management, reviewing job candidates, and negotiating budgets to name few.

Earlier this month, the company announced a new multi-year agreement with Amazon Web Services (AWS), a company of Amazon.com. Under the agreement, Slack will deliver solutions for an improved enterprise workforce collaboration.

The company would enable migration of Slack Calls feature to Amazon Chime that includes voice and video call capability. Slack also uses AWS for its range of cloud services, enabling to build new collaboration features.

 

WORK YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

WORK YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

 

It would also undertake the integration of AWS Chatbot with Slack. Despite being a new product, the chatbot is being used by thousands of teams across the world. Now chatbot service would include a host of service of AWS for developers.

Also, in June, the company has announced record results for the first quarter ended 30 April 2020. In 1Q FY21, it reported total revenues of $201.7 million, up by 50% over the previous year. Its GAAP-based gross profit was $176 million, reflecting a gross margin of 87.3%.

Slack recorded net loss per basic and diluted share of $0.13 based on GAAP, but its Non-GAAP based net loss per share was $0.02.

In the second quarter, it expects total revenue between $206 million to $209 million. Non-GAAP net loss per share is expected in the range of $0.04 and $0.03, assuming ~564 million shares outstanding.

In FY21, Slack has revenue guidance of $855 million to $870 million, and net loss per share between $0.19 and $0.17, assuming around 567 million shares outstanding. It expects free cash flow to be between -$20 million to $0.

On 18 June 2020, WORK last traded at $ 34.22.

Atlassian Corporation Plc (NASDAQ:TEAM)

Mike Cannon-Brookes and Scott Farquhar of University of New South Wales founded Atlassian early in this century. Atlassian is registered and incorporated in the United Kingdom with its registered office in London, UK. Its principal offices are located in Sydney, Australia and San Francisco, California. It has a range of software products that allow businesses to discuss, organise and deliver the work.

In late April, the company reported third quarter fiscal year 2020 results for the period ended 31 March 2020. Its total revenue for the period was $411.6 million, up by 33% compared to the previous corresponding period (pcp).

IFRS-based operating loss for the period was $19.9 million against operating loss of $27.1 million in the pcp. Net loss for the period was $158.8 million against a net loss of $202.8 million in the previous corresponding period.

 

TEAM YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

TEAM YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

 

Atlassian recorded a loss for the period due to non-cash charge of $141.8 million, arising out of marking to fair value of its exchangeable senior notes and related capped calls. It recorded a similar expense of $172.6 million in the same period last fiscal.

At the end of period, it had $2.1 billion in cash and cash equivalents and short-term investments. In 3QFY20, the company generated free cash flow of $140.3 million at a margin of 34%.

The company expects revenues to be in the range of between $1,584 million to $1,599 million in FY20. IFRS-based gross margin would be around 83% and 86% on a non-IFRS basis.

Likewise, Atlassian anticipates IFRS-based net loss per diluted share to be in the range of $0.08 and $0.02, but non IFRS-based net income per diluted share would be between $1.06 and $1.12.

On 18 June 2020, TEAM last traded at $ 177.63.

ServiceNow Inc. (NYSE:NOW)

On last Thursday, a month after ServiceNow launched its Safe Workplace apps, it reported that around 400 customers across jurisdictions are using the apps to be able to get back to work safely. Some of the companies that using the apps includes Coca Cola European Partners, BankUnited, AmeriGas, and Uber.

 

NOW YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

NOW YTD Price to 18 June 2020, USD (Source: Thomson Reuters)

 

The company remains committed to helping its clients get back to work safely. It estimated the application could allow businesses to deliver $1 million of labour productivity for every 10,000 employees.

On Thursday, it also released a new contact tracing application, which allows employers to keep the workplace safe by identifying employees that could be exposed to the virus based on workplace data.

After identification, the application allows considering necessary protocols, including sanitisation, case management, closures, and, it depicts the risks of keeping the workplace open by evaluating exposure trends and workplace dashboard. Safe Workplace apps now support eight languages.

On 18 June 2020, NOW last traded at $ 401.03.

(All currencies in USD, unless or otherwise stated.)

 


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