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摩根士丹利_全球_科技行业_软件业:追赶SaaS_20180918_29页

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valuation. At the same time, we think entry into the SFA market via the Base acquisition, combined with former Intel global partnership executive Ricardo Moreno coming in to drive the partner strategy, as well as an overall strong execution across the internal sales organization, could drive 2020 revenue above $1B, which becomes our bull case. As our forward estimates move up across the board, we now see our new bull/bear setting up an attractive 2:1 risk/reward skew. At the same time, we see further upside from current levels to our new $84 base case, keeping us OW. (Zendesk, Inc: Base Acquisition Makes $1B the Base Case) YEXT: Execution Deserves a Higher Multiple (Remain EW): We put our YEXT valuation and model under review post Q2 earnings (see Yext Inc: 2Q19 Results: Two in a Row (31 Aug 2018)), and after taking time to really dig into the story we continue to see a very attractive addressable market along with significantly improved sales execution, both of which already appear to be priced into the stock, leaving us EW. After a mixed FY18, Yext got off to a strong start in FY19, with consecutive quarters of outperformance on revenue and profitability, continued enterprise momentum and a notable partnership with Amazon Alexa announced in July 2018. Altogether, this has driven relative outperformance in YEXT shares, which are up +87% YTD vs. SaaS peers up +74%. Looking ahead into 2H, we see a sales force with improving productivity starting to execute to the enterprise opportunity, which gives us greater confidence in upside to our estimates. We raise our near and long-term estimates, which brings our PT up from $15 to $26, but remain EW the shares as we see the stock already pricing in much more consistent sales execution and better profitability. Our new PT is based on a 15-year DCF, which implies on a relative basis a multiple of 8.8x EV/CY19 Sales and 0.27x growth-adjusted vs the broader SaaS peers at 0.37x, a discount we think is appropriate given near-term profitability profile. SEND: Making Email 'Sexy' (Remain EW): After flying under the radar for most of 2018, consecutive beat/raise quarters on the back of sustained 30%+ growth in its core Email API business and continued adoption of the emerging Marketing Campaigns product have helped to drive SEND shares +28% higher over the past 3 months vs. SaaS peers +11% over the same period. More importantly, management struck a very positive tone around the regulatory impact of GDPR on their Q2 earnings call in August, noting possible tailwinds in helping customers remain compliant and assuaging investor concerns of a long-term secular headwind as contact lists are culled. Our forward estimates move higher, bringing our PT up from $29 to $37. However, at current trading levels we consider SEND to be fairly valued and see limited upside to our revised PT, which is based on a 15-year DCF and on a relative basis implies 9.7x EV/CY19 Sales and 0.37x EV/Sales/Growth, in line with SaaS peers growth adjusted..2YEXT: Execution Deserves a Higher Multiple After a mixed FY18, Yext got off to a strong start in FY19, with consecutive quarters of outperformance on revenue and profitability, continued enterprise momentum and a notable partnership with Amazon Alexa announced in July 2018 (see Alexa, Find My Business (25 Jul 2018)). Altogether, this has driven YEXT shares up +87% YTD vs. SaaS peers up 74%. Looking ahead into 2H, we see a sales force with improving productivity starting to execute to the enterprise opportunity, which gives us greater confidence in upside to our estimates. We raise our near and long-term estimates, which brings our PT up from $15 to $26, but remain EW the shares as we look for more consistent execution on topline and profitability. Our new PT is based on a 15-year DCF, which implies relative valuation multiple of 8.8x EV/CY19 Sales and 0.27x growth-adjusted vs the broader SaaS peers at 0.37x, a discount we think is appropriate given current unit economics and long-term potential profitability levels (see Exhibit 2). Raising Long-Term Estimates and PT: With improving sales productivity and op margins YTD, our FY19 revenue estimate moves up by 1% to $228M, while better than expected profitability moves our full year op margin ~40 bps higher to (18.0%). Our FY20/FY21 revenue estimates also move higher by ~2%, while our long term CY33 revenue forecast now assumes 25% CAGR (up from 23%) over the next 15 years to reach $6,786M. Our long-term operating margin estimates also move up 100 bps to 15% by CY33, which takes our FCF estimate up from $571M to $933M. Our revised $26 PT is supported by a 15-year DCF on higher FCF estimates after applying a 3.0% terminal growth rate and 10.6% WACC. This implies a 8.8x CY19 EV/Sales and 0.27x growth-adjusted multiple vs. the broader SaaS peers at 0.37X, a discount we think is appropriate given current and long-term potential profitability profile. Exhibit 1:Changes to Long-Term DCF Estimates MS New CY33 ModelMS Old CY33 Model Revenue, CY33e (M)$6,786$4,856 CY18-33e Rev CAGR25%23% Implied TAM, CY33e (M)[2]$14,845$14,845 % YEXT Market Share, CY33e45.7%32.7% Op Margin, CY33e15%14% Free Cash Flow, CY33e (M)$939$571 Share Count, CY33e (M)166175 WACC10.6%10.6% Terminal Growth3.0%3.0% EV/Sales/Growth0.27x0.16x EV/CY19 Sales8.8x5.2x 12M Forward Price Target$26$15 Source: Company Data, Morgan Stanley Research Estimates3Exhibit 2:While Improving Profitability, Our Estimates Show Yext's Ratio of Lifetime Value to Customer Acquisition Cost (LTV/CAC) of 3.3X Remains Below Peer Average at 6.9X 0x 2x 4x 6x 8x 10x 12x 14x 16x 18x VEE V WD AYAPPFNOWZSELLISENDPFPT QTW ORP MD SO SM ARPSINST Ave rageZENCOUPFIVNMDBRNG Me dian SOP H-L N CLD R CBL K APP NCRM NEW RWK GDD YZUO DOC UMB HUB S QLY S SHO P YEX T EGH TRHTBOX 2017 LTV/CAC Source: Company Data, Morgan Stanley Research Estimates Exhibit 3:Model Changes FY17FY184/187/1810/18E1/19EFY19EFY20EFY21E New Subscription Rev124.0169.650.954.958.163.0227.0298.3385.5 YoY Growth38.2%36.8%37.8%35.1%31.4%31.7%33.8%31.5%29.2% Old Subscription Rev124.0169.650.953.758.062.8225.4292.9376.6 YoY Growth38.2%36.8%33.2%32.3%31.2%31.0%31.8%30.2%28.6% % Change0%0%0%2%0%0%1%2%2% New Total Revenue124.3170.251.155.158.363.3227.8301.0390.8 YoY Growth38.5%37.0%37.8%35.1%31.6%31.8%33.9%32.1%29.8% Old Total Revenue124.3170.251.153.958.363.0226.3295.6381.9 YoY Growth38.5%37.0%33.2%32.4%31.3%31.2%32.0%30.8%29.2% % Change0%0%0%2%0%0%1%2%2% New Operating Income(32.9)(44.3)(10.0)(10.2)(12.3)(8.4)(40.9)(41.7)(38.4) New Operating Margin-26.4%-26.0%-19.6%-18.5%-21.2%-13.2%-18.0%-13.9%-9.8% Old Operating Income(32.9)(44.3)(10.0)(11.1)(10.5)(10.1)(41.7)(41.9)(38.5) Old Operating Margin-26.4%-26.0%-19.6%-20.6%-18.1%-16.0%-18.4%-14.2%-10.1% % Change0%0%0%-8%17%-17%-2%-1%0% New Non-GAAP EPS(1.11)$(0.47)$(0.11)$(0.10)$(0.12)$(0.08)$(0.41)$(0.39)$(0.35)$ Old Non-GAAP EPS(1.11)(0.49)(0.14)(0.13)(0.11)(0.10)(0.47)(0.48)(0.45) New Total Billings145.4202.645.558.761.2104.7270.0357.2464.5 YoY Growth42.3%39.3%21.9%43.2%32.0%34.3%33.3%32.3%30.0% Old Total Billings145.4202.645.555.560.6101.3262.9343.3442.6 YoY Growth42%39%28%35%31%29%30%30.0%29.0% % Change0%0%0%6%1%3%3%4%5% New Deferred Revenue57.189.583.987.590.3131.7131.7187.9261.6 YoY Growth58.8%56.7%46.2%51.9%51.6%47.2%47.2%42.7%39.2% Old Deferred Rev57.189.583.985.487.8126.1126.1173.8234.4 YoY Growth59%57%53%55%54%44%44%38.3%35.2% % Change0%0%0%2%3%4%4%8%12% New OCF(7.7)(31.9)1.4(4.4)(6.3)0.2(9.2)10.314.0 Old OCF(7.7)(31.9)1.4(1.4)(4.4)3.5(0.9)4.77.1 New FCF(11.2)(35.6)(0.2)(5.6)(7.9)(1.3)(14.9)6.27.8 Old FCF(11.2)(35.6)(0.2)(4.8)(6.0)2.1(8.8)0.71.0 % Change0%0%0%16%33%-161%69%823%680% Source: Company Data, Morgan Stanley Research Estimates4。。。。。。