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r/valueinvesting
Can we talk about Netskope
Investor summaryBullish
Author highlights Netskope's post-IPO price drop, positive FCF, and cheap valuation, while questioning SBC risks.
Bull points
- Stock dropped significantly post-IPO (from $19 to <$9), offering a 50% upside to the $14 analyst price target.
- Generated positive free cash flow this quarter, with non-GAAP profitability expected soon.
- Trades at cheap valuation multiples, appealing to value investors.
Bear points
- GAAP profitability was negatively impacted by stock-based compensation (SBC) vesting post-IPO.
- High SBC makes the author nervous, potentially diluting shareholders.
Post body
I believe there are no recent active threads on Netskope.
It's an AI cloud security firm, with proprietary enterprise tools, headed by Sanjay Beri, recently IPO'd at $19 and is available below $9, most analysts have a buy call on it, with average price target of $14, that's a 50% upside
Mkt Cap 3.6 Bn
FCF positive this qtr, GAAP profitability took a hit because of the SBCs vesting post IPO
Non GAAP profitability around the corner
Pretty cheap valuation multiples, juicy pick for r/valueInvesting audience I believe
What am I missing, apart from the SBCs making me nervous? Does anyone from the industry care to share?
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