Demandware, Inc. (DWRE) strikes me as one of the most interesting and innovative companies to go IPO in recent years. Why? It allows its customers to have 'centralized control over all marketing and merchandising'. Investors should think along the lines of an Amazon.com, but from a marketing and design perspective will get complete customization capabilities. The company truly does offer the user everything, and the kitchen sink.
Investors should not only love the company's business model, but the post-IPO numbers are pretty impressive. Currently, DWRE has a market cap of $703 million, revenue of $56 million, and a Price/Sales ratio of 12.55. The IPO was priced at $16, and has held a solid trading range of $23-$27/share, which is a positive sign for investors looking for price point sustainability.
Demandware already has over 100 customers, and its cloud SaaS (Software as a Service) platform has been on fire. Customers such a Crocs, Inc. (NASDAQ:CROX) and Columbia Sportswear (NASDAQ:COLM) have been very pleased with what DWRE has to offer, and out of the 100 customers, Demandware's Top 10 account for 40% of its overall revenue (I).
Earnings are going to be a key factor not only from a growth standpoint, but from an outlook standpoint as well. Guidance not just from DWRE, but from the entire sector is going to directly affect share price. If even one of the five cloud-based companies that went IPO this year hint at a downturn in the cloud sector, an uneasy overcast could fill the skies.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.