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Transaction Details

Company: Pluralsight
Ticker:PS
Yahoo Beta:0.87
Industry:Software - application

Company Description:  Pluralsight is an on-line learning site with a focus on technical courses. The company hires subject experts to prepare courses and pays them based on views. Pluralsight focuses on offering various levels of licenses to large companies and provides feedback and certification on employee skills to management.

Purchase Date:14 Nov 2018 Sale Date:25 Sep 2020
Purchase Price:$20.10 Sale Price:$16.75
  --Split Adjusted:$20.10  --Split Adjusted:$16.75
Shares Purchased:500 Shares Sold:500
  --Split Adjusted:500  --Split Adjusted:500
Transaction Fee:$4.95 Transaction Fee:$0.19
Price Range (6 Months Prior):    Price Range (6 Months After):    
High$37.39 High$0.00
Date11 Sep 2018 Date01 Jan 1996
Low$19.95 Low$0.00
Date22 May 2018 Date01 Jan 1996
S&P (Purchase Date):$2,701.58 S&P (Sale Date):$3,267.37

Purchase
Timing:  We bought near the bottom of the six month range.
Reason:  The enterprise software publishing industry is in its growth stage and PS is growing quickly within that industry, with a lot more room for growth. It has a great product, proven by metrics such as dollar-based net retention rate and annual recurring revenue. There are no other companies doing exactly what PS is doing right now, limiting competition. The enterprise software publishing industry is expected to outpace GDP growth by 2.2% (annualized) over the next five years, and is in its growth stage according to IBISWorld. Within the industry, PS has strong revenue growth (22% in 2016, 27% in 2017) and it believes it has captured less than 1% of its total market opportunity according to figures from Evans Data Corporation. Additionally, PS has a strong product. Its dollar-based net retention rate last year was 117% meaning its customers are increasing their overall billings even while factoring in customers that unsubscribe from the platform. The increased same-customer billings are more than enough to make up for those leaving the platform. PS has an ARR (annual recurring revenue) growth of 38%, which is higher than the industry median of 23%. This shows that it is increasing its predictable revenue that it can count on each year. Lastly, while there is room for further competition in the future, there are no other truly similar products available right now. Pluralsight competes well on price, delivers a strong product, and provides value to its customers who continue to increase subscription purchases. We bought right after the lockup period and near the 52-week (all-time) low.

Sale
Timing:  x
Reason:  COVID-19 has increased reliance on remote education and encouraged entry to the market. Pluralsight does not seem to have benefited from the shift as much as some of its competitors. While revenue is growing, the company is engaging in a heavy acquisition program and margins have not improved as rapidly as we would wish.

S&P Gain: 20.94 % Annualized Gain: 11.29%
Stock Gain: -16.67 % Annualized Gain: -9.75%

Dividends:$0.00
Net Holding Return ($): $-1,680.14
Net Holding Return (%): -16.71 %