SurveyMonkey: Best Growth In 4 Quarters

Aug. 05, 2019 10:36 AM ETMomentive Global Inc. (MNTV)
Gary Alexander profile picture
Gary Alexander


  • Shares of SurveyMonkey soared nearly 20% after reporting a blowout second quarter.
  • Revenue growth accelerated to 20% y/y, three points stronger than the previous quarter and substantially higher than Wall Street's expectations.
  • SurveyMokey noted that its recently-launched Teams product continues to see strong traction, while more users shift into higher-value annual customers.
  • The company continues to expect high teens to 20% growth rates for both Q3 and the rest of FY19.

Despite having been largely ignored since its IPO, SurveyMonkey (SVMK) finally broke out of its shell after reporting Q2 results, soaring more than 20% on a surprise revenue acceleration and achieving one of the best one-day stock performances since its public debut. The survey software company continues to prove that despite the presence of rivals such as Medallia (MDLA) and Qualtrics, SurveyMonkey's long-established brand in the customer experience space has given it plenty of impetus to keep growing and selling on tuck-in products such as SurveyMonkey Teams, which is one of the biggest catalysts driving growth in the quarter.

ChartData by YCharts

Now at an all-time high since its IPO last September at just $12 per share, I believe there's still plenty of upside left in SurveyMonkey. The company turned in rather lackluster performance in FY18, but a spate of new products as well as enterprise adoption have really given SurveyMonkey a lot of momentum in the first half of FY19, as evidenced by the company's accelerated revenue growth. As I wrote in a prior article, I believe SurveyMonkey is one of the few value names in the SaaS sector that most investors have overlooked, despite clear growth catalysts.

Recall that the company has a Western Europe datacenter rollout that's expected to bring in more clients in the region starting in the back half of 2019. In addition, SurveyMonkey has noted that it has seen success converting many of its clients from monthly to annual plans, increasing their lifetime value. Annual customers are now an 80% mix of SurveyMonkey's overall customer base, up five points versus 75% in 2Q18.

The statement below, written out in SurveyMonkey's 2Q18 investor letter, captures its three major growth drivers ad the key points underpinning its bullish thesis:

We continue to execute well against our

This article was written by

Gary Alexander profile picture
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Disclosure: I am/we are long SVMK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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