SOHN Investment Conference: TDM’s Hamish Corlett picks communications platform Slack

Hamish Corlett expects communications platform Slack’s share price to grow 25-30 per cent per annum.

TDM Growth Partners Hamish Corlett. Picture: Supplied.

Founder and director at TDM Growth Partners’ Hamish Corlett has picked $US15bn ($21bn) communication platform Slack, saying he expects the share price to grow 25-30 per cent per annum, resulting in a 10-fold return over a decade.

At last year’s conference Mr Corlett picked the third-best performing stock, as he believed it both ahead of its competitors but still had room to grow.

And despite being one of the most shorted tech software on the market, Mr Corlett believes the same of Slack, confident it will disrupt office communication to the same extent Microsoft did in the nineties and experience similar levels of growth by supplanting email communication.

“We need something one hundred times better. Slack is that something better,” Mr Corlett said.

Praising its team-based form of communication and high engagement levels, Mr Corlett said that Slack had already won the business of major firms and start-ups, with revenue exceeding $US1bn in just six years — a growth trajectory that Mr Corlett compared to Microsoft in the 1990s.

Noting that Slack exists in a “David and Goliath” situation where its biggest competitors include the “Microsoft monster,” Mr Corlett believes it is well-placed to win market share.

Mr Corlett said that Slack had three attributes that made it able to challenge the incumbents. First is that Slack has “one mission, one platform” — it is solely focused on growing its one product and has no legacy email business to protect or platform bundles to sell, unlike Microsoft.

Second is that the recently launched Slack Connect platform which allows users at different organisations to connect.

Third is Slack’s app development platform: millions of developers are creating optional add-ons to enhance the experience of the platform based on need — and as it is yet to be monetised, the revenue growth potential is significant.

Other revenue growth potentials exist. More than 80 per cent of Slack’s 800,000 customers use Slack for free and converting one quarter of these to paying customers, Mr Bartlett said, doubles Slack’s revenue to $US2bn.

Mr Corlett envisions Slack could achieve US$3.5bn in annual revenue on a fully monetised basis and could become an acquisition target for Amazon or Australian tech darling Atlassian, who have complementary businesses.

For those reasons, Mr Corlett believes Slack is “one of the most strategic assets in enterprise software.”