As the world continues its shift towards remote working, software such as TeamViewer is becoming more invaluable to businesses.
TeamViewer uses video conferencing, remote IT support, and the Internet of Things (IoT) to support customers. Its offering to individuals is free, but it makes money on its subscription-based Software as a Service (SaaS) enterprise product.
An example where TeamViewer is used in an enterprise setting could be in the process of a Frontline remote expert taking part in an augmented reality (AR) medical treatment, using xAssist to guide the clinical staff correctly through the procedure using smart glasses.
TeamViewer’s Frontline also includes xPick, which is used for logistics and order picking, xMake is used in assembly lines and manufacturing and xInspect is used in maintenance, service and inspection. Meanwhile, TeamViewer Tensor is an enterprise remote connectivity cloud platform.
Alongside this, they also announced in March 2021 that they will replace Chevrolet as the main sponsor for Manchester United Football Club (NYSE:MANU) in a 5 year deal. This began in July 2021 and saw them pay £235 million in return for the company name to be displayed on the team’s shirts.
Fundamentals of TeamViewer stock
The collaboration with Manchester United Football Club could unlock massive potential for consumers and businesses alike to explore TeamViewer’s range of products.
It could also provide fantastic networking opportunities for the company to raise its revenue streams. When the partnership was first announced TeamViewer’s stock plunged 16%, the share price fall may well have been a short-sighted reaction to a little understood partnership.
Since going public via initial public offering (IPO) in 2019, TeamViewer is now one of Europe’s biggest technology stocks. It went public at just over €24 a share, and by July 2020 this had increased to €51.48. Today it’s share price is a little over €28.
The company has a €5.69 billion market cap, forward price-to-earnings ratio of 71.69 and no dividend. Its sales estimates for the coming years are €556.22 million for FY2021, €713.17 million for FY2022 and €902.67 million for FY2023.
Q4 2020 became its strongest enterprise quarter marking 12% of the billings for fiscal year 2020. The company doesn’t expect its growth rate to keep pace with 2020 as it grew significantly from €17 million to €53 million in one year. However, it has room for further growth in the Americas.
Recent acquisitions include Ubimax and Xaleon, which it believes will help the enterprise business to outgrow the rest of the business.
What is the bull case for TeamViewer?
The sponsorship deal with Manchester United is certainly a good step in the right direction for TeamViewer.
The TeamViewer deal does not hinge solely on fronting the team kit. TeamViewer will also be powering many parts of the Manchester United setup, integrating the relationship between team and fans to another level.
“Through Augmented Reality, TeamViewer will enable the club to bring its fans even closer to their team and players. Old Trafford will be upgraded with state-of-the-art industrial IoT solutions”.
Besides this, Manchester United’s club locations will be enhanced with remote access and support solutions to allow the club to monitor, track and protect connected devices. This will be a showcase for modern digital innovation in sports. It could also be the start of something bigger if other clubs want to follow suit.
The club has the biggest fan base in the world and they’re incredibly loyal too. If fans discover they like the integration TeamViewer can bring to the fan/team experience, then this could be a gamechanger for immersing fans in the ultimate football experience while also exponentially boosting TeamViewers mass appeal and market cap potential.
For TeamViewer, increasing sales revenue and profitability is clearly the end goal. If TeamViewer builds up a strong association with the Manchester United football team and its fans can use its products or services in some way, they’ll be more inclined to want to because in the fans mind, the name TeamViewer will conjure images of their favourite football team.
But it’s not simply about the fans. Manchester United has a massive business to business (B2B) network. Throughout each season, TeamViewer could potentially build partnerships and cultivate sales opportunities through networking along the way.
Another potential suggestion is utilising a subscription model to bring a regular revenue to the club while providing added value to committed fans.
TeamViewer could transport fans to sit in on the club’s monthly press conference with the manager right there talking directly to them. Or immersed on the training ground taking part in the action. If TeamViewer can boost its future sales through this collaboration, in turn it will grow its market cap.
What is the bear case for TeamViewer?
A falling share price over the last few months has seen confidence in TeamViewer stock wane, but as a fairly recent addition to the market and with growing reliance on software and tools that facilitate collaboration among a remote workforce, it is anticipated that this decline will be temporary.
Although TeamViewer does have some fierce competition in this space. The company operates in a variety of sectors and therefore has considerable competition. Microsoft (NASDAQ:MSFT) Skype and Teams, Zoom (NASDAQ:ZM) and Slack (NYSE:WORK) are all competitors.
BeyondTrust and LogMeIn are its rivals in the remote connectivity space. Citrix (NASDAQ: CTXS) and countless others are VPN competitors, while SolarWinds (NYSE: SWI), Kaseya, and ConnectWise provide remote monitoring solutions. Microsoft Azure and Amazon (NASDAQ: AMZN) Web Services compete in cloud offerings.
The company really needs to concentrate on further growing its revenue and profits if it wants to increase shareholder sentiment and raise the share price.
Should I invest in TeamViewer stock?
The current fall in share price that TeamViewer is experiencing could provide investors with a good opportunity to begin investing, and with confidence that the share price will at least reach its previous levels is encouraging.
But as the likes of Zoom and BeyondTrust grow in popularity, TeamViewer will need to differentiate itself from its competitors if it is to succeed in growing its revenue and profits and also in increasing sentiment.
The partnership with Manchester United is one example of how they are doing this and the opportunities this collaboration may potentially bring could be endless.