Okay, so we need to have a real talk about Palente here. They got three challenges. Three major problems they got to solve within the next 12 months. Otherwise, something isn't ticking.

The one thing I Promise you that if you come to this channel to consume Penter analysis, you're going to get the good and the bad. And today happens to be a little bit more on the bad side. So the first thing I want to cover here is something that doesn't get covered a lot. Despite being a very glaring issue, the net dollar retention Penter Curran is 107% That means that for every client that spent $100 last year this year on average, this client spent $17 So that's great because clients are spending more money, right? right? But and there's a bot.

You see the rate at which Net dollar retention grows has to do with your industry. If you're in the software business, especially in the SAS business, software is a service. 107% Net Do retention for a growth company just is not enough. You have to see way more net dollar retention growth.

So Snowflake is giving you 151% Net Do retention and Paler is giving you 107. It's a huge gap. This Gap has to be closed within the next 12 months. And I'm not saying that Paler has to go to 150% retention.

No, no, no, that's not what I'm saying. I'm saying that Net doar retention is currently moving in the wrong direction. If you go back and you check over the past few quarters, net dollar retention for Penter is coming down every single quarter, so we have to start moving in the right direction which is upwards and we have to get closer to the 120 130 Net doar retention where you have to be to generate more Revenue growth and that Revenue growth is the second item I Want to talk about here today. Now the second item has to do with the fact that we're currently at 177% Revenue growth which is not bad at all.

but if you look at the clientele growth that is much higher than 17, If you look at the amount of new clients, you would expect a much higher number than 177% Revenue growth. Because you see the problem is that with this kind of price to sales ratio, you expect to see higher Revenue growth for a company like Paler. If you compare Paler to Snowflake again as a benchmark of sorts, Pante is growing at 177% Snowflake is growing at 35% but they're trading at similar multiples. Why does Palen deserve this high price to sales multiple? Despite the fact that this trading more like Oracle than it's trading more like Snowflake, because the high price in the share has to do with potential has to do with future growth.

So what's going on here? Well let me explain. the reason you see this discrepancy and they have to be closed within the next year is because Pan is implementing the model of Premium. They want to establish relationships first, monetize later, and that's a solid strategy, but this strategy has to deliver fruits. At some point, you can't stay on a premium basis.

Forever At some point the new clients you bring in have to generate revenues and I Believe in the next year they have to come in. All these new clients that came in over the past year will have to be seen or reflected in their revenue growth over the next 12 months. And in order for Penter to justify the current price to sales the current valuation, it has to get closer to Snowflake Again, not saying it has to go to 35% annual revenue growth, but it's definitely has to be in the mid 20s to justify this current valuation and to Showcase to us, the investors that the freemium get your foot through the door strategy actually works if you give it enough time, because even after two or three years of the strategy, we're not seeing an increase in revenues. That means the strategy has to be adjusted.

Something isn't ticking, so you always have to be analytical about the things that you are using right? If you have a strategy and it's not delivering the right results, we're still at 17% Revenue growth for a year from now, so that has to be adjusted now. Item number three I Want to mention today has to do more with another company which is called Microsoft Now over the past two years I've been banging the drum on Microsoft and I've been saying look, the only competition for this company can come from Microsoft And the reason is that nobody really can compete with pent products. But Microsoft does not have to honestly compete because the whole Moto superan of Microsoft is not to compete with anybody. It's to come into an established Market where somebody has a great product slack and take it away.

Take it away by bringing an inferior product to the market by giving that product away for free or through rebates through either Microsoft stuff and then wait for the other guys to go out of business. Basically, hey company, X You see this Paler product you're using that's a great product. We have something that's almost as good, but you can have it for free and you're going to get it for free as long as Paler is still on the corner waiting to give you theirs. Once Paler goes away and we take it out of business, then we're going to spike a prices and make you pay for everything you didn't pay for the past few years.

That's the whole business model of Microsoft. They've been screwing clients like this and they've been making lots of money like this. And you see, Microsoft also wraps it in a nice little bow of great support. Great engineering, great relationship with Salesforce and CEOs.

It's all well documented and by the way, in business that's fair. Everything is fair. in business and love and in war and especially in Enterprise software. Hardball Business totally respect what Microsoft is doing.

It's legal, it's moral, and it's the right way to do business. However, why do I think that Microsoft is not going to have it this time? So Microsoft has this thing called Microsoft Fabric and I'm not downplaying Microsoft fabric I Think it's a massive problem for Paler and it has to be solved within the next 12 months because it's not something we can just brush to the side and say hey, Microsoft fabric is not relevant No, no, no, no, no, that's not the case. I Think Paler now is a crunch time. Now is the time for them to prove that every single thing we said about the product is true.

Let me explain why. The only scenario in which the Microsoft strategy of driving people slowly out of business does not work is the one time where the gap of quality between the Microsoft inferior new product and the superar in the industry is so big is so massive that if any of your competitors is actually using Penter Foundry or AAP then you're in big trouble sir. If The product P has is so much Superior than no amount of discounts or rebates or great relationship is going to work. That means that the alternative cost of not using the poer stuff May cost you your job or even worse, May cost you your business.

In that case, all the schmoozing. all this hey I'm going to open up the soda pop next to you and I'm going to give mine away for free until you go out of business. It's not going to work simple as that and I believe paler will prove it. But the birth the proof again here is on Palente.

Here they have 12 months to show to the world they legitimate player and they're not going to be bullied by Microsoft Fabric simple as that but they has to be addressed. You can't just ignore it and say well, that's a real problem That is a real problem and a massive one. There's no need to overreact to the great earnings. PR Just had the S&P 500.

Inclusion is great. The $20 price tag is great. It's still a long ways away from where we needed to be. It's still very high percentage owned by retail investors which makes it extremely volatile which means you have to be careful with any investment.

but this one specifically isn't for the faint of heart. If if you believe in this company, you have to think long-term and you have to believe in what I'm saying that they can solve these challenges as well as a hundred different challenges that's going to come up in the next year if you have that. Faith This is how you do it. You slowly dollar cost average into the stock and you create a variable DCA strategy in which you buy more at certain times, buy less at other times and create a low average in the stock without gambling without emotions and without timing the market.

And that is how every single one of my members that's been using the strategy for the past 3 years has a very low cost base. Despite the stock going from 6 to 40 back to 6 to 7, it doesn't matter with our system, your average always is going to be low no matter what happens in the market. If you want to learn how to do this and how to become a better long-term investor as part of it, join us at Patreon.com Nash We have an amazing Community would love to see you there 30 days money back guarantee if you don't find Value in that to anyone for any reasons no questions asked I'll see you the next video.