Lost Analyst

Generalist, fundamental, buyside analyst, trying to learn stock-picking

[Lost Analyst @lost_analyst]

@tbo1789 Potentially the difference here is on our time horizon differences. My thinking is budgets get pressured into the MT but migrations and long sales cycles make this okay for the moment

[Lost Analyst @lost_analyst]

@tbo1789 Let's not get tangled in personal attacks here. The key point here is that IT budgets are finite and will get reprioritized and SAP's product offering isn't great here. Moat is at best stable. Think r/r still makes sense from here though

[Lost Analyst @lost_analyst]

@tbo1789 Because SAP is forcing them to accelerate migration and the deadline has been pushed back already. The upsell path is much tougher from here given much more mission-critical IT spend (AI, cyber) is taken precedence

[Lost Analyst @lost_analyst]

@tbo1789 IT budgets still impact upsizing/migration timelines and these will probably be pushed back, implying lower growth. Value in these systems accrue at the UI layer and agentic systems on top will capture most value. I'm not sure SAP has strong pricing power on APIs on costumer data

[Lost Analyst @lost_analyst]

@SamKovX Have you thought about differences in cash flow profile in valuing these companies ? Most of Melrose’s profits are just accounting pull forward.

[Lost Analyst @lost_analyst]

@italianinvesto It's cheap for a very good reason: cash generation is nowhere near accounting profits, and the business seems lower quality than peers. But maybe it's cheap enough!

[Lost Analyst @lost_analyst]

@FIGfluencer @finphysnerd How come?

[Lost Analyst @lost_analyst]

@origoinvest Ooh my bad, sorry

[Lost Analyst @lost_analyst]

@origoinvest They have a bunch of P&W engines on their BS. It’s what hurt their development, especially in the Middle East

[Lost Analyst @lost_analyst]

@evrgn11112231 Good to know! Toughest part here is to disprove the terminal value debate on these. Think the move is overdone on some of the space, but terminal value debate is always hard to win as a bull.

[Lost Analyst @lost_analyst]

@evrgn11112231 All fair points. I'm closer to the enterprise space, but my feeling is that mid-market competition is going to increase substantially given faster product shipping and new entrants offering better, AI-native, solutions.

[Lost Analyst @lost_analyst]

@evrgn11112231 I think the other relevant point is that migration costs are plumetting right now i.e. these new entrants are promising very rapid migrations meaning that these solutions are much less stickier than in the past meaning you need to have a (very) good product to compete.

[Lost Analyst @lost_analyst]

@evrgn11112231 That's the whole debate. Will they be able to integrate these features in a way that works sufficiently well to maintain market share given increased competition? I'm really not sure given the track record of legacy tech cos adapting to disruption

[Lost Analyst @lost_analyst]

@evrgn11112231 On the right to win, I just think legacy providers continue to struggle to integrate new functionalities in a way that really drives productivity gains because of technical debt and bloat. These players have the advantage of building from scratch in this new paradigm

[Lost Analyst @lost_analyst]

@evrgn11112231 There are a few, like Rillet and Campfire.
Their key selling point is on automating financial closes and general accounting via agents. It all sound wishy washy but it does seem like there are major time savings when you do so.

[Lost Analyst @lost_analyst]

@evrgn11112231 I see a real risk that AI native players gain a bunch of market share on the accounting side for SMEs. Churn accelerates and all of a sudden it’s really not growing. AI startups are shipping incredibly quickly for a product that’s not that complicated. No view on the tax side.

[Lost Analyst @lost_analyst]

@TechFundies It’s great for historicals and stock prices, less for estimates. Would probably need VA to get the best estimates

[Lost Analyst @lost_analyst]

@IggyOnInvesting Debt is super high and there's a real risk of demand falling off a cliff?