No. of Recommendations: 1
But as indicated w MDB, taking out Hortonworks does not necessarily remove competition.

Ok. Here's what I can try to succinctly summarize here.

TTM EV/S of the new enterprise is roughly 3.2X. I expect this is de-risked territory. Not suggesting de-risked is a good thing. It definitely requires patience and may not work out. Yes, the company could be cut in half, but the metrics don't make that likely without a big market correction that trumps all valuation estimates.

Looking at management's slides on the merger, they expect CY 2020 to produce greater than the following: $1B in revenues, 10% OpM, 15% Operating Cash Flow Margin.

Using $1.1B in revenues, you get a 20% CAGR. Not great, but that would be producing decent cash flow and growing margins as well.

Assuming in 2020 investors expect 20% growth to continue, what would that company be worth at that time?
Without multiple expansion, it is a 20% CAGR (minus dilution which has been in excess). With multiple expansion, gains could be much larger.

I hear all of the nay-sayers on cheap stocks and I don't disagree, but still suggest there is reason to look under the hood.

A.J.
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