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Sidoti & Company Search For Growth And Profit
- Sidoti is a well-established boutique broker providing bare-bones research on small public stocks.
- The business is stuck at a $30M run rate, which will continue as long as the company works at it.
- Personnel costs consume over 70% of revenues, and other operating costs only allow for a slim profit.
- The company could make it out at a low valuation of $6-$10M, but we'd encourage management to revamp for growth and try later.
ReWalk Robotics IPO - Exoskeletons For The Disabled
- ReWalk is an early leader in the emerging space of using exoskeletons to allow paralyzed people to walk again.
- Revenues are nascent, but they are FDA approved and working to expand coverage and adoption. The company has good technology and a solid management team.
- The proposed market capitalization of $144M (at the $12 price) looks attractive given the market opportunity and margin potential.
- Their partnership with the much larger Japanese company Yaskawa helps limit the risk for investors if the company founders badly in terms of execution.
- ReWalk is still very risky with large investments and quarterly losses still coming.
GoDaddy IPO S-1 Teardown
- An early read of the partial S-1 suggests a market cap of $2.8B to $4B post IPO.
- Ownership by private equity firms complicates the structure and story a bit – could impact valuation.
- Company strategy to increase ARPU using value-added services has had limited success so far.
- Investors should expect an active M&A program post-IPO.
UBIC Is A Little Asian Autonomy
- Since its stealthy IPO on the US market last year, this small Japanese software company is up nearly 300% YTD.
- It is expanding its US presence with automated and AI-based solutions that analyze data for use in applications like e-discovery, fraud detection, and compliance.
- With a market cap of nearly $400M and expected sales this year of just under $60M, the stock is no longer cheap, but still has potential.
- Analyst coverage is limited, and the fundamental data around this company on services like Google Finance is wrong - understating its market capitalization and carrying a very high EPS figure.
El Pollo Loco Is Trading Like Chipotle
- El Pollo Loco is one of the more attractive growth stories in the restaurant segment.
- At $43/share, the shares are already trading in line with Chipotle.
- Investors should wonder if this new IPO is now "priced for perfection".
Trupanion Makes Pet Health Insurance Attractive
- Trupanion has built a better insurance plan for consumers with improved coverage and simple terms. By marketing via vets, their pet acquisition costs (PAC) are low relative to lifetime value.
- This is a nascent, but potentially large market in the US. Our estimates are far lower than management, but we'd put the figure at $8B over the next 10 years.
- Insurance margins are lower than other growth stories - this factors into our IV model yielding a price range of $13 to $20 over the next 12 to 18 months.
Care.com At A Crossroads
- Care.com is suffering from slower growth post their successful IPO.
- Management has some decisions to make about strategy.
- By focusing on ARPU, they are shrining their TAM and the stock price.
- A shift could unleash more growth and attract new investment interest.
Minerva Doesn't Get Much Activation
- The Minerva IPO got done at $6 - a 50% discount to the filing range.
- Commercial success is a way off, but they are targeting schizophrenia, depression, insomnia, and Parkinson's disease - all big opportunities.
- If either one of their Phase IIB trials is positive the current $114M market capitalization will look very cheap.
- There is no near-term catalyst here, but the shares are worth keeping on the radar screen.
Mobile Iron Transcript - Big Upside If Model Plays Out
- Mobile Iron (MOBL) is a "sleeper IPO" brought by Goldman Sachs and Morgan Stanley.
- As a provider of software to help enterprises run on mobile devices, their market is red hot.
- Growth and market share has been excellent, but the company is making big losses.
- If MOBL can come close to their long-term model, the stock will be much higher.
A Closer Look At Ruckus Wireless
- Ruckus has declined steadily from its IPO "pop", but a recent deal with Google attracts our attention.
- Wireless data has been huge and we know many have been looking at WiFi as a potential solution.
- Recent deals with Google and Boingo suggest RKUS is in a leadership position, it suggests our $15-16 IV is achievable if not conservative.
IPO Market Update
- The current IPO schedule is positioned to clear the calendar by Memorial Day.
- JD.com is the most important deal as it will lay a foundation for the much-anticipated Alibaba IPO.
- Parsley is a sizable deal in the energy space that serves as the other "anchor" for the week.
Tepid Demand For 21st Century Oncology IPO
- 21st Century Oncology is struggling to get to their IPO.
- Demand is limited due to high debt levels and "roll-up" growth strategy.
- Company might need to retry with clearer financial targets.
Zendesk IPO Transcript
- Zendesk saw its IPO price in the middle of the range at $9 and trade up nicely to $13.
- We estimate 2014 revenues to be at least $132M, which puts the shares at 7x current sales.
- Given its strong position in the market, we'd be inclined to hold this one for the long term.
Zulily Management 'Happy To Be Misunderstood'
- Zulily quarter report in-line with expectations but strategic direction a concern.
- Comment that they are "happy to be misunderstood" is a poor message for investors.
- High valuation combined with higher spending on items that produce little advantage pressures stock.
- IPO share lockup expiration will add to stock supply at a bad time in the company's development.
- Our conclusion is that ZU should be part of another company like QVC.
The Rubicon Project Fills Out Mini Digital Advertising Sector
- The Rubicon Project joins an expanding group of new digital advertising companies.
- Positioning Rubicon with Criteo and Rocket Fuel is no easy task.
- All the companies are "priced for perfection".
Busy IPO Calendar Cheatsheet
- There are 16 deals in active marketing right now with 7 expected to price this week.
- IMS Health (IMS) and Ally Financial (ALLY) are attracting the most institutional attention.
- The Rubicon Project has been moved up to tonight for trading on Wednesday.
- A Watershed Moment For Zillow?
- Care.com: High-Risk Potential, High-Reward IPO
- Santander Consumer USA A Hit With Institutions With Sharply Rising Dividends Likely
- CHC Group On The IPO Launch Pad
- The Germans Are Coming To 3-D Printing With voxeljet
- May 2013 IPO Market Update
- Tableau Software IPO - Priced Above The Range, Headed To $50+
- Fairway Market IPO Coverage
- Xoom's Operational Worries Nix Our Enthusiasm
- March Shows Solid IPO Momentum Into April
- Reviewing 6 Recent IPO Transactions
- Xoom IPO Still Offers Long-Term Appreciation
- 2013 IPO Market Off To A Strong Start
- IPO Market Update And Outlook
- PetroLogistics Hits Another Pothole
- Could Berry Plastics Be Another Aptar?