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Jared Sleeper

Partner & Head of Software at Avenir, Startup Investing

12 May, 20:10Latest

Constellation Software has no way to benefit from AI and little organic growth, so 21x GAAP EBIT looks fair, with perhaps a downside skew if churn rises across its portfolio in the next five years. The market's negative reaction is rational. Its small vertical software businesses were run financially rather than for product, many still on-prem, with no central AI strategy as software gets cheaper to build. Organic growth was 2% in constant currency; inorganic growth is fundamentally different. x.com x.com x.com x.com

CSU.TO

Jordan

Long-Term Stock Investor, Compounding & Portfolio Construction

29 Oct

NOW

ServiceNow's unexpected expense surge makes its rich valuation more vulnerable in a struggling software sector. Revenue rose 21%, but spending drove an EPS miss and one quarter of guided cRPO deceleration; wider market conditions could hurt near term. The 20% selloff looks excessive, and few software companies should benefit as much from AI. Management could deliver over 3-5 years, though the stock is only close to a buy again now; below $100 looks good for the long term. x.com x.com x.com x.com

Ian Bezek

Investor/Writer, Latin American Equities, Former Analyst at Kerrisdale

30 Mar

CSU.TO

Constellation Software's Sabre deal is one of the dumbest capital allocation decisions in years, enough to reverse a fresh view on the stock in under a month. Constellation should be buying smaller, solvent companies. x.com x.com

Leandro

Equity Analyst at Best Anchor Stocks

12 Aug

CSU.TO

Constellation Software's post-earnings selloff is myopic, reflecting a market unwilling to look beyond one quarter. Results are driven by lumpy capital deployed into acquisitions, which analysts can't forecast, so performance must be judged over years rather than against quarterly estimates. This quarter's organic growth deceleration feeds the bear case, but it was not a normal quarter, and management explained it well on the call; the market may stay in show-me mode until Q3. x.com x.com x.com … Show more

Jonah Lupton

CEO & CIO of FirstWave Capital, Long-Biased Growth

13 Sep

BSP

Bending Spoons is a unique model of buying cheap, forgotten software businesses and cutting costs that could scale past $20B of annual revenue, but it is hard to forecast. The biggest red flag is organic growth slowing from low double digits to low single digits, raising pressure on its debt-fueled acquisition strategy, since layoffs are one-time boosts with large severance costs. Strong net revenue retention may rely on price hikes; churn after two or three years is the key question. x.com … Show more

Yimin X

Founder of YX Insights, Ex-FX/Rates Market Maker

15 Sep

NOW

ServiceNow has room for valuation expansion. Based on the historical link between its revenue growth and EV/Sales, 11.9x NTM sales is fair for a 20% three-year revenue CAGR, implying $205 a share, 44% above $142.35. Q2 subscription revenue rose 23% in constant currency to $3.9B, beating the top of guidance, and AI contract value crossed $1B. The offset: GAAP operating income fell from $358M to $162M and gross margin slipped on hyperscaler and frontier-model costs. x.com x.com x.com x.com x.com … Show more

The Inflection Economy

Portfolio Managers at Logos LP

10 Apr

CSU.TO

Constellation Software is one of the few names where AI disruption likely widens the opportunity set. @cap_zay points to its culture, lack of stock-based compensation, diversification and an acquisition hunting ground that has just become more fertile. x.com x.com

Eric Jhonsa

Technology Portfolio Manager at Dutch Asset

6 Apr

MNDY

monday.com is priced as if growth will soon turn negative, which is far from certain, at 1.1x 2027 EV/sales and 9x 2027 EV/FCF excluding SBC. It still grows in the high teens with 110% net dollar retention and just bought back a lot of stock. AI clearly threatens its UI/UX edge, but its AI features, integrations and security and governance may be hard for purely agentic tools to replicate; shorts seem to be pressing. x.com x.com

Scott R. Grossman

Founder of Vindico Capital, Consumer-Sector Investor

9 Aug

CSGP

CoStar is super cheap and left for dead even though its proprietary data makes the business bulletproof against AI. All of software is getting a bid as the sky has not fallen, and the hostile activists have been forced to move on. It ranks as a top-conviction idea. x.com

Techquity

Technology Investor, Fundamental Research

8 Oct

CSU.TO

Constellation Software is finally at a fair valuation, making it a good time to accumulate. It has three big opportunities: new types of investments such as small stakes in public companies, adding AI to its thousands of software products at little extra cost, and buying small software companies in Asia and other less competitive regions. x.com

Matthew Tuttle

CEO & CIO of Tuttle Capital Management, Publisher of Daily H.E.A.T.

13 Apr

NOW

SAP

AI is forcing a repricing of the enterprise software business model, and for ServiceNow and SAP the reset is not finished. Claude Managed Agents eased production AI deployment, ServiceNow's AI bundling raised monetization questions, and SAP warned of short-term pain like its cloud-migration margin squeeze. Multiples compress before new economics are understood, and most software still trades at a premium on GAAP P/E and EV/FCF ex-stock comp. Workday at 1.7x revenue hints at a floor. x.com

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