Is AI spend impacting the RPA sector?
Technology
ETR’s latest Gen AI survey indicates that budget to fuel AI ambitions is being reallocated from elsewhere (vs. newly added budget). In addition, preliminary data from their Apr 24 Technology Spending Intentions Survey shows a stark divergence in Net Score momentum between ML/AI and RPA. The y/y Net Score declines are squarely focused on three vendors: UiPath and Automation Anywhere, with whopping 18 ppts and 24 ppts Net Score declines y/y, respectively (along with Blue Prism’s 24 ppts decline, with a lower citation count). Microsoft Power Automate and Pegasystems are notably stable both y/y and sequentially from Jan, with Appian the only vendor seeing significant Net Score momentum to the upside.
Edition: 183
- 05 April, 2024
European & US short ideas
Since Vision pitched their short thesis on Vidrala, Verallia and O-I Glass at our Equity Shorting Conference in mid-Mar the stocks have underperformed the Stoxx600 by ~8%. In the last couple of months they have also initiated 3 new European shorts, 3 new US shorts, and has readied a new $7bn+ European short (trades ~$20m/day and has short interest of <1%) for initiation next week. Please join Vision for a meeting while members of their team are in Paris (Jun 5th-6th), Zurich (Jun 7th) and London (Jun 8th-12th).
In the last 24 months, Vision has closed several shorts including: Allegro, AutoStore, Boohoo, Burlington, Colruyt, De'Longhi, Electrolux, Gerresheimer, H&M, Hargreaves Lansdown, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC, UiPath and Whirlpool.
Edition: 161
- 26 May, 2023
A new $3bn+ M/Cap European industrial short
Industrials
Trades >$10m/day and has <1% short interest - will be lapping price increases at a time when volumes have turned negative and there are substitution threats and declining per capita usage of products at some of its largest customers. It trades >10x EV/EBITDA on 2023 estimates that call for 40% growth in EBITDA.
In the last 24 months, Vision has closed several shorts including: Allegro, Boohoo, Colruyt, H&M, Inditex, New Relic, Nokian Tyres, Peloton, Similarweb, Thule, Trex, TSMC and UiPath.
Edition: 154
- 17 February, 2023
Best short ideas in Software
Technology
Former software engineer, Srini Nandury, who was the original bear on Nutanix and JFrog, highlights three names that continue to offer material downside…
Gitlab (GTLB) - Reminds Srini of JFrog; market fragmentation and intense competition will limit growth.
HashiCorp (HCP) - Growth to slow more quickly than investors realise; VMware catching on faster as it did with Nutanix. Stock could easily fall to $22.
UiPath (PATH) - Turned bearish with the stock at $70 last June. Expensive solution in a commoditising market; Microsoft is quickly vaulting to the leadership position in RPA.
Edition: 131
- 18 March, 2022
Exciting new $5bn+ Industrial Short
Industrials
Trades more than $30m/day and has short interest below 5% - over-earned in 2021, faces increasing competition and bullish estimates, and its inventory accounting method may have unsustainably boosted margins.
Vision Research aims to find liquid, non-consensus, fundamental US & European shorts, generating ~25 new ideas p.a. The shorts initiated by Vision during 2021 have fallen an average of 9%, with average alpha of 16%. Stocks that fell more than 25% included Peloton, UiPath, Allegro, Boohoo, Traeger, Children’s Place, SimilarWeb and Vital Farms.
Edition: 128
- 04 February, 2022
Consumer Discretionary
Another timely short from Robert Prather - dismal earnings has seen $10bn+ wiped from PTON's market cap. Having initiated coverage mid Sep’21 at $112 (58-page report available on request), the shares are now languishing just above $50. PTON is the latest in several successful short calls from Vision Research. In fact, of the 23 ideas they have initiated on in the past 12 months, 20 have generated positive alpha (in a rising market), including UiPath, Vital Farms, Boohoo and Allegro (share price has fallen 40%+ from recent highs).
Edition: 123
- 12 November, 2021
UiPath (PATH)
Technology
Too much hype, too little differentiation, commoditising market, unsustainable valuation and slowing growth - Srini Nandury initiates coverage with a Sell-rating. Estimates 50% of RPA (Robotic Process Automation) projects are not delivering on their intended goals. Competition is intensifying and Srini considers Microsoft to be the most significant threat. TP $40 translates to 23x EV/C2022 sales - PATH should trade at a discount to high growth peer groups since most of its revenue is derived from on-prem sales. Lock-up expiration (Oct 18th) is likely to result in the shares coming under further pressure.
Edition: 116
- 06 August, 2021