Smartsheet Inc. (SMAR) | Investment Case

1. Company Snapshot

1.a. Company Description

Smartsheet Inc.provides cloud-based enterprise platform to plan, capture, manage, automate, and report on work for teams and organizations.The company offers Dashboards for real-time visibility into the status of work to align individuals, managers, and executives; Portals to locate and access from any device the resources available for a project without IT assistance; Cardview to organize, share, and act on workflows; and Grid to keep teams on task by tracking multiple moving parts.

It also provides Reports that allow users to see and action their work in one centralized location; Projects, which offers interface with capabilities that foster collaboration among teams and organizations; Calendar that align teams and organizations by connecting deadlines to workflows; Forms to collect information in a structured and consistent format; Automated actions to automate repetitive processes; and Integrations to connect, sync, and extend existing enterprise applications across workflows to create work execution.The company offers WorkApps to build easy to navigate apps; Connectors for embedded integrations with industry-leading systems of record; Control Center to achieve consistent work execution; Dynamic View enables mixed internal and external teams to collaborate confidentially with vendors; Data Shuttle to upload or offload data between Smartsheet and other existing systems and databases; Bridge to build intelligent workflows and automate business processes across platforms; Resource Management; Brandfolder; and Premium Apps and Connectors, as well as Calendar, Pivot, and DataMesh apps, and Smartsheet Advance.It serves aerospace, automotive, biotechnology, consumer, e-commerce, education, finance, government, healthcare, IT services, marketing, media, travel, and other sectors.

The company was formerly known as Smartsheet.com, Inc.and changed its name to Smartsheet Inc.in February 2017.

The company was incorporated in 2005 and is based in Bellevue, Washington.

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1.b. Last Insights on SMAR

Smartsheet's recent performance was driven by strong Q3 earnings, surpassing estimates with a quarterly earnings of $0.43 per share, beating the consensus estimate of $0.30 per share. The company's revenue also exceeded expectations, with a year-over-year growth of 24.4%. Additionally, Smartsheet agreed to be acquired by Blackstone and Vista Equity Partners for $56.50 per share in cash, which may have contributed to the company's recent momentum. The acquisition is expected to provide Smartsheet with the resources to further expand its collaborative work management software offerings.

1.c. Company Highlights

Last Price	56.47
Change Percentage	0.02%
Open	56.48
Previous Close	56.46
Market Cap ( Millions)	7906
Volume	17552531
Year High	56.55
Year Low	35.52
M A 50	56.08
M A 200	49.33

FCF Yield	1.59%
Dividend Yield	0.00%
ROE	1.33%
Debt / Equity	5.61%
Net Debt / EBIDTA	8592.93%
Price To Book	11.07
Price Earnings Ratio	854.9
Price To FCF	62.95
Price To sales	14.04
EV / EBITDA	-1552.94

2. Transcript Summary

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3. NewsRoom

Smartsheet Appoints Stephanie Berner as Chief Customer Officer to Champion Customer Success in New Era of Growth and AI Innovation

Aug -13

Source: businesswire.com

Smartsheet CEO Mark Mader retiring; Apptio co-founder Sunny Gupta will take over enterprise giant

Aug -06

Source: geekwire.com

Smartsheet and PwC UK Announce Strategic Collaboration to Accelerate Business Transformation at Scale

Jun -03

Source: businesswire.com

Smartsheet Unveils Smartsheet Regions Australia

May -27

Source: businesswire.com

Smartsheet Strengthens Leadership Team with Key Executive Appointments

Apr -15

Source: businesswire.com

Smartsheet Celebrates a Decade of Learning, Sharing and Success

Feb -20

Source: businesswire.com

SMARTSHEET INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Sale of Smartsheet Inc. - SMAR

Feb -04

Source: businesswire.com

Smartsheet Pulse of Marketing Report Shows Marketing Teams Rethinking How to Demonstrate Business Impact

Jan -23

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.23%)

6. Segments

Subscription

Expected Growth: 14.0%

Smartsheet's 14.0% subscription growth is driven by increasing adoption of cloud-based project management tools, expansion into new markets, and growing demand for workflow automation and collaboration solutions. Additionally, the company's strategic partnerships, user-friendly interface, and continuous innovation in AI-powered features contribute to its rapid growth.

Professional Services

Expected Growth: 18.0%

Smartsheet's Professional Services segment growth of 18.0% is driven by increasing adoption of its workflow automation and collaboration tools, expansion into new industries, and strategic partnerships. Additionally, the company's focus on customer success and upselling/cross-selling efforts have contributed to the growth. Furthermore, the rising demand for digital transformation and remote work solutions has also fueled the segment's growth.

7. Detailed Products

Smartsheet Platform

A cloud-based project management and collaboration tool that helps teams plan, track, and automate workflows.

Work Apps

Customizable, no-code applications that automate business processes and workflows.

Smartsheet Integrations

Pre-built integrations with popular business apps and services, such as Google Drive, Trello, and Microsoft Teams.

Smartsheet Reporting

Real-time reporting and analytics that provide insights into project performance and team productivity.

Smartsheet Automation

Automate repetitive tasks and workflows using conditional logic and custom triggers.

Smartsheet Dashboards

Customizable, real-time dashboards that provide a centralized view of project and team performance.

8. Smartsheet Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Smartsheet Inc. has a medium threat of substitutes due to the presence of alternative project management tools and software. However, its unique features and user-friendly interface provide a competitive advantage.

Bargaining Power Of Customers

Smartsheet Inc. has a low bargaining power of customers due to its large customer base and diversified revenue streams. This reduces the dependence on individual customers.

Bargaining Power Of Suppliers

Smartsheet Inc. has a low bargaining power of suppliers due to its ability to negotiate with suppliers and its diversified supply chain.

Threat Of New Entrants

Smartsheet Inc. has a high threat of new entrants due to the low barriers to entry in the software industry. New entrants can easily enter the market with innovative products and services.

Intensity Of Rivalry

Smartsheet Inc. operates in a highly competitive industry with intense rivalry among existing players. The company needs to continuously innovate and improve its products to maintain its market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	7.60%
Debt Cost	3.95%
Equity Weight	92.40%
Equity Cost	7.56%
WACC	7.28%
Leverage	8.22%

11. Quality Control: Smartsheet Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Paycom Software

A-Score: 5.7/10

Value: 2.2

Growth: 8.9

Quality: 8.4

Yield: 1.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

Pegasystems

A-Score: 5.1/10

Value: 1.3

Growth: 8.0

Quality: 9.1

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

Dynatrace

A-Score: 4.7/10

Value: 1.0

Growth: 8.9

Quality: 8.6

Yield: 0.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

Smartsheet

A-Score: 4.1/10

Value: 2.5

Growth: 7.4

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

Q2 Holdings

A-Score: 3.6/10

Value: 1.2

Growth: 7.6

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

Braze

A-Score: 3.6/10

Value: 4.8

Growth: 6.1

Quality: 4.5

Yield: 0.0

Momentum: 3.0

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

11.68%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.28%

Smartsheet Inc. - US83200N1037

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SMAR

1.c. Company Highlights

Weak Momentum

Average Growth

Medium Volatility

Earnings Beats

Average Quality

Average Yield

Higher Growth

Revenues Beats

Stable Momentum

Less Volatile

Strong Momentum

Earnings Miss

Fairly Valued

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.23%)

6. Segments

Subscription

Expected Growth: 14.0%

Professional Services

Expected Growth: 18.0%

7. Detailed Products

Smartsheet Platform

Work Apps

Smartsheet Integrations

Smartsheet Reporting

Smartsheet Automation

Smartsheet Dashboards

8. Smartsheet Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Smartsheet Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

56.47$

Current Price

56.47$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA