Slack

1.17 (5.39%)

NYSE:WORK | Last traded on 11-15-2019 4:00 PM

Market Reaction

Offer Price

$26

Today Open Price

$21.65

Change Since IPO

Market Cap

$12.6B

Day High

$23.10

Day Low

$21.47

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Featured Analysis

Since the days when Alexander Hamilton was selling government bonds for a newly formed country down at the bottom of Manhattan Island, I cannot recall any company being worth 41x trailing sales. The only other company that comes to mind that traded at this valuation is a company called Twitter, whose price languished in the public market for two years after its IPO inception. Slack has a good product, and its revenue growth is terrific. It may be gaining some cash flow efficiency as it grows, but it's overpriced. If I could give it a 1.5 stars rating in our system, I would. I'm in a good mood today, so I'm going to give them a 2 Hippo rating.

Company Data

Location

San Francisco, CA

Valuation

$3B

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Founded

2009

Total Shares Offered

118,429,640

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Employees

1919

IPO Date

2019-06-20

Background Information

Slack is a cloud based service that helps teams communicate more efficiently. They have built a suite of apps on every type of device and focus on organized conversations, searchable history, and apps. Various integrations include HubSpot and Salesforce. Their daily active user count just surpassed 10,000,000 this month.

Financial Analysis

Years 2016 2017 2018
Revenue growth -- 110% 82%
Net profit margin -140%-63%-35%
Valuation -- -- $16B
Revenue multiple -- -- 40x
Profit multiple -----116x

Financial Information

Income Statement ($M) 20162017 2018
Revenue105221401
Cost of goods sold162651
Gross profit90194349
Total operating expense238338503
EBIT(149)(144)(154)
Pretax profit(147)(139)(138)
Net income(147)(140)(139)
Balance Sheet ($M) 20162017 2018
Total current assets612983
Cash and cash equivalents120181
Total assets6981,199
Total current liabilities172332
Total liabilities178357
Total shareholder equity519842
Total liabilities and equity6981,199
Cash Flow Statement ($M) 201620172018
Net cash from operating activities(90) (36)(41)
Net cash from investing activities(42) (240)(333)
Net cash from financing activities214 297438
Net increase in cash and cash equivalents83 2163