Slack: Winning not losing

We see an acceleration of growth at Slack and expect it to easily beat numbers. 

The market has decided that video, especially Zoom is the big winner from lockdown. We think that Slack is also a beneficiary, however due to the 'MSFT is winning' narrative Slack's stock has not moved. 

• Collaboration software is a game changer for any company. Eventually every knowledge worker will have it. This gives Slack a winnable market >10x current revenues and the potential to become a platform.

Unlike video, where use will decline when we all get back to offices etc, we think that Slack users will remain users post lockdown. Digitisation of workflows will not go backwards. 

• We see a low priced product for the value provided. Value increases as team size increases and integrations increase, which is happening.

• Network effect across organisations with external shared channels is potentially a game changer.

• The business model is attractive with 88% GM, super sticky user base, land and expand strategy and clear network effect.

Potential Upside:     $40 (+48%)

Sensible Downside: $21(-22%)

Link to Research