Alteryx, Inc.

AYX Details

Alteryx, Inc. (NYSE: AYX) is a provider of self-service data analytics tools. The Alteryx Analytic Process Automation (APA) software platform combines analytics, data science, and business process automation into a single self-service platform to help firms accelerate digital transformation, achieve corporate goals, and boost worker productivity. Its operating segments are 1) Subscription-based software license and 2) PCS and services.

Latest News:

• Availability on AWS: On November 16, 2021, AYX announced that the Alteryx Analytic Process Automation Platform is now available in the AWS Marketplace, a curated digital catalogue of third-party offerings that makes it simple for clients to buy and deploy software and services on Amazon Web Services (AWS).

Q3FY21 Results:

• Decline in Revenues: AYX's revenues decreased by 4.79% to USD 123.50 million in Q3FY21 (ended September 30, 2021) compared to USD 129.72 million in Q3FY20, attributable to a YoY decline of 40.65% in revenue from Subscription-based software licenses.
• Reported Net Loss: AYX reported a net loss of USD 58.04 million in Q3FY21 vs. a net income of USD 4.36 million in Q3FY20.
• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 596.45 million and total debt (including convertible senior notes) of USD 754.87 million.

Key Risks:

• Voting Concentration Risk: Each share of AYX's Class B common stock has ten votes, but each share of Class A common stock has one vote. As a result, as of September 30, 2021, Class B common stockholders, including the company's principal officers, directors, and holders of more than 5% of the company's common shares and their affiliates, controlled a vast majority of the voting power. This concentration of voting power limits other shareholders' capacity to influence company affairs.

Outlook:

• Q4FY21 Estimate: AYX forecasts revenue for Q4FY21 to range between USD 163.0 and 168.0 million, with annual recurring revenue (ARR) ~USD 635 million. The non-GAAP income from operations is projected to range from USD 2.0 – 7.0 million.
• FY21 Estimate: It expects sales of USD 525.0 – 530.0 million in FY21, with an ARR of around USD 635.0 million as of December 31, 2021. The non-GAAP loss from operations is projected to be in the USD (18.0) – (13.0) million range.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

AYX Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

AYX's stock price decreased 35.40% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 66.66 to USD 140.36. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 45.69. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 67.87.

Considering the significant correction in the stock price, disappointing bottom-line performance, lackluster technical indicators, and current valuation, we recommend a "Sell" rating on the stock at the current price of USD 72.18, down 2.10% as of November 17, 2021, 10:40 AM ET.

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

*All forecasted figures and industry information have been taken from REFINITIV.