3. Alkami Technology, Inc. (NASDAQ:ALKT)
Sundheim’s Stake Value: $188 million
Percentage of Daniel Sundheim’s 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 13
Alkami Technology, Inc. (NASDAQ:ALKT) is a software company based in Texas that provides a cloud-based digital banking platform for credit unions and banks. The company has a market capitalization of $2.21 billion, and is ranked third on the list of the 10 tech stocks billionaire Daniel Sundheim is buying.
As of the second quarter of 2021, Daniel Sundheim holds 5.2 million shares of Alkami Technology, Inc. (NASDAQ:ALKT), amounting to over $188 million in worth and accounting for 1.23% of the fund’s investment portfolio. At the end of the second quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $265.8 million in Alkami Technology, Inc. (NASDAQ:ALKT).
For the second quarter of 2021, Alkami Technology, Inc. (NASDAQ:ALKT) reported earnings per share at -$0.08, beating market estimates by $0.01. The company also reported revenues of $36.7 million, surpassing estimates by $2.14 million.
On May 10, Needham analyst Mayank Tandon initiated coverage of Alkami Technology, Inc. (NASDAQ:ALKT) with a Buy rating and $50 price target.
In its Q2 2021 investor letter, Baron Discovery Fund explained why they were investing in Alkami Technology Inc. (NASDAQ:ALKT). Here is what the fund said:
“This quarter, we invested in Alkami Technology Inc., a cloud-based digital banking platform that enables financial institutions (primarily credit unions) to onboard and engage new users, accelerate revenues, and meaningfully improve operational efficiency. The market opportunity is large with Alkami focusing on the top 2,000 of the 10,000 total financial institutions in the U.S. (excluding the mega-banks). Many financial institutions use clunky, outdated legacy systems today that are not well suited to the shift to digital banking (which has been accelerated by COVID). As a result, we are seeing financial institutions significantly increase their IT investments in these products. We believe Alkami will be a prime beneficiary of this shift as it stands out due to its highly rated user experience, leading brand with credit unions, and platform flexibility (multi-tenant, single code base platform). Alkami is well positioned to grow revenue 25% or more for the next several years driven by a combination of expanding existing customer relationships, adding new clients (heightened focus on banks in addition to credit unions), new product development, and selective acquisitions. We also believe that the company’s 30% or greater long-term adjusted EBITDA margin target is achievable.”
