No. of Recommendations: 4
Acquire this company
https://boards.fool.com/paylocity-pcty-research-and-analysis...

PCTY apparently targeting 600000 clients so it has to be smb and maybe up.

SHOP provides all the online tools to run a business. SQ already in the money/transactions biz side of things.

So why not help their clients pay their employees too?

Maybe they already do things like this...i dont follow SHOP enough to know.

But in one fell swoop they would be morphing into the application software space. Just seems like it would be a good move. Makes me qonder if they are already planning on it and how else they could leverage their client base and cross sell, ala Square w Caviar or Payments.

Hmmm. So do we think SQ or SHOP still have legs in 2019 from here?

Now that i am coming to terms with having merely great compabies w market-beating returns vs world-beating returns, perhaps it signals an opportune time for me to look at SQ and SHOP? They also both have the "feel" of a platform ala NOW or CRM or even NTNX vs being "just" data anayltics w AYX as an example. I value Optionality and the ability to expand TAM by releasing new features to a large install base.

What about HUBS and WIX for that matter then?

While not new and sexy, maybe the would be better than moonshots on APPS or XLNX etc...

Dreamer
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No. of Recommendations: 6
Dreamer... interesting questions.

Acquire this company

Perhaps although SQ as you say is already getting there but Shopify doesn't.

For SQ it may make sense - much of their clientele are offline operators which Square helps get online so yes doing traditional payroll etc through a cloud solution could add value, for Shopify the vast majority of their merchants are online operators who may or may not even have staff. 5000 of their 800,000 are Shopify plus and could be large players but Shopify merely represents their online platform rather than the whole of their operations.

I guess one question is whether PCTY serves SMEs as Square and Shopify really focus on these markets.

Hmmm. So do we think SQ or SHOP still have legs in 2019 from here?

Yes - Shopify is a 10% holding and Square is a 5% holding for me. Their growth is exceptional and in today's market their valuation looks half reasonable. They also have the largest TAMs out there. eCommerce is a $28trillion TAM (and growing at 20%) and Online Payments is a $7trillion TAM in the US alone at this point.

I might top up Square further (I moved my Paycom holdings into SQ recently)

They also both have the "feel" of a platform ala NOW or CRM or even NTNX


I like all and I am sure they will do well - CRM is the platform of platforms and NOW is a great business but both have high valuations and market caps. NTNX is my next largest holding at 5%+ with a $180bn TAM and a LFL growth rate second to none. I also recently entered ZEN (swapping out ZS which was too highly valued for my liking).

What about HUBS and WIX for that matter then?

I both and happy with both although I didn't like some of the customer growth metrics at Hubspot - they are well managed and are the future of online marketing (inbound). Both are 2% holdings for me.

While not new and sexy, maybe the would be better than moonshots on APPS or XLNX etc...


What I like and may enter right now with great growth and reasonable valuations:
Anaplan, Everbridge, Pluralsight, Dropbox

What I like and might enter or re-enter or add to if only valuations were more reasonable:
Enter: TEAM,
Re-enter: ZS
Add: Twilio, Square, Abiomed

What I might sell due to stretched valuations or to switch horses:
Stretched: OKTA (and shows poor operating leverage)
Switch horses: BOX & DOCU into Dropbox (which owns now hellosign).

Thinking about all of this - the TAM for Shopify and Square is just mind blowing - they dwarf everything else out there and to think that Nutanix chasing a $180bn TAM blew my mind (which itself was a higher figure than pretty much anything else we are looking at).

Ant
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No. of Recommendations: 0
I actually thought this was going to suggest SQ and SHOP merge.

Which I tend to agree with.

Wouldn’t surprise me in the least.
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No. of Recommendations: 2
Sorry - should have mentioned Elastic and Smartsheets as another couple I like but for the valuation...

What I like and might enter or re-enter or add to if only valuations were more reasonable:
Enter: TEAM, Elastic, SMAR
Re-enter: ZS
Add: Twilio, Square, Abiomed

I'm also kind of interested in TEUM since it has been raised on Saul as well as Digital Turbine which I raised here.

...and going back to your original question of whether SQ or SHOP should buy Paylocity, I think there's a case for SHOP acquiring Hubspot and maybe Shopify or Wix even acquiring Pareteum (TEUM) or Twilio - depending on how many of their clients use Communications as a Service - certainly Salesforce or IBM/Redhat or ServiceNow or ZenDesk could make a case to do that as well as Microsoft Azure or AWS.

Ant
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No. of Recommendations: 0
I actually thought this was going to suggest SQ and SHOP merge.

I used to think that Square (merchant focused) and PayPal (consumer focused) should merge but they seem to have chosen to compete in each others spaces.

Shopify could have merged nicely with Square up until a year ago but SQ seems to have moved into Shopify's space.

You could make the case for Wix (online websites) to merge with Shopify (online ecommerce) or even Wix and Square to merge!

... and then there is AfterPay Touch that someone will have to buy or it will eat PayPal and Square and possibly Shopify's payments lunch.
A
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No. of Recommendations: 1
Square owns Weebly to support a digital services build out

Shopify is moving into retail space to help merchants get products to people

They are moving towards each other.

PayPal seems to want to stick to payment space.
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No. of Recommendations: 1
They are moving towards each other.
Yes except Shopify mostly helps online only players amongst SMEs where Square helps offline merchants SME with cloud solutions (with Weebly being the overlap but that may still be helping offline players get an online website). SHOP's Shopify plus does help offline businesses online but they are large players not the SME players that the rest of Shopify and Square deal with.

PayPal seems to want to stick to payment space.

PayPal do but they have moved into merchant side beyond just consumer side with their iZettle acquisition which competes head on with Square's terminals. (But not the rest of the Square business).

A
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