Key Points Industry or Company Involved - **SMID Cap Software Companies**: The document focuses on a comparative valuation of SMID cap software companies, specifically within the vertical software and internet infrastructure universe. Core Views and Arguments - **Stock Performance**: The S&P index was down (-3%) week over week, with many covered stocks performing in line with or slightly underperforming the index. ALKT (-7%) was the greatest underperformer, while CCCS and SSNC were down only (-1%) [4]. - **Recent Events**: SS&C announced new SaaS releases for Alternatives customers across its Geneva, Eclipse, and OEMS solutions [4]. - **Recent Calls & Publications**: The document highlights Guidewire, Tyler, and Clearwater as top picks heading into 2025E [4]. - **Coverage Universe**: The document provides a table of covered companies, including their ticker, company name, JPM analyst, rating, price as of 12/31/2024, market cap, EV/Sales, EV/EBITDA, EV/FCF, FCF Yield, and FCF Yield [6]. - **Verticals**: The document discusses various verticals, including Real Estate and Construction, Internet Infrastructure, Financial Services, Insurance Software, and Other Vertical Software Names [10-18]. - **Valuation**: The document provides valuation analysis for each vertical, comparing the covered companies to their peers and the broader market [10-18]. - **Comparables**: The document identifies comparable companies for each vertical and compares their valuation metrics to the covered companies [10-18]. Other Important Content - **Analyst Certification and Important Disclosures**: The document includes analyst certification and important disclosures, including potential conflicts of interest and the firm's relationship with covered companies [3, 21-25]. - **Coverage Universe**: The document provides a list of companies covered by J.P. Morgan's equity research team [30]. - **Equity Valuation and Risks**: The document outlines the valuation methodology and risks associated with covered companies or price targets [33]. - **Other Disclosures**: The document includes various other disclosures, such as legal entity responsible for the production and distribution of research, country-/region-specific disclosures, and general information about the research material [43-50].

Industry and Company Overview * **Industry**: Manufacturing * **Company**: Not specified * **Location**: China Key Points 1. **Caixin Manufacturing PMI**: The December Caixin manufacturing PMI fell 1.0 point to 50.5, below expectations and largely reversing the rise in November. The output component fell 2.7 points to 50.5, and the new order component fell 1.4 points to 51.5. The new export orders component fell notably by 2.9 points to 48.6, the second lowest reading since September 2023. [2] 2. **NBS Manufacturing PMI**: The NBS manufacturing PMI showed a modest easing, with the output component falling 0.3 point to 52.1. The new order component rose 0.2 point to 51.0 in December. [5] 3. **Mixed Signals**: The Caixin and NBS PMIs have shown similar trends in the past three months, likely reflecting ongoing domestic policy support and growing concerns on external sector uncertainty and potential US tariff hike. [3] 4. **Domestic Demand Outlook**: The new orders component for the NBS PMI rose in December, suggesting steady domestic demand outlook amid policy support. [5] 5. **Export Sector Sentiment**: The export orders component for the Caixin PMI fell notably in December, reflecting heightened concerns of external sector uncertainty and potential US tariff hike. [5] 6. **Pricing Environment**: Both PMI reports showed generally weak pricing conditions, with ongoing PPI deflation pressure on the domestic economy and the export sector's pricing conditions weakening amid intense competition. [7] 7. **Economic Outlook**: The forecast for a solid sequential recovery in 4Q24 to 6.9% q/q saar (or 4.9%oya in 4Q vs. 4.6%oya in 3Q) remains unchanged. The full-year 2024 real GDP growth forecast is 4.84%, with a final outcome likely to be either 4.8% or 4.9% y/y. [8] 8. **Nominal GDP Growth**: Nominal GDP growth slowed to 4.1%oya in the first three quarters of 2024 and will likely print at 4.0% for the full-year, the second-worst reading since the data release in the 1990s. [8] 9. **Policy Adjustments**: Policy adjustments need to provide support for real economic activity, deal with deflationary pressure, and improve economic rebalancing, especially by improving household income, supporting domestic demand, and stabilizing private sector sentiment. [8]

Key Points Industry/Company Involved * No specific industry or company mentioned in the provided content. Core Views and Arguments * **Economic Calendar**: The document provides a detailed economic calendar for the United States in 2025, outlining the release dates of major economic indicators and FOMC meetings. This includes data such as employment reports, manufacturing indices, trade balances, consumer sentiment, and more. * **Morgan Stanley Estimates**: The calendar includes estimates from Morgan Stanley based on past patterns and historical data. This includes the NY Fed Survey of Consumer Expectations and Senior Loan Officer Survey. * **Accuracy and Completeness**: The document explicitly states that the information provided is based on generally available public sources and is believed to be reliable. However, it is not guaranteed to be accurate or complete. Other Important Content * **Contact Information**: The document provides contact information for Morgan Stanley, including address and phone number. * **Disclaimer**: The document includes a disclaimer stating that it is not an offer to buy or sell any security or a solicitation of an offer to buy or sell any security. It also states that the document is not a recommendation to participate in any particular transaction or trading strategy. * **Copyright Information**: The document includes copyright information for 2025, indicating that it is copyrighted material.

Key Points Industry or Company Involved * **American Tower Corporation (AMT)**: A REIT that owns and operates wireless communications towers in the U.S., Latin America, Europe, and Africa. * **Cognex Corp (CGNX)**: A leading provider of machine vision products used in various end markets, including consumer electronics, automotive, and retail distribution. * **Comfort Systems USA Inc (FIX)**: A provider of mechanical and electrical contracting services for nonresidential construction end markets, with a particular skew towards manufacturing, technology, and institutional verticals. * **ConocoPhillips (COP)**: A leading exploration and production company with a globally diversified asset portfolio. * **CyberArk Software Ltd (CYBR)**: A leading identity security vendor specializing in privileged account security. * **Dell Technologies (DELL)**: A provider of personal computers, servers, networking, storage arrays, and security solutions to enterprise and consumer markets. * **Elevance Health Inc (ELV)**: A managed care company offering Medicare, Medicaid, and commercial insurance through its BCBSA state subsidiaries. * **Energy Transfer LP (ET)**: A company that owns and operates one of the largest and most diversified portfolios of energy assets in the U.S. * **First Citizens BancShares Inc (FCNCA)**: A bank with a footprint largely concentrated in the Southeast, Mid-Atlantic, and West Coast markets. * **First Solar Inc (FSLR)**: The largest manufacturer of thin film solar modules globally. * **Keurig Dr Pepper Inc (KDP)**: A leading producer of innovative single-serve coffee brewing systems and the coffee pods (KCups) used in those brewers. * **Legend Biotech Corp (LEGN)**: An early commercial biotechnology company developing therapies for rare disorders, primarily Duchenne muscular dystrophy (DMD). * **Mastercard Inc (MA)**: A global payment solutions company providing various services in support of credit, debit, and related payment programs of financial institutions. * **Oracle Corp (ORCL)**: A leading provider of database, middleware, business application software, and cloud infrastructure. * **Reinsurance Group of America Inc (RGA)**: A holding company offering traditional and non-traditional life and health reinsurance products and solutions. * **Sarepta Therapeutics (SRPT)**: A commercial-stage biopharmaceutical company developing therapies for rare disorders, primarily Duchenne muscular dystrophy (DMD). * **Texas Instruments Inc (TXN)**: A designer and manufacturer of analog and embedded processing semiconductors. * **Ulta Beauty, Inc (ULTA)**: A leading specialty beauty retailer in the U.S. Core Views and Evidence * **AMT**: Expected to sustain ~5% domestic organic revenue growth in 2025 and accelerate to 5%+ in 2026 due to rising data traffic and increased carrier activity. [doc id='215'] * **CGNX**: Expected to see an acceleration to double-digit organic sales growth in 2025, driven by early cycle momentum in Logistics and Semiconductors and a positive inflection in short cycle Industrial and Consumer Electronics. [doc id='385'] * **FIX**: Expected to sustain EBIT margins of ~10% in 2024E into 2025E and 2026E due to strong demand backdrop and constrained labor environment. [doc id='367'] * **COP**: Expected to see a more capital efficient 2025 outlook and an increase in shareholder returns due to MRO integration catalysts and continued strong operational execution. [doc id='373'] * **CYBR**: Expected to maintain a 20%+ ARR growth profile while delivering on the margin story. [doc id='396'] * **DELL**: Expected to be a winner in the AI server market relative to peer HPE across Tier 2 Cloud and Enterprise markets, driving at least 10% ISG revenue growth next year. [doc id='416'] * **ELV**: Expected to return to normalized margins in 2026 as Medicaid rates improve and the company continues to win business and grow its Carelon business. [doc id='67'] * **ET**: Expected to benefit from strong growth in natural gas demand driven by the need to power data centers, coal to gas switching, and LNG exports. [doc id='426'] * **FCNCA**: Expected to see loan growth of 9%-10% in 2025/2026 and repurchase 14% of shares by YE2025. [doc id='410'] * **FSLR**: Expected to see EPS grow from $13.14 in 2024E to $30.79 in 2027E with incremental upside from capital redeployment. [doc id='104'] * **KDP**: Expected to deliver on its long-term algorithm with +MSD constant-FX revenue growth in 2025 and +HSD constant-FX EPS growth next year. [doc id='95'] * **LEGN**: Expected to see Carvykti sales performance surprise to the upside, with potential revenue reaching $1.7bn in 2025E. [doc id='136'] * **MA**: Expected to provide a balanced exposure to spend and support from value-added services, with attractive qualities including high FCF conversion and deep competitive moats. [doc id='144'] * **ORCL**: Expected to sustain 50%+ cloud infrastructure growth for the next several years, driving an overall topline revenue reacceleration to +10%/14% in FY25/26. [doc id='173'] * **RGA**: Expected to benefit from favorable global mortality and morbidity trends, supported by medical advancements like GLP-1 drugs, and upside to premium growth from key growth markets like Asia. [doc id='159'] * **SRPT**: Expected to see significant upside from its Elevidys launch in DMD and pipeline programs in LGMD, DM1, and FSHD. [doc id='167'] * **TXN**: Expected to see top analog semi companies grow +12% in 2025, with TXN exceeding this at +30% as it begins to undo its pandemic era share losses. [doc id='435'] * **ULTA**: Expected to stabilize its top-line performance and drive positive estimate revisions, leading to upward pressure on its multiple. [doc id='570'] Other Important Points * **Market Trends**: The report discusses various market trends, including the rise of AI, the transition from on-premise to cloud, and the increasing importance of sustainability. * **Valuation**: The report provides valuation analysis for each company, including price targets and multiples. * **Catalysts**: The report identifies potential catalysts for each company, such as product launches, regulatory decisions, and earnings reports.

Key Takeaways Industry Overview * **Security Software Demand Remains Strong**: Despite macroeconomic challenges, demand for security software remains robust. This is driven by the increasing volume and severity of cyber threats, the growing importance of data security, and the shift towards digital transformation. * **Platformization Trend**: The trend of consolidating security solutions into a single platform continues to gain momentum. This is driven by the need for simplicity, efficiency, and cost savings. * **M&A Activity Accelerating**: M&A activity in the security software industry is accelerating, with both strategic and financial buyers seeking to expand their capabilities and market share. Company-Specific Outlook * **CyberArk (CYBR)**: CYBR remains a strong pick with a favorable competitive environment, expanding margins, and potential for long-term margin expansion and cash flow generation. * **SentinelOne (S)**: S is well-positioned for growth as a sustainable profitable emerging competitor with a compelling setup for 2025. * **Okta (OKTA)**: OKTA is a leader in IAM and a primary beneficiary of the growing strategic importance of Identity Security. * **CrowdStrike (CRWD)**: CRWD is expected to reaccelerate growth and profitability following the July 19th outage. * **Palo Alto Networks (PANW)**: PANW is well-positioned to consolidate share within several of the largest and highest priority enterprise security markets. * **Zscaler (ZS)**: ZS is a leader in SSE/SASE markets and a beneficiary of enterprise spending and vendor consolidation. * **Tenable (TENB)**: TENB is well-positioned for better growth, as the company continues to take share at the expense of its VM-related peers. * **Fortinet (FTNT)**: FTNT is well-positioned to benefit from a firewall refresh cycle in FY26 but faces near-term headwinds. * **Check Point (CHKP)**: CHKP is well-positioned for Hybrid Cloud and Digital Transformation growth but faces valuation challenges. * **N-able (NABL)**: NABL is still relatively early with platform expansion efforts but faces near-term headwinds. * **Rapid7 (RPD)**: RPD is well-aligned with elevated SecOps and Cloud Security demand but faces execution challenges. * **Varonis (VRNS)**: VRNS is delivering better than expected execution with its SaaS transition and is well-positioned for growth. * **Qualys (QLYS)**: QLYS is targeting TAM expansion but faces challenges with customer/revenue growth. * **CS Disco (LAW)**: LAW is facing execution challenges and a lack of profitability. Sector Themes * **Securing AI**: The rise of Generative AI presents new security challenges and opportunities. Security software companies are developing solutions to secure AI across the infrastructure, data, model, access, and outputs. * **Data Security**: Data security is becoming increasingly important, driven by the growing volume of data and the increasing number of data breaches. * **Convergence of Cyber and Physical**: The convergence of cyber and physical security is blurring the lines between the two domains and creating new opportunities for security software companies. * **Cloud Security**: Cloud security remains one of the fastest-growing segments within security, driven by the shift towards cloud computing. * **SASE/SSE**: Secure Access Service Edge (SASE) and Secure Service Edge (SSE) are gaining momentum as solutions for securing hybrid networks. Valuation and Fundamentals * **Profitability Matters**: Companies with strong unit economics and embedded operating leverage are well-positioned to deliver better gross margins and LTV. * **Platformization**: Companies with strong platform capabilities are well-positioned to deliver greater levels of margin expansion and FCF growth. * **M&A Activity**: M&A activity can provide a significant boost to growth and profitability. Conclusion The security software industry remains a strong investment opportunity with a healthy demand backdrop, reasonable expectations, and a number of attractive setups for better than expected execution. Companies with strong platform capabilities, a focus on profitability, and the ability to innovate and adapt to changing market conditions are well-positioned to succeed.

Key Points **Industry Overview** * **Mixed Results**: The industry is experiencing mixed results in terms of earnings and cost of capital. ROIC incorporates returns from operating assets and capital allocation decisions, including acquisitions and spectrum investments. * **Competitive Pressure**: The Canadian telecom industry is facing competitive pressure and slowing growth, partly due to initiatives from the Canadian Radio-television and Telecommunications Commission (CRTC) promoting competition. * **Macroeconomic Outlook**: The macro team believes the Canadian economy will remain in excess supply, leading to softer growth in 2H24 and 2025 compared to the central bank's October projections. * **Wireless Market**: The wireless market is experiencing significant competition, with Quebecor capturing market share with lower prices and aggressive strategies. * **Fixed Broadband**: Telus and Bell Canada are expected to benefit from their continued fiber builds in the fixed broadband market. **Company-Specific** * **BCE**: BCE has underperformed the sector for several years and currently has a 11% dividend yield reflecting growth and capital structure concerns. The company's dividend payout ratio exceeds FCF generation, and the Ziply acquisition is expected to be dilutive to FCF at least until 2028. * **Rogers**: Rogers is focused on de-leveraging after the Shaw acquisition, but the challenging industry growth is occurring at an inopportune time. The company's recent structured equity financing is creative but has created some confusion among bond and equity holders. * **Telus**: Telus is well-positioned in the broadband market due to its fiber-rich network and ability to bundle mobile with other services. The company has a more balanced risk/reward profile compared to BCE and Rogers. **Valuation and Outlook** * **Valuation**: The report presents a valuation framework focusing on growth and ROIC rather than yield. It considers factors such as scale, profitability, leverage, financial policy, and shareholder return. * **Outlook**: The report expects the Canadian telecom industry to continue facing challenges, including competition, regulatory changes, and economic conditions. The outlook for BCE, Rogers, and Telus is cautious, with a focus on potential risks and opportunities.

Industry Investment Rating - The report does not explicitly provide an overall industry investment rating [1][2][3] Core Viewpoints - Demand for affordable car care products is increasing, with a 6% YoY drop in average product prices and a 14% rise in total units sold [2] - Seasonal trends significantly impact the car care market, with the strongest sales period from March to August [2] - Chemical Guys dominates the market with a 25% market share, 51% YoY unit growth, and 160K monthly branded search volume [2] Market Landscape - The Car Care & Cleaning category includes a wide range of products such as leather care, cleaning kits, vacuums, and waxes [4] - Year-over-year sales revenue increased by 7%, while average prices dropped by 6% [4] - Reviews increased by 27% YoY, indicating growing consumer engagement [4] Competitive Landscape - Competing brands saw a 3% YoY increase, with first-party (1P) sellers accounting for 39% and third-party (3P) sellers for 61% of the market [4] - Competing products increased by 6% YoY, with 1P sellers declining by 1% and 3P sellers growing by 6% [4] Market Share Dynamics - Chemical Guys leads with a 25% market share, up 2% YoY [8] - Other notable brands include CERAKOTE (2% market share, up 1% YoY) and Armor All (5% market share, up 1% YoY) [8] - Brands like FOLEX and Bissell experienced market share declines [8] Keyword Trends - Popular generic keywords include "Car vacuum" (283,232 search volume) and "Car cleaning kit" (168,830 search volume) [12] - Branded keywords like "Chemical Guys" (168,338 search volume) and "Meguiar's" (34,186 search volume) dominate the search landscape [12] Product Trends - Chemical Guys holds significant share of voice (SOV) across multiple keywords, including 18% SOV for "Car cleaning kit" and 26% SOV for "Car interior cleaner" [14] - Top-ranking products include THINKWORK Car Cleaning Kit (8% SOV) and Leather Honey Leather Cleaner (17% SOV) [14]