Is Slack (NYSE: WORK) stock a good buy? That's the question on many investors' lips as the workplace-collaboration software company begins to gain some traction on the market amidst coronavirus fears. The stock has risen close to 10% versus the S&P 500's (NYSEARCA: VOO) 17% loss in the past month, as of market close on March 9, 2020. 

It is about time too that the stock got some recognition, as it is actually down more than 30% since its directly listed on the New York Stock Exchange in June 2019. Investors might be starting to realize its full potential as a revolutionary product in how we go about our work lives. 

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The bull case for Slack Technologies

Here at MyWallSt, we are big fans of Slack. It is as important to the day-to-day running of the company as the Apple (NASDAQ: AAPL) computers we work off of. If Slack shuts down tomorrow, MyWallSt would not operate anywhere close to peak efficiency and that's a decent investment thesis right there. 

Slack emerged at the confluence of big changes in the way companies operate. There was a real need to help teams collaborate better. Email had an important function, but it left tasks siloed within the teams that owned them. Slack changed that completely, revolutionizing workplace communications in the same disruptive way that Netflix (NASDAQ: NFLX) disrupted the cable-TV industry. 

As of October 2019, Slack boasted more than 12 million daily active users, as well as 6 million paying customers, of which nearly 700 are paying more than $100,000 a year, up 75% year on year. 

What really stands out for Slack, is that much like companies such as Atlassian (NASDAQ: TEAM) and Shopify (NYSE: SHOP), it has become an essential part of many businesses. It recently announced ride-hailing company Uber (NYSE: UBER) to its client base and boasts tech giant IBM (NYSE: IBM) as its largest customer. The two combined bring in about 400,000 users. It is also constantly innovating, boasting more than 1,800 general-use applications in its app and spending 39% of its 2019 revenue on research and development. It's no wonder Slack can claim more than 140% customer retention rates.

The company is not yet profitable, but it is showing promising signs. At its latest earnings call, it posted losses per share of $0.02 versus $0.08 expected, and beat on revenue of $168.7 million, with sales climbing 60% year on year. 

The bear case for Slack Technologies

Unfortunately, it is not all sunshine and rainbows at Slack. There is a massive, Bill Gates-sized elephant in the room with Microsoft (NASDAQ: MSFT). Back in 2016, Bill Gates and now-CEO Satya Nadella mulled an $8 billion bid for Slack but decided to create Microsoft Teams instead. 

Back in November, Microsoft announced that its Teams software had surpassed 20 million daily active users in a worryingly short space of time, up from 13 million in June. However, Slack has continued to downplay the severity of this competition, often claiming that Microsoft has been "surprisingly unsportsmanlike" in their rivalry, relying heavily on the popularity of Office 365 to boost Teams' numbers. It is important to note that Teams comes free with an Office 365 package, and according to Slack, many Office 365 customers actually use Slack's software instead anyway. 

However, there is no denying the danger posed by big rivals, as even Facebook (NASDAQ: FB) launched its own Workplace collaboration software, which boasted 3 million users in October 2019. 

Apart from the competition, Slack's lack of profitability and growth still remains a principal concern among investors. Before its last earnings report, things didn't look good, as the company posted a net loss of $138.9 million in full-year 2019. It is still not profitable, but management has always given transparent guidance in this regard, and its latest report showed 30% customer growth year on year, while revenue grew 58%. 

Investors will anxiously await Slack's earnings report on March 12, which is expected to report a loss of $0.09 per share on $155.12 million in revenue.

So, should I buy Slack stock? 

Slack is a revolutionary company in the office space, and as the world suffers the effects of the coronavirus epidemic, the need for remote working is becoming more prevalent. 

In the long term though, the company is also a well-run business, with a wealth of experience at the helm in CEO Stewart Butterfield. Customer growth remains robust, and in the future, I believe this kind of workplace tool will become the norm. As the ones with arguably the best product, Slack is poised to boom from this growth.

Slack will report its Q1 2020 earnings after the bell on June 4.

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in Slack. Read our full disclosure policy here.