Alteryx Inc.

Alteryx Inc (NYSE: AYX) is a self-service data analytics software providing company. The Company provides a subscription-based platform, enabling organizations to prepare, blend and analyze data from a multitude sources and ease data-driven decisions.

Key Highlights:

• Optimistic outlook for 2021: Company has provided a positive outlook for the full year FY2021, where revenue is expected to be in the range of USD 565.0 million to USD 575.0 million. ARR is expected to be approximately USD 635.0 million as of December 31, 2021.
• Solid Topline Performance in Q1FY21: Revenue for the first quarter of 2021 was USD 118.8 million, an increase of 9%, compared to revenue of USD 108.8 million in the first quarter of 2020. GAAP gross profit for the first quarter of 2021 was USD 107.9 million, or a GAAP gross margin of 91%, compared to GAAP gross profit of USD 95.8 million, or a GAAP gross margin of 88%, in the first quarter of 2020.
• Increased Customer Base: The company ended the first quarter of 2021 with 7,214 customers, a 12% increase from the first quarter of 2020. The company added 131 net new customers in the first quarter of 2021.
• Bolstered Cash Position: The company’s reported cash and cash equivalent at the end of Q1FY21 stood at USD 253.76 million as compared to USD 171.9 million at the end of the Q4 FY20, driven by higher cash provided from operating activities and sales on investment on maturities.

Q1FY21 Result Highlights

Source: Company

• During the quarter under review revenue up by 9% to USD 118 million from USD 108 million in pcp mainly attributed to increase in revenue from PCS & services segment partly offset by Subscription-based revenue.
• GAAP gross profit in Q1FY21 was USD 107.9 million, or a GAAP gross margin of 91%, compared to GAAP gross profit of USD 95.8 million, or a GAAP gross margin of 88%, in the first quarter of 2020.
• GAAP loss from operations for the first quarter of 2021 was USD (28.8) million, compared to GAAP loss from operations of USD (20.1) million for the first quarter of 2020.
• During the quarter, the company Achieved a dollar-based net expansion rate (annual contract value based) of 120% for the first quarter of 2020.
• GAAP net loss reported in the Q1 2021 was USD (40.7) million, compared to GAAP net loss of USD (15.5) million for the Q1 2020.
• Cash, cash equivalents, and short-term and long-term investments as of March 31, 2021 and December 31, 2020 were USD 1.0 billion.

Risk: The company’s operations are exposed to a range of risks ranging from rapid changes in technology, intense competition, currency translation risk and other macroeconomic events.

Valuation Methodology (Illustrative): EV to Sales

Stock Recommendation: The company reported decent performance in first quarter of the 2021, driven by solid topline growth and gross margin expansion. Further, the company reported that its Annual Recurring Revenue was 27% higher on a YoY basis to USD 513 million in the current quarter.  On the technical front, the leading momentum indicator 14-day RSI is not falling below 40 and recently took support and bounced back. This implies that the stock is not entering into the bearish zone. Hence, based on the above rationale and valuation done, we recommend a “Buy” rating at the closing price of USD 78.49 on July 28, 2021.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Technical Analysis Summary

Technical Chart (as on July 28, 2021). Source: REFINITIV, Analysis by Kalkine

Recon Technology Ltd

Recon Technology Ltd. (NASDAQ: RCON) is a provider of hardware, software, and on-site services to companies in the petroleum mining and extraction industry in China, the People's Republic of China.

Key Highlights

• Negative TTM ROE of 20% whereas Peer’s Median stood at 8.2%.
• Total revenues for the first half of FY21 decreased by RMB 5.2 million or 17.2%, to RMB 25.2 million compared to RMB 30.4 million in the pcp
• Losses expanded in the first half of FY21.
• Stock traded well below the crucial long-term as well as short-term support levels of 50-day and 200-day SMAs, a bearish indicator.
• Leading Momentum indicator, 14-day RSI hovering in bearish zone and taking strong resistance at 40, implies stock is in control of bears.

Technical Price Chart (as on July 28, 2021). Analysis by Kalkine

Conclusion:  The company’s performance deteriorated in the first half of FY21 compared to the previous comparable period. Also, technical indicator reflecting a weakness in the prices. Hence, given the steep bearish technical signals and lackluster fundamentals, we recommend an “Avoid” rating on the stock at the closing price of USD 3.35 on July 28, 2021. 

*The reference data in this report has been partly sourced from REFINITIV.