In this article, we discuss the top 10 stock picks of Robert Smith’s Vista Equity Partners. If you want to skip our detailed analysis of Smith’s history, investment philosophy, and hedge fund performance, go directly to the Top 5 Stock Picks of Robert Smith’s Vista Equity Partners.
Robert F. Smith is the Founder, Chairman, and CEO of Vista Equity Partners. He completed his Bachelor’s in Chemical Engineering from Cornell University in 1985. After his graduation, Robert worked at notable organizations like Goodyear Tire and Rubber and Kraft General Foods. He then completed his MBA in Finance from the Columbia Business School in 1994 and joined the investment banking division at Goldman Sachs. During his stay there, Robert completed $50 billion worth of mergers and acquisitions in the tech sector.
In 2000, Robert founded Vista Equity Partners to invest in tech businesses. With assets under management (AUM) of $86 billion, the hedge fund oversees a portfolio of over 70 tech companies. Since its inception, Vista Equity Partners has completed more than 550 deals with a cumulative value of around $212 billion. In the past 12 months, Vista Equity returned private equity and permanent capital worth $7.3 billion, while the total capital raised was valued at $9.4 billion.
Last year, Vista Equity established a Sustainability Leadership Council to work with portfolio firms on environmental, social, and governance (ESG) objectives. In accordance with its aim of being a carbon-neutral company, Vista Equity Partners acquired Verified Carbon Standard credits to offset its emissions.
In the third quarter, the hedge fund initiated a position in 4 new stocks, reduced holdings in 10 stocks, and sold out of 2 stocks. As of Q3, Robert Smith’s Vista Equity Partners has a stake in popular companies like Microsoft Corporation (NASDAQ:MSFT), Twilio Inc. (NYSE:TWLO), and Uber Technologies, Inc. (NYSE:UBER).
Our Methodology
In this article, we will take a look at the top 10 stock picks of Robert Smith’s Vista Equity Partners. These stocks have been picked from the third quarter portfolio of Robert Smith’s Vista Equity Partners.
Top 10 Stock Picks of Robert Smith’s Vista Equity Partners
10. Dynatrace, Inc. (NYSE:DT)
Robert Smith’s Vista Equity Partners’ Stake Value: $40,310,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 0.38%
Number of Hedge Funds: 41
Dynatrace, Inc. (NYSE:DT) is a provider of software intelligence platforms that employ artificial intelligence (AI) and automation to monitor and optimize application development, performance and security, IT infrastructure, and user experience for corporations and government organizations globally. The Massachusetts-based organization has 50 offices around the world.
In a note issued to investors on October 28, Keith Bachman at BMO Capital increased the price target on Dynatrace, Inc. (NYSE:DT) from $72 to $81 and maintained an Outperform rating on the stock.
Dynatrace, Inc. (NYSE:DT) was mentioned in the Q3 investor letter of Polen Capital. Here’s what the investment management firm said:
“Dynatrace outperformed during the quarter as the company reported earnings results that handily beat expectations. The company continues to increase its customer base and has expanded net revenues with existing customers.”
Apart from Dynatrace, Inc. (NYSE:DT), Robert Smith’s Vista Equity Partners also has a stake in popular companies like Microsoft Corporation (NASDAQ:MSFT), Twilio Inc. (NYSE:TWLO), and Uber Technologies, Inc. (NYSE:UBER) as of Q3 2021.
9. ServiceNow, Inc. (NYSE:NOW)
Robert Smith’s Vista Equity Partners’ Stake Value: $44,436,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 0.42%
Number of Hedge Funds: 87
ServiceNow, Inc. (NYSE:NOW) is a developer of a cloud computing platform that operates as a provider of Platform-as-a-Service (PaaS). The company provides technical management support like IT service management (ITSM) to other corporations. An example can be a ticketing tool that catalogs and processes requests for customer service. ServiceNow, Inc. (NYSE:NOW) also employs machine learning to optimize the data and overflow for businesses to make them efficient and scalable.
On November 16, Phil Winslow at Credit Suisse initiated coverage of ServiceNow, Inc. (NYSE:NOW) with an Outperform rating and a price target of $850.
RiverPark Funds discussed its stance on ServiceNow, Inc. (NYSE:NOW) in its Q3 2021 investor letter. Here’s what the firm said:
“NOW shares were our final top contributor for 3Q on a strong beat and raise quarter. The company reported 31% subscription revenue growth, 30% subscription billings growth, and a 19% non-GAAP FCF margin for the quarter, while raising full year subscription revenue and billings guidance to 29% and 31%, respectively, as well as raising non-GAAP FCF margin by 100 basis points to 31%.
ServiceNow is a best-of-breed provider of both IT Service Management (ITSM) and IT Operations Management (ITOM) solutions to enterprise customers. The company’s products serve mainly its clients’ internal employee base with a current focus on automating the process of IT deployment, configuration and service and management of IT assets across an organization. Both its ITSM and ITOM solutions are delivered as a software-as-a-service (SaaS), and are each leading solutions in growing markets, driven by the secular trend of enterprises transitioning all aspects of their business and operations to the cloud. As the company maintains and adds customers, upsells them, and expands into adjacent markets, we believe NOW should sustain a strong long-term revenue and FCF growth trajectory.”
8. HubSpot, Inc. (NYSE:HUBS)
Robert Smith’s Vista Equity Partners’ Stake Value: $52,671,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 0.5%
Number of Hedge Funds: 48
HubSpot, Inc. (NYSE:HUBS) develops and markets customer service, inbound marketing, and sales-related software. The Cambridge, Massachusetts-based company was founded in 2006 by two Harvard students, Brian Halligan and Dharmesh Shah.
Robert Smith’s Vista Equity Partners held 77,906 shares of HubSpot, Inc. (NYSE:HUBS), worth over $52.6 million at the end of Q3 2021. The investment represents 0.5% of the overall portfolio. The hedge fund initiated a position in the stock in Q1 2016.
In a report issued on December 13, Gabriela Borges at Goldman Sachs started coverage of HubSpot, Inc. (NYSE:HUBS) with a $953 price target and a Buy rating. The analyst thinks that HubSpot, Inc.’s (NYSE:HUBS) business strategy and its execution will result in analysts increasing their revenue and earnings estimates in the next five years.
Overall, 48 hedge funds held a position in HubSpot, Inc. (NYSE:HUBS) at the end of Q3 2021, down from 54 in the preceding quarter.
7. Lightspeed Commerce Inc. (NYSE:LSPD)
Robert Smith’s Vista Equity Partners’ Stake Value: $133,759,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 1.29%
Number of Hedge Funds: 26
Lightspeed Commerce Inc. (NYSE:LSPD) is a provider of cloud-based data analytics, point of sales (POS), and e-commerce software. The Montreal, Quebec-based organization offers services to hospitality, restaurants, and retail companies. The company has undertaken acquisitions worth $2 billion since the start of 2020 to consolidate its focus on the retail and restaurant industry. Vista Equity Partners initiated a long position in Lightspeed Commerce Inc. (NYSE:LSPD) stock during Q3 FY22 with 1.39 million shares.
On November 8, Mark Palmer at BTIG maintained a Buy rating on Lightspeed Commerce Inc. (NYSE:LSPD) and reiterated a price target of $112.
6. KnowBe4, Inc. (NASDAQ:KNBE)
Robert Smith’s Vista Equity Partners’ Stake Value: $360,868,000
Percentage of Robert Smith’s Vista Equity Partners’ 13F Portfolio: 3.48%
Number of Hedge Funds: 18
KnowBe4, Inc. (NASDAQ:KNBE) provides training related to security awareness and a simulated phishing platform that can help overcome the ever-growing challenge of social engineering. The platform offers browser-based engaging and interactive training with unlimited fictitious scenarios related to social engineering attacks via email, phone, and text. KnowBe4, Inc. (NASDAQ:KNBE) claims to provide access to the world’s biggest database related to security awareness training in 34 languages.
On November 4, Brian Essex at Goldman Sachs upgraded the KnowBe4, Inc. (NASDAQ:KNBE) stock from Neutral to a Buy rating and also increased the price target from $33 to $34. The analyst highlighted that the company reported “another strong quarter of extension.”
In addition to KnowBe4, Inc. (NASDAQ:KNBE), Microsoft Corporation (NASDAQ:MSFT), and Twilio Inc. (NYSE:TWLO), Uber Technologies, Inc. (NYSE:UBER) is also amongst the top 10 stock picks of Robert Smith’s Vista Equity Partners as of Q3 2021.
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Disclosure: None. Top 10 Stock Picks of Robert Smith’s Vista Equity Partners is originally published on Insider Monkey.
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