Fed Reaction and the (Re)-Rise of SaaS

The Razor’s Edge

Last week's Fed meeting played to expectations - slightly tougher talk, limited changes in policy. The market's reaction was to pile back into the Covid winners, which meant SaaS stocks among others.

So for today's episode, we follow up on our Fed discussion from last week, talking their decision and the market and media reaction. We then move over to the SaaS sector, our regular field. We break down three companies in detail – Zoom, PagerDuty, and Workday. We finish off with thoughts about the growth hangover that might plague COVID winners generally.

Topics Covered

• 2:30 minute mark – Our Reaction to the Fed meeting
• 6:30 – The market and media reaction to the Fed meeting, and the difference between the health crisis and the market crisis (or reaction thereto)
• 17:30 – The analytical challenge for investors and the Fed, with the housing bull market as an example
• 23:30 – The crowding effect in the markets
• 32:30 – Shift to SaaS – Hasn’t ZM grown into their multiple and what does 2022 look like?
• 45:30 – PagerDuty – No surprises; the billings; Atlassian and Everbridge; multiple expansion
• 53:30 – Workday – Why the outlook lines up better for them than many SaaS peers – winning the finance office
• 58:30 – The distinction between Workday’s or PagerDuty’s customer base and Twilio’s or Zoom’s
• 1:09:30 – Growth hangover for Covid winners – THO as an example – and for the investors holding them

(Note: Daniel is long DBX as well as PD/THO, that disclosure was accidentally omitted from the recorded disclosure).