Wandisco Share Discussion Threads

[owenski] 29/4/2019 07:46

I'm not surprised, I've questioned the valuation here for some time. The recent figures didn't justify such a rating.

[bamboo2] 29/4/2019 07:37

Bought a few sub 500.
H&S pattern completed to target.
Price has filled Breakaway gap 14/2/2019, 516-552

[tickboo] 29/4/2019 07:14

Wow 14,000 sold at 86p a share less than the recent raise.

[tickboo] 29/4/2019 07:06

Wow that's a battering.

[tickboo] 26/4/2019 13:56

Microsoft Stock Is No Longer a Dark Horse in Race for JEDI ContractMSFT has improved its cloud unit, leaving MSFT stock well-positioned to benefit from a JEDI winBy Luce Emerson, InvestorPlace Contributor Apr 8, 2019, 2:26 pm EDTIf you had asked almost anyone a year ago which stock would benefit from the Pentagon's $10 billion, 10-year JEDI cloud contract, chances are Amazon.com (NASDAQ:AMZN) stock would have been the pick. No contest.Amazon Web Services (AWS) has been the indisputable leader in cloud-computing services. Microsoft Corporation's (NASDAQ:MSFT) Azure has held the number two spot, while Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) has been a distant third place. However over the past 12 months, Microsoft stock has made some substantial gains as it demonstrates it's a force to be reckoned with when it comes to cloud services.MSFT has noticeably not been part of the popular FAANG stocks, signaling the general public's sentiment that it is not "new" tech, and that it represents something old and stodgy. But ever since Satya Nadella became MSFT's CEO, taking the helm from Steve Ballmer, Microsoft stock has performed remarkably well. Part of that has to do with overall ebullience over the tech sector, but a good chunk is due to Nadella's reorganization and focus on steering MSFT into the futureIncreasingly, it has become clear that Microsoft will not be left behind like some of the high-flying companies that fell from grace during the Dot Com Boom (and Bust).AMZN may continue to disrupt every high-margin industry it can and it will no doubt continue to dominate headlines. But when it comes to the JEDI contract, it may well end up being Microsoft that takes the whole enchilada. Microsoft stock would then inevitably be re-rated upwards.The JEDI ContractThe Department of Defense is looking to build an enterprise cloud. The contract is a winner-take-all situation, which the DOD believes is best because it "improves security, improves data accessibility and simplifies the Department's ability to adopt and use cloud services."Recall that in 2013, AMZN won the coveted $600 million contract to develop a cloud for the Central Intelligence Agency (CIA). It was a deal met with suspicion by the intelligence community, which is extremely sensitive to risk. Nothing screamed risk like teaming up with a publicly-traded commercial company, but as one former intelligence official was quoted as saying, "we decided we needed to buy innovation."Times Are ChangingRecently, MSFT won an almost $2 billion contract for the U.S. military.Last May, the Department of Defense extended its agreement to use Microsoft's Azure Government, Office 365, and Windows 10. Over "10 million government customers from every federal cabinet level, including the Department of Defense" rely on existing Microsoft services, in particular Cloud for Government.So, MSFT clearly has a strong relationship with the Department of Defense, and that could give it a leg up in snagging the JEDI contract. By winning that deal, MSFT could propel MSFT stock to a valuation closer to 35 or 40 times its earnings, versus Microsoft stock's current level of around 28 times.The Bottom Line on Microsoft StockMSFT will certainly leverage its decades-long relationship with the Department of Defense to secure the lucrative JEDI deal. Even Wedbush Securities analyst Dan Ives indicated that Microsoft has a 40% chance of winning over AWS, up from his previous estimate of 20%. It's far from a sure thing, but MSFT has improved its Azure Government cloud (which is now certified to handle classified information) and looks very competitive.Even if Microsoft isn't able to win the JEDI contract, it's clear that it would be a top contender for future billion dollar deals to come, since AMZN is no longer the go-to cloud vendor for the government.As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities.

[horneblower] 25/4/2019 17:51

I can't help thinking they jumped the gun with moving to a subscription pricing methodology.
I don't fully understand what service they actually supply to their customers but it seems that they facilitate the move from "land" based to "cloud" based datasets guaranteeing the continuation of realtime availability with no outages of service.
Perhaps they do much more than that but if that's what they offer I would be reluctant to pay on a subscription basis if I were a potential client. If it's a one off service it deserves a one off payment.

[tickboo] 25/4/2019 14:53

I see your point but I think the IIs who bought in can see the potential here in what is a fast growing space and where major cos are growing fastest with good margins. They need to produce this year and going for an 80% increase in revenues may be stretching it.As far as the deal goes we don't know that the end user and cloud vendor are still looking at the requirements so it's a moving feast. You're right though, the quicker it's resolved the better. I imagine if they do sign the deal when it's announced there'll be a significant gap up which won't get filled. Here's hoping but jam tomorrow will wear thin come YE. If they did $4m in Q1 you'd hope they manage 50% on that but they may struggle as the action is in H2. As well as lots of small, recurring wins they'll need some big ticket one offs and for existing clients to spend more.

[asagi] 25/4/2019 14:39

every day that this major cloud supplier goes without signing a deal with WANDisco is another day that they are getting by without their great product. That's not good for pricing in a negotiation.

The company seems to be one of those charmed enterprises (like Ocado) that always seems able to secure substantial equity raises without demonstrating a successful business model first.

Asagi (no position)

[nimbo1] 24/4/2019 20:37

microsoft - fantastic results on back on cloud...

[nimbo1] 24/4/2019 18:16

Given US support for scaleable enterprise cloud solutions which run at loss for years raising money will be no issue...in the US, if they need it. Once they do their big deal I would have thought its off to the states to sell the dream...not worry the little old UK market that cares about things like PE's and profit ; )

[jackdaw4243] 24/4/2019 15:26

Martin

Yup

Unless some big sales come in they run out of money at the rate they are spending, that leaves a few options, Banks, Cash Call, More shares or a package restructuring.

[tickboo] 24/4/2019 15:18

They've been banging on about this deal since last year so it must be by far the biggest yet with decent recurring revenues as it's been mentioned time and time again. I'd suggest it's needed to hit FY forecast.

[owenski] 24/4/2019 15:14

The share price hasn't tanked and has recovered somewhat, suggests the market is still supportive of the story but has a show me the money stance - maybe.

[nimbo1] 24/4/2019 15:07

Well I bought a few back at 6 or so just now, haven't held for quite a while. If what management say is true the inflexion point for growth must be in the next 12 months and the large deals talked about on this board by you mostly tick boo must start arriving this calendar year.

[tickboo] 24/4/2019 14:58

Pretty much spot on although they'll still have some big ticket deals but the focus is on recurring cloud revenues that grow over time. Long term gain for short term pain.The share price has recovered well and those selling first thing for under the raise will be kicking themselves.

[martinmmcc] 24/4/2019 14:24

Someone correct me if I am wrong here, but the fact that wand is changing to recurring revenue, will by its very nature reduce revenues in the short term. Instead of having big fees paid up front, instead it's smaller chunks annually. Or am I missing something? Thanks for an feedback

[tickboo] 24/4/2019 13:57

I like this -Strategic progress should lead to improving financials in FY19. The company indicates that negotiations for an expanded deal with a large cloud player are ongoing and traction with Google Cloud, the only platform yet to generate significant revenue for WANdisco, is improving. We believe the strategic progress achieved in FY18 should see revenue growth accelerate to 84% in FY19. Growth of 38% in Q1FY19 (up from 13% in H2FY18) suggests this reacceleration is on track and securing a strategic deal with a major cloud provider could deliver all the incremental revenue required to meet this forecast at a stroke. There is no certainty this deal can be closed however and with subscription revenue ramping but still at a relatively low level, visibility remains limited. It must be some deal they've been in long talks about!securing a strategic deal with a major cloud provider could deliver all the incremental revenue required to meet this forecast at a stroke

[bg23] 24/4/2019 13:54

the most pertinent part of todays update:-

Setting out the medium-term opportunity

For the first time management has formally set out its financial ambitions. It believes WANdisco can generate $100m+ in annual recurring sales within three to four years (implying a 50%+ CAGR). Growth will initially be driven by the replication of data migrating to the cloud but will increasingly reflect the need to support hybrid and multi-cloud strategies.

[volsung] 24/4/2019 13:44

Bought a few more at 567p. Hopefully with the results out of the road it’s oneards and upwards

[bg23] 24/4/2019 13:40

hxxps://www.edisongroup.com/publication/set-for-a-re-acceleration/24000


WANdisco made substantial strategic progress in FY18, deepening both its partnerships with major cloud providers and broadening its product base. With discussions over a strategic deal with a major cloud vendor still ongoing and FY19 off to a good start (Q1 revenue up 38% y-o-y), we leave our forecasts largely unchanged. In our view its exceptional growth prospects and potential strategic value justify a premium rating.











Year end

Revenue ($m)

EBITDA*
($m)

EBIT*
(US$m)

EPS
(c)

EV/sales
(x)

EV/EBITDA
(x)


12/17

19.6

(0.6)

(7.5)

(19.4)

16.1

N/A


12/18

17.0

(9.4)

(16.3)

(37.5)

18.6

N/A


12/19e

31.3

0.7

(6.3)

(14.4)

10.1

463.9


12/20e

40.7

6.2

(0.8)

(2.0)

7.8

51.4






FY18: Substantial strategic progress

Lacklustre financials do not tell the full story of WANdisco’s FY18, with revenue down 13% y-o-y and adjusted EBITDA losses widening to $9.4m. In the last year it signed partnership deals with Alibaba Cloud and Microsoft Azure and has been designated an ATP at Amazon AWS. Its partnerships now cover five of the top six cloud-platform providers and over 60% of the market. It also extended its longstanding partnership with IBM to include structured data.


On track for an inflection in FY19

Strategic progress should lead to improving financials in FY19. The company indicates that negotiations for an expanded deal with a large cloud player are ongoing and traction with Google Cloud, the only platform yet to generate significant revenue for WANdisco, is improving. Sales in Q119 rose 38% y-o-y and a large part of this growth is now being driven by subscription revenue. Our FY19 forecasts (largely unchanged) imply 84% revenue growth (see Exhibit 1).


Setting out the medium-term opportunity

For the first time management has formally set out its financial ambitions. It believes WANdisco can generate $100m+ in annual recurring sales within three to four years (implying a 50%+ CAGR). Growth will initially be driven by the replication of data migrating to the cloud but will increasingly reflect the need to support hybrid and multi-cloud strategies. Our FY20 forecast implies 30% y-o-y growth.


Valuation: Growth and strategic value justify premium

The current share price implies a 7.8x FY20e EV/sales multiple, a DCF factoring in a 25% sales CAGR and an EBIT margin of 44% by FY30. Achieving this demands strong execution but is deliverable given market trends. The recent flurry of M&A activity also supports a premium rating. IBM’s bid for RedHat (9.7x LTM sales) shows that big players will pay for rapidly growing ‘cloud’ assets; the Attunity and CloudEndure deals highlight the specific strategic value placed on data replication technology.




Changes to forecasts







Changes to forecasts

We make modest changes to our FY19 forecasts at this point. We believe the strategic progress achieved in FY18 should see revenue growth accelerate to 84% in FY19. Growth of 38% in Q1FY19 (up from 13% in H2FY18) suggests this reacceleration is on track and securing a strategic deal with a major cloud provider could deliver all the incremental revenue required to meet this forecast at a stroke. There is no certainty this deal can be closed however and with subscription revenue ramping but still at a relatively low level, visibility remains limited. Our forecasts imply modest positive adjusted EBITDA is achieved in FY19.

We introduce an FY20 forecast that implies 30% y-o-y growth, below the 50%+ CAGR implied by the ‘medium-term’ opportunity set out by the management, but in line with the growth of the broader cloud market.

[tickboo] 24/4/2019 12:11

Can't disagree with another $26m in 3 Qs being unlikely. As well as recurring revenues they'll still have some chunky deals like the ones being RNS'd with a smaller portion being recurring but for the most part they'll go for smaller, recurring jobs increasing in value over time as their data does. DR mentions in the presentation that they are developing new products with strategic customers (I assumed he meant end customers not partners but am unsure) that will increase their reach. No mention of how the SQL IBM product is doing, traction etc? They need a lot of overall traction as $17m to $30m is over 75% and they managed a 38% increase in Q1 17 which was a poor Q so they certainly need to up the ante.

[jackdaw4243] 24/4/2019 11:17

Yup $4 mln

My understanding is that the new income model makes $30 mln highly unlikely based on Q1, if the do achieve $30 mln of recurring revenue the the share price would take off.

[tickboo] 24/4/2019 10:16

Unfortunately $4m not £4m but yeah burning cash which is why they raised money which I didn't think would happen. I'd be surprised if they got to $30m this year but who knows that may do so if the strategic deal comes in. If it doesn't come in I'd be shocked if they hit it.The presentation is on the website, worth a gander/listen.

[jackdaw4243] 24/4/2019 10:09

Saying revenue is up 38% is correct but £4 mln for Q1 will not cover the cost of operating expenses.

Oh dear what a bummer

[tickboo] 24/4/2019 09:35

So --- Revenue for the year of $17.0 million (2017: $19.6 million) with H2 revenue increasing 13% to $11.3mWe know that Q1 19 is $4m and 38% up on Q1 18 which was therefore $2.9m and H2 was $11.3m so we know Q2 was $2.8m so a flat Q2. Momentum certainly in H2 and we'd expect with multi-cloud product, closer ties with Azure, AWS and IBM momentum to continue and recurring revenue model should also help. That said to hit forecasts they need another $26m in revenue which is a tall order! Let's hope Q2 is up on Q1 19 and H2 is 50% or so higher than H2 18. A lot of work to be done but they're hiring in areas (below) to enable growth here's hoping the raise money is spent well and they get near to $30m as the Edison note estimates. Director of Partner Solutions - Responsible for technical delivery of partner strategy. AWS, Microsoft Azure, Google Cloud, Alibaba Cloud etcDirector Partner Alliances - Responsible for expanding channel reach and execution of GTM strategy with Strategic Partners. In depth partnership management in cloud and sales execution experience required.