REPLAY | LOGM | Are You a SHORT or a LONG?

12/17/17 05:58PM EST

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REPLAY | LOGM | Are You a SHORT or a LONG? - logm1

TOPIC TIMESTAMPS:

4:58 – Why the freemium-to-premium model hit a wall (OPM% trough)

10:15 – LogMeIn Pro pricing strategy drives growth reacceleration

14:00 – New pricing strategy ALMOST closed the gap between customer acquisition spend and revenue from new customers

18:20 – Product revenue segmentation roadmap and why management needed to veil it

25:56 – By Increasing revenue from Pro, mgt accelerated their own product’s core problem

29:00 – Why you shouldn’t Short LOGM on account of competition fears in the collaboration space

33:30 – How management is using the LOGM Pro strategy on GoToMyPC product

36:00 – M&A roadmap in order to meaningfully reach the new 3 target areas

41:05 – Why street might be incorrectly modeling cash flow and why 1Q18 comp is a tough one

46:30 – The 2 things (at minimum) we need to see for this to be a great LONG

54:40 – Concluding points and Q&A

REPLAY | LOGM | Are You a SHORT or a LONG? - logm2

ELEMENTS OF OUR CONCLUSION

  • Greater need for M&A to fill in forward revenue growth promises than advertised
  • Inconsistent KPI
  • Even the most challenged secular part has resilient and stubbornly growing revenue (thus far) from high price increases & high churn segments
  • A canvas of opportunity that will keep the needle moving  
  • Downside risks on topline estimates, upside risks on FCF
  • Low-msd% topline growth sustaining through 2019
  • Trading sub-20x FCF
  • OCF margins moving higher
  • 10% of the stock getting returned to shareholders in next 18-24 months
  • A management team with a good track record for making it all work plus a balance sheet that is open for M&A to accelerate transition to a more traditional enterprise software business model

REPLAY | LOGM | Are You a SHORT or a LONG? - logm3 

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