Just came across this “rule” from Nutanix’s investor day. Sounds pretty interesting.
Enter the Bessemer “Efficiency Score,” which measures a company’s efficiency by taking the sum total of a company’s percent growth + percent free cash flow (FCF) margin. This simple calculation quantifies the growth efficiency of a given cloud business. At different stages of a company’s life cycle, their Efficiency Score changes. But for the average public company a few years after IPO, an Efficiency Score above 40 is considered great.
Nutanix claims it’s one of only 21 public companies that pass this rule. Here are some of that league:
Have been looking into Box, there was dip after earning call and now bounced back more than 25% in a month. I think it has good moat on its current customer base, and I am surprised by its market cap given its revenue. I like its stable revenue stream compared to Dropbox mostly relying on consumer, but they need to drive their revenue growth.