Hedgeye CEO Keith McCullough is adding Slack (WORK) to the short side of Investing Ideas. Below is a brief note.
So, now what?
After a big 2-3 day ramp for the NASDAQ (from our #oversold signals), you're not chasing it (especially with #NazVol at 35 signaling higher-lows)!
You're looking for good Tech Bubble Shorts that are up towards the top-end of their Risk Range on #decelerating volume. Slack (WORK) checks those boxes.
Here's a good Institutional Research excerpt from Technology analyst Ami Joseph on the name:
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Takeaway: Weak results for Slack despite what should have been a good setup Slack Billings growth dropped to 25% Y/Y in F2Q from 38% Y/Y last Q and upper 40%s the quarter before. Absolute growth also hit a nadir, equaling a one year increase in Billings dollars that has not been hit since April-2018. What a stark difference for ZM and WORK. After flatlining invoice growth, ZM still posted a 2.2x increase in volume of billings because the last day of F1Q was so much higher than the first day. Why didn’t that logic work for Slack? How could billings only go up $12MM (6%) sequentially?! |
Sell the bounce,
KM