Take-aways from Analyst Report. I've read the ana
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Posted On: 08/21/2019 2:07:55 PM
Take-aways from Analyst Report. I've read the analyst report several times. Enclosed is some information taken directly from the report, that I found interesting.
Initiating coverage VERB, provider of sales tools that features interactive video, with a Buy rating and $3.50 price target.
A surge in demand for video advertising resulted in digital overtaking TV ad spending in 2018 and we argue Verb is positioned to benefit from this trend.
Though we do not forecast significant revenue from partnerships with CRM OEMs, agreements in place with Microsoft, Salesforce, NetSuite and Marketo could drive significant upside to our estimates in 2020.
Our valuation for the SaaS business is a discount to high growth and more mature SaaS businesses given its limited history and early stage
VERB is also working with MSFT to integrate its solution into Stream, which is an Enterprise Video service that is used to upload, view, and share videos securely within an organization, where VERB could generate a royalty for each sale.
Management said the new product for NetSuite and Salesforce is complete and has been delivered and now going through a testing phase that we expect could last for about 3-5 months. Management expects this product will be available for sale as an option with NetSuite or Salesforce during 4Q:19.
We believe there is always uncertainty as to the timing of any integration into a large software OEM’s product. Testing can take a long time, there can be significant red tape and these companies may have other more pressing priorities. However, if the product is integrated, tested and approved to be sold with these software platforms, VERB can sell a bundled software package that includes its interactive video technology and those software vendors will pay VERB a percentage of the sale of the OEM’s software. Alternatively, if the software OEM sells VERB’s technology, VERB will pay a percentage of the sale to that software OEM. We argue with the massive user bases of each of these platforms, even a very modest adoption rate would provide a significant lift in revenue for VERB.
We expect in-app purchasing will be launched in 4Q:19 and begin having a modest impact to revenue in 4Q:19 before a more meaningful contribution in 2020.
With the backing of a large customer that wants to be operational with VERB’s interactive video technology this year, the company is opening operations in China working with professionals to ensure the company is in accordance with local laws and regulations. Management said that although it is working with one customer based on the near-term opportunity, VERB is positioning the company to benefit from one of the largest direct sales markets in the world and service many customers. We believe the one large customer could help drive solid subscriber growth in 4Q:19 and 1H:20, but the magnitude is unknown. Moreover, it is unclear how much capital the company is allocating to this business outside of the one large customers in the near-term. However, we believe longer-term, China will be a significant growth driver. As a result, China is not a material factor into our valuation.
VERB is developing an application that is expected to be released in 4Q:19 that will work with all social media platforms such as Twitter, LinkedIn and Instagram.
Market researcher Aragon expects the worldwide sales engagement platform market to grow from $1.57 billion in 2017 to $5.59 billion by 2023. The market is dominated by software giants like Microsoft, Salesforce and Oracle. Verb is working to integrate its interactive video capabilities in each of these platforms.
Our 2019 revenue estimate does not assume revenue from in-app purchasing. Furthermore, VERB expects to reintroduce the new products to integrate with the large CRM software companies during 4Q:19 but we do not include significant revenue from these partnerships such as MSFT, Marketo, Salesforce or ORCL.
We expect revenue will ramp in 4Q:19 as a result of new applications and tools and timing of installations. Furthermore, we expect the stronger pricing model will also benefit digital revenue.
CRM software stocks that are growing command premium valuations. As a relatively immature company that is about to report its first quarter of meaningful revenue, we argue VERB warrants a steep discount. However, as an emerging growth company that is introducing innovative technology that can disrupt the video advertising and CRM market, we believe that VERB will command similar premium valuation if the company executes and quickly grows is revenue base. We further argue that any production agreement with one of the large CRM software companies to make VERB an option or part of their software platform would be a game changer in terms of valuation, revenue and earnings estimates
VERB’s technology is differentiated and innovative and we argue solid adoption, execution or integration with a large CRM software company, could lead to a much richer valuation and as the business model is solidified.
Initiating coverage VERB, provider of sales tools that features interactive video, with a Buy rating and $3.50 price target.
A surge in demand for video advertising resulted in digital overtaking TV ad spending in 2018 and we argue Verb is positioned to benefit from this trend.
Though we do not forecast significant revenue from partnerships with CRM OEMs, agreements in place with Microsoft, Salesforce, NetSuite and Marketo could drive significant upside to our estimates in 2020.
Our valuation for the SaaS business is a discount to high growth and more mature SaaS businesses given its limited history and early stage
VERB is also working with MSFT to integrate its solution into Stream, which is an Enterprise Video service that is used to upload, view, and share videos securely within an organization, where VERB could generate a royalty for each sale.
Management said the new product for NetSuite and Salesforce is complete and has been delivered and now going through a testing phase that we expect could last for about 3-5 months. Management expects this product will be available for sale as an option with NetSuite or Salesforce during 4Q:19.
We believe there is always uncertainty as to the timing of any integration into a large software OEM’s product. Testing can take a long time, there can be significant red tape and these companies may have other more pressing priorities. However, if the product is integrated, tested and approved to be sold with these software platforms, VERB can sell a bundled software package that includes its interactive video technology and those software vendors will pay VERB a percentage of the sale of the OEM’s software. Alternatively, if the software OEM sells VERB’s technology, VERB will pay a percentage of the sale to that software OEM. We argue with the massive user bases of each of these platforms, even a very modest adoption rate would provide a significant lift in revenue for VERB.
We expect in-app purchasing will be launched in 4Q:19 and begin having a modest impact to revenue in 4Q:19 before a more meaningful contribution in 2020.
With the backing of a large customer that wants to be operational with VERB’s interactive video technology this year, the company is opening operations in China working with professionals to ensure the company is in accordance with local laws and regulations. Management said that although it is working with one customer based on the near-term opportunity, VERB is positioning the company to benefit from one of the largest direct sales markets in the world and service many customers. We believe the one large customer could help drive solid subscriber growth in 4Q:19 and 1H:20, but the magnitude is unknown. Moreover, it is unclear how much capital the company is allocating to this business outside of the one large customers in the near-term. However, we believe longer-term, China will be a significant growth driver. As a result, China is not a material factor into our valuation.
VERB is developing an application that is expected to be released in 4Q:19 that will work with all social media platforms such as Twitter, LinkedIn and Instagram.
Market researcher Aragon expects the worldwide sales engagement platform market to grow from $1.57 billion in 2017 to $5.59 billion by 2023. The market is dominated by software giants like Microsoft, Salesforce and Oracle. Verb is working to integrate its interactive video capabilities in each of these platforms.
Our 2019 revenue estimate does not assume revenue from in-app purchasing. Furthermore, VERB expects to reintroduce the new products to integrate with the large CRM software companies during 4Q:19 but we do not include significant revenue from these partnerships such as MSFT, Marketo, Salesforce or ORCL.
We expect revenue will ramp in 4Q:19 as a result of new applications and tools and timing of installations. Furthermore, we expect the stronger pricing model will also benefit digital revenue.
CRM software stocks that are growing command premium valuations. As a relatively immature company that is about to report its first quarter of meaningful revenue, we argue VERB warrants a steep discount. However, as an emerging growth company that is introducing innovative technology that can disrupt the video advertising and CRM market, we believe that VERB will command similar premium valuation if the company executes and quickly grows is revenue base. We further argue that any production agreement with one of the large CRM software companies to make VERB an option or part of their software platform would be a game changer in terms of valuation, revenue and earnings estimates
VERB’s technology is differentiated and innovative and we argue solid adoption, execution or integration with a large CRM software company, could lead to a much richer valuation and as the business model is solidified.
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