Amid Spending Constraints, Hashi Should Top List On Substantial Discount Over Microsoft, Amazon, Google Clouds: Analyst

  • Needham analyst Alex Henderson maintained a Hold on HashiCorp, Inc HCP.
  • Hashi demonstrated demand resilience against macro headwinds posting strong 52% Q3 revenue growth, beating consensus by 13% and guiding Q4 ahead.
  • The guidance calls for Q4 revenue of $123-$125 million and an EPS loss of $(0.23)-$(0.21), both above the Street estimates.
  • Results were highlighted by robust 134% DBNR, 63% customer growth to 3,899, and expansion with the company's third >$10 million ARR customer. 
  • Hashi also demonstrated management agility by pivoting to a more modest spending trajectory, driving improved margins. 
  • The analyst saw Hashi as an "Anchor" vendor that sees its wallet share grow as spending is constrained. 
  • One of Terraform's core value propositions is a cost-effective way to control and rein in exorbitant Cloud expenses. 
  • Hashi's products are a relatively minor cost compared to the large budgets of Microsoft Corp MSFT Azure, Inc AMZN AWS, Alphabet Inc GOOG GOOGL Google and even Private Cloud. 
  • ROIs are often realized in months. As the environment puts constraints on spending, the analyst believes Hashi should remain high on the purchasing priority list. 
  • The analyst thinks the strong print and guide are illustrative of this point.
  • Also ReadHashi Has Ingredients To Insulate It From Slowdown, However It's Not immune, Analyst Says
  • Price Action: HCP shares traded higher by 7.9% at $28.84 on the last check Thursday.
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