In this article, we discuss the top 5 stock picks of Robert Smith’s Vista Equity Partners. If you want to read our detailed analysis of Smith’s history, investment philosophy, and hedge fund performance, go directly to the Top 10 Stock Picks of Robert Smith’s Vista Equity Partners.
5. Ping Identity Holding Corp. (NYSE:PING)
Robert Smith’s Vista Equity Partners’ Stake Value: $487,355,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 4.7%
Number of Hedge Funds: 20
Ping Identity Holding Corp. (NYSE:PING) provides federated identity management and self-hosted identity access management (IAM) services. These services are used by Microsoft Azure, Amazon Web Services, Google Cloud, other forms of private cloud, and Software-as-a-Service (SaaS). Ping Identity Holding Corp. (NYSE:PING) was founded in 2002 by Andre Durand and Bryan Field-Elliot. Following multiple rounds of funding, Vista Equity Partners acquired majority ownership of the company through a leveraged buyout of $600 million in June 2016. Three years later, Vista Equity Partners decided to take the company public through an IPO.
During its investor day on December 1, Ping Identity Holding Corp. (NYSE:PING) revealed that it expects a total addressable market (TAM) of at least $50 billion by 2023. The company also shared its long-term revenue growth target of 20% to 25% until 2023 and more than 50% SaaS revenue CAGR from FY21 to FY24. Following the investor day, Patrick Colville at Deutsche Bank maintained a Hold rating on Ping Identity Holding Corp. (NYSE:PING) stock with a $25 price target. The analyst termed the targets set by the company as “impressive” but stated that it is a “show me” story that requires proof.
In its Q2 2021 investor letter, Baron Discovery Fund shared its stance on Ping Identity Holding Corp. (NYSE:PING). Here’s what the fund said:
“Ping Identity Corporation is a software company that provides secure user identification, mainly for large enterprises. We initially invested in Ping on its IPO in the third quarter of 2019. Ping’s products address employee access as well as customer access. Examples of Ping’s products include multi-factor identification (which might use mobile text verification or a biometric identifier like a fingerprint to add to a password protected identity), and single sign-on (SSO, which allows employees of a firm to log into multiple applications simultaneously). Ping secures over 2 billion identities globally. It is a well-run company with highly visible growth prospects, a strong balance sheet, and real free cash flow. Ping also trades at a reasonable valuation multiple, far below that of its closest competitors. In our opinion, this is because it has been growing slower than its rivals (low to mid-teens revenue growth versus 40% plus at the competitors). But with new products (recognized by leading consulting firms as industry leading) and a better focus on marketing, we surmise that growth will accelerate meaningfully. There is also a significant margin-expansion opportunity. If the expected growth and margin expansion occur, Ping’s share price should substantially increase.”
4. PowerSchool Holdings, Inc. (NYSE:PWSC)
Robert Smith’s Vista Equity Partners’ Stake Value: $1,855,935,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 17.93%
Number of Hedge Funds: 11
PowerSchool Holdings, Inc. (NYSE:PWSC) provides cloud-based software for the K-12 education market. The platform is adopted by 90 out of the top 100 US districts in terms of student enrollment. PowerSchool Holdings, Inc. (NYSE:PWSC) has over 13,000 customers spread across 90 countries globally and claims to serve 70% of all K-12 students in the US and Canada.
Robert Smith’s Vista Equity Partners held over 75 million shares of the stock at the end of Q3 2021, worth $1.86 billion. Overall, 11 hedge funds out of the 867 being tracked by Insider Monkey reported owning a stake in PowerSchool Holdings, Inc. (NYSE:PWSC) at the end of the third quarter.
3. Integral Ad Science Holding Corp. (NASDAQ:IAS)
Robert Smith’s Vista Equity Partners’ Stake Value: $1,947,059,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 18.81%
Number of Hedge Funds: 19
Integral Ad Science Holding Corp. (NASDAQ:IAS) is a New York-based digital advertising corporation that looks into the placement of digital advertisements. The company went public in June 2021 and is known for catering to fraud-related issues, providing verification and viewability measures, and also has the proprietary TRue Advertising Quality (TRAQ) scoring system under its umbrella.
Robert Smith’s Vista Equity Partners initiated a position in Integral Ad Science Holding Corp. (NASDAQ:IAS) stock in the second quarter of 2021. The hedge fund owns over 94 million shares of the stock, representing 18.81% of the overall portfolio as of Q3 2021.
2. Jamf Holding Corp. (NASDAQ:JAMF)
Robert Smith’s Vista Equity Partners’ Stake Value: $2,092,225,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 20.21%
Number of Hedge Funds: 23
Jamf Holding Corp. (NASDAQ:JAMF) is a software company known for the development of Jamf Pro, formerly known as the Casper Suite, until the rebranding. The software aims to allow system administrators to automate and configure IT-related tasks on the operating systems of various Apple Inc. (NASDAQ:AAPL) devices like the iPhone, iPad, iMac, and Apple TV.
Jamf Holding Corp. (NASDAQ:JAMF) was founded in 2002. Vista Equity Partners made Jamf Holding Corp. (NASDAQ:JAMF) a subsidiary by becoming a majority shareholder in the company in December 2017. Soon after, Jamf acquired three more entities to expand its portfolio of users and services in the next two years. Following consolidation, Vista Equity Partners took the company public through an IPO and raised $468 million at a valuation of $4.6 billion in July 2020.
Brian Essex at Goldman Sachs resumed coverage of Jamf Holding Corp. (NASDAQ:JAMF) with a $38 price target and a Buy rating. The analyst highlighted the recent pullback in the stock price as an attractive entry point for investors.
1. Datto Holding Corp. (NYSE:MSP)
Robert Smith’s Vista Equity Partners’ Stake Value: $2,718,711,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 26.27%
Number of Hedge Funds: 11
Datto Holding Corp. (NYSE:MSP) is a Norwalk, Connecticut-based corporation providing cybersecurity and data backup services. Datto builds cloud-based software and security solutions for delivery by a managed service provider (MSP). The job of the MSP is to ensure that the IT systems of an organization are operational.
Datto Holding Corp. (NYSE:MSP), founded in 2007, was acquired by Vista Equity Partners in 2017 for $1.5 billion. Following the takeover, Datto Holding Corp. (NYSE:MSP) was merged with Autotask Corporation, another company in the Vista Equity Partners portfolio.
In a research report issued to investors on December 29, Mike Cikos at Needham reiterated a Buy rating on Datto Holding Corp. (NYSE:MSP) stock and increased the price target from $29 to $32. The analyst highlighted the relative outperformance in stock price during Q4 2021 as a reflection of management’s intent to consistently deliver 20% growth to surpass the $1 billion mark in revenues by 2024.
You can also take a peek at the Top 10 Stock Picks of Mick Hellman’s HMI Capital and 10 Metaverse Stocks to Invest In.
