Slack: Fade The Rally
Slack rallied despite confirmation of decelerating revenue trends.
Microsoft appears to be stealing users at the margin.
A valuation of 8x FY22 revenues places the stock at only $17.50.
Despite disappointing guidance, Slack Technologies (WORK) rallied back on the day following earnings. The stock still trades near the lows following a hot IPO earlier this year as the market originally priced the collaboration service at irrational levels. The bounce places the stock in a position to rally off the lows, but the valuation remains far too rich to chase Slack here as my long-term investment thesis remains negative.
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