My Stock Portfolio Review, March 2024
Portfolio Review
Holdings:
1. $NET 12.1%
2. $CRWD 11.7%
3. $MNDY 11.4%
4. $DDOG 10.6%
5. $SNOW 9.5%
6. $ZS 9.5%
7. $TTD 8.1%
8. $MELI 6.5%
9. $TSLA 6.4%
10. $MDB 5.4%
11. $AXON 5.4%
12. $GTLB 3.3%
Monthly performance:
Monthly Allocations:
* green (added), orange (trimmed)
Historical performance (TWR):
2020: +110.8% (since 04.2020)
2021: +23.7%
2022: -59.6%
2023: +57.3%
Cumulative: +69.6%
A recap of my portfolio in 2024
January:
⬇️ Trim $ZS $CRWD $NET
⬆️Add $TSLA $TTD $MDB $AXON
March:
⬇️ Trim $NET $MNDY
✅ New position $GTLB ~3.1% (after -23% on ER)
Changes to the portfolio in March
Trimmed $NET and $MNDY positions to add a new position in $GTLB. GitLab's share price fell 23% after the quarterly report. I seized the opportunity to buy shares of the company at a discounted price, as it was on my watchlist, considering the drop in share price to be excessive.
Commentary on my holdings:
MongoDB $MDB:
The company published a quarterly report that disappointed the market, leading to a decline in the company's shares. Thoughts on the earnings report:
🟢Pros:
+ Revenue rose by +26.8% YoY; according to Q1 guidance, revenue growth will stabilize.
+ Atlas revenue grew by +34% YoY and comprises 68% of total revenue.
+ Net ARR Expansion remains at >120%.
+ The company is increasing margins and profitability.
+ Added 46 $1M+ ARR customers.
+ Beat Q3 revenue estimates by 5.8%.
+ Product releases such as Vector Search, Queryable Encryption, and the preview of Atlas Stream Processing.
🔴Cons:
- Weak FY and next quarter guidance.
🟡Neutral:
+- SBC/revenue is 28%, dilution at 3.8% YoY.
+- Weak number of customers added.
+- Total calculated Billings growth is accelerating to 22% YoY but is still slower than revenue growth.
Overall, in my opinion, the report was not as negative as the market perceived.
The company introduced several new products, and the rapid growth of Atlas is noteworthy.
Typically, a company will provide very conservative forecasts and then significantly exceed them. I have left my position unchanged and will monitor Atlas' growth and the addition of new clients in the next quarterly report.
CrowdStrike $CRWD:
The company published a strong quarterly report. Thoughts on the earnings report:
🟢Pros:
+ Revenue rose by +32.6% YoY.
+ RPO, total calculated billings, and ARR are growing faster than revenue.
+ Record Net New ARR added (+$282M, +28% YoY).
+ Customers are using more modules (5+, 6+, and 7+ modules +1pp QoQ).
+ Use of 8+ modules more than doubled.
+ DBNR stabilizing at 119%.
+ The company is increasing margins and profitability.
+ Beat Q4 revenue guidance by 0.6%.
+ FY guidance for 30.5% revenue growth.
+ Next Q guidance for 7.2% QoQ revenue growth.
+ Acquisition of Flow Security to improve capabilities in cloud data runtime security.
+ Advancements in its Falcon platform, including new AI capabilities, Falcon for IT, and Charlotte AI, accompanied by the flexible Falcon Flex.
🟡Neutral:
+- SBC/rev at 20.9%, dilution at 2.5% YoY.
The company's quarterly report is exceptionally strong.
CrowdStrike introduced several updates to its Falcon platform and announced the acquisition of Flow Security to enhance its capabilities in cloud data runtime security.
GitLab $GTLB:
The company published a quarterly report that disappointed the market, resulting in a decline in the company's shares. Thoughts on the earnings report:
🟢Pros:
+ Revenue rose by +33.3% YoY; according to Q1 guidance, revenue growth will accelerate.
+ DBNR at 130%, up from 128%.
+ The company is increasing margins and profitability.
+ RPO and Billings growth are accelerating and growing faster than revenue.
+ Added a record number of $100k+ and $1M+ ARR customers.
+ Added record Net New ARR; New ARR growth YoY was accelerated.
+ Introduction of new product, GitLab Duo, could contribute to future revenue growth.
+ The management team is strengthened by the experienced Sabrina Farmer, Chief Technology Officer.
🔴Cons:
- SBC/rev at 28%, dilution at 4.3% YoY.
🟡Neutral:
+- FY guidance missed estimates by ~1%.
+- Missed EBITDA guidance.
+- Beat Q4 revenue estimates by 3.7%.
Despite the market's negative reaction to the company's quarterly report, in my opinion, the report was strong and indicates the right direction for the company's business development.
With the forecast for revenue growth stabilizing for the next quarter, the company added a record number of large customers and net new ARR.
The company introduced a new product, GitLab Duo, and announced the strengthening of its management team.
I opened a starting position of 3.1% after the quarterly report but, considering the strong competition from GitHub, part of Microsoft, I do not plan to increase the position.
GitLab has also acquired Oxeye, a cloud-native application security, and risk management provider, to enhance its Static Application Security Testing (SAST) roadmap. Oxeye's technology offers automated security testing to identify and fix application-layer risks throughout the software development lifecycle, including tracing vulnerabilities from "code to cloud" with runtime context through various data analysis methods.
Zscaler $ZS:
The company published a quarterly report that disappointed the market, resulting in a decline in the company's shares. Thoughts on the earnings report:
🟢Pros:
+ Revenue rose by +35.4% YoY.
+ DBNR at 117%.
+ Strong customer growth with $1M+ ARR added: +29.
+ The company is increasing margins and profitability.
+ Beat Q4 revenue guidance by 3.6%.
+ Raised FY guidance by 1.0%.
+ RPO growth is stabilizing.
+ Introduced a new product, Breach Predictor, which will contribute to future revenue growth.
+ The management team is strengthened by the experienced Mike Rich, Chief Revenue Officer, to improve the go-to-market strategy and achieve the goal of $5 billion ARR.
🟡Neutral:
+- SBC/rev at 28%, dilution at 3.1% YoY.
+- Weak Net New ARR added: (+113, -12% YoY).
+- Q1 guide: +2.1% QoQ, revenue growth is still slowing down.
+- RPO and billings are growing slower than revenue.
The company's report was underwhelming.
Zscaler provided a weak forecast for the next quarter, and growth in RPO and billings was significantly lower than revenue growth, although deferred revenue growth is higher than revenue and billings growth, which suggests the situation may not be as dire as it appears.
The company added a number of large $1M+ clients at the level of last year, which also suggests that the situation may not be as negative, but did not provide data on $5M+ clients.
Zscaler introduced, in my opinion, an important product, Breach Predictor, and strengthened its management team.
I'll be watching for RPO and billing growth and client additions in the next quarter.
Snowflake $SNOW:
Snowflake and $NVDA Forge Strategic Partnership: Unleashing GPU-Accelerated Computing via Snowpark. This move is set to empower developers and data scientists alike, enabling them to leverage the unparalleled processing power of NVIDIA GPUs effortlessly through Snowflake's platform, thereby enhancing computational efficiency and fostering advancements in a wide array of fields.
Snowflake $SNOW at the Morgan Stanley Technology Conference: Sridhar Ramaswamy's extensive background at Google, with experiences in ads, commerce, and launching Google Pay, positions him as the ideal leader for Snowflake's next phase.
Iceberg tables allow Snowflake to support open table formats and potentially attract new workloads. While transitioning may initially reduce storage revenue, it opens up new data querying opportunities, leading to increased compute usage over time.
In my opinion, Sridhar Ramaswamy is a truly promising leader for the company with an extensive background.
Iceberg tables, although they may put pressure on revenue growth in the short term, should result in increased revenue growth and a stronger competitive position in the long term.
In my opinion, the company gave a conservative forecast for revenue growth, so I left my position in the portfolio unchanged, but I will monitor how much the company beats its forecast for revenue growth in the next quarter. Adding customers and increasing RPO is also important.