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.”
