2016 IPO Update: Winners, Losers, And Highlights For IPOs On Deck

| About: Renaissance IPO (IPO)

Summary

2016 IPO issuance down over 60% vs prior year, not for lack of strong post-IPO returns.

Average year-to-date returns of 2016 IPOs is above 40%, led by tech and consumer issuers.

Overviews of bullpen of 10+ IPO candidates on deck for your investment consideration.

Despite 2016 being a relatively "battered IPO market" per The Wall Street Journal, with year-to-date offerings down 62% versus prior year (68 in 2016YTD vs. 138 in 2015YTD), there are multiple absolute bright spots and a slew of IPOs on deck worth noting, suggesting increasing new issue market momentum.

Relatively Strong IPO Performance by 2016 Issuers that have "Gotten Out"

Average year-to-date returns for 2016 IPOs sits at +40% fueled by the Top 10 issuers which average 160% year-to-date returns. Healthcare has the largest share of Top 10 IPO performance representation with 5 companies, though the top 3 are made up of two technology companies Acacia Communications (NASDAQ:ACIA) (which posted quarterly revenue report post-IPO that was 30%+ street expectations) and Twilio (NYSE:TWLO) (which I have previously lauded for a variety of reasons, but which I have also expressed concerns over current valuation here) and then rounded out with industrials company IMPINJ (NASDAQ:PI).

Considering 2016YTD IPO performance by industry, technology leads the pack with average year-to-date IPO returns of 93% (led by two high flyers in the pack of 10 tech IPOs this year), consumer comes in second with average IPO returns of 34% across the pack of 11 (most recently e.l.f. Beauty which posted 40%+ returns on first day of trading), healthcare comes in third with average returns of 32% across the slew of 26 companies (returns dragged by the 7 negative returns companies that have lost on average 22%), and last but not least being financials with 27% average returns but notably no losers that have lost value since IPO. Full 2016YTD IPO returns roll call and details below:

So, given the above attractive year-to-date returns of IPOs, I wanted to share with all who's currently on deck marketing their IPO and quickly note each's investment considerations for your review:

Interesting IPO Prospects on Deck with Investment Highlights Worth Your Consideration

Advanced Disposal Services, Inc. (NYSE:ADSW): Leading provider of solid waste collection and disposal services

  • Over $400M in EBITDA over trailing twelve months (June 2016)
  • Strategic network of vertically integrated disposal assets
  • Differentiated business model driving growth
  • Proven growth through acquisitions and new contract wins
  • Stability supported by revenue diversification and long-term contracts
  • Efficiency gains driving margin and FCF enhancement
  • Stable and growing industry with favorable tailwinds

AquaVenture Holdings Limited (NYSE:WAAS): "Water as a Service"

  • Over $30M in Adj. EBITDA in trailing twelve months (June 2016)
  • Multinational provider of water purification solutions
  • Plays to favorable clean water macro trends
  • Differentiated, high margin water-as-a-service business model
  • Recurring and contracted revenue
  • Broad footprint underpinned by long-term customer relationships
  • Experienced management team with a demonstrated track record of driving growth

Azure Power Global Ltd (NYSE:AZRE): India's first private grid connected MW Solar Plant

  • Leading company in Indian solar market
  • Scalable platform with a large and growing pipeline targeting 5GW committed or operating by Dec 31, 2020 (1,005MW portfolio today, with 250MW of capacity under auction)
  • Excellent track record of execution and growth (Operating project CAGR of ~114% since July 2012 to July 2016)
  • Fully integrated in-house capabilities minimizes execution risk and lowers LCOE (84% reduction in balance of system cost since inception)

Camping World Holdings, Inc. (NYSE:CWH): Retailer of RVs and accessories under Good Sam and Camping World brands

  • 120 RV locations in US with 11M unique contacts and 3M active customers
  • Over $3.3B in revenue and $250M in EBITDA
  • Iconic / industry-defining brands
  • Comprehensive portfolio of services and protection plans/products
  • Significant customer database
  • Leading market position and scale
  • Core of high margin, recurring revenue products & services
  • Variable cost structure and capital efficient model
  • Experienced management team

Coupa Software Inc. (CSOFT): What Salesforce is to Sales, Coupa is to Spend

  • Disruptive cloud platform (measurable business value, unified platform, adoption by all)
  • Large addressable market ($16-25B)
  • Rapid platform adoption ($257B in spend under management; 1.5M employee users, 2M suppliers)
  • Attractive financial model ($109M LTM revenue, 71% LTM revenue growth)

Everspin Technologies (NASDAQ:MRAM): MRAM products offering persistence of non-volatile memory with the speed and endurance of RAM

  • Lost over $15M in EBITDA on $27M in revenue (minimal YOY growth)
  • Improves system performance and simplicity / bill of materials
  • 1st and only company with MRAM solutions
  • Application specific memory targeted for high value markets
  • 600+ customers and more than 60 million units shipped over last 8 months
  • Strategic relationship with GLOBALFOUNDRIES accelerates development and enables high volume production line for customer supply
  • Substantial IP portfolio with 300+ issued patents and 150+ patent applications
  • Existing ecosystem of SSD and RAID controllers are MRAM ready for product deployment
  • Significant design-win pipeline with market leaders in industrial, automotive and transportation, and enterprise storage markets
  • Attractive long-term growth and margin profile

MedEquities Realty Trust, Inc. (NYSE:MRT): Self-advised healthcare REIT in Nashville, TN with $509M invested in 24 properties and 1 mortgage and acquisition pipeline of $600M

  • Target growing acute and post-acute healthcare market driven by demographic trends and needs-based demand drivers
  • Differentiated investment strategy aligns with proven quality healthcare providers capitalizing on industry evolution and consolidation
  • Legacy-free portfolio of high-quality healthcare real estate generating predictable, growing and sustainable cash flows
  • Seasoned management team with a proven track record and extensive industry connections creating robust pipeline of off-market, relationship-driven investment opportunities
  • Scalable platform with acquisition growth capacity supported by clean, simple balance sheet

Motif Bio plc (NASDAQ:MTFB): Fund expenses associated with completion of two Phase 3 trials for iclaprim for the treatment of ABSSSI and prepare for a phase 3 clinical trial of iclaprim for the treatment of HABP, including VABP

  • Clinical stage biopharma company: novel antibiotics targeting multi-drug resistant bacteria
  • Iclaprim, a novel diaminopyrimidine antibiotic, is lead program
  • Efficacy and safety demonstrated in more than 600 patients and healthy volunteers
  • Attractive addressable patient segment: up to 936K patients annually in US hospitalized with ABSSI and co-morbid with renal impairment; 1.4M patients annually in US with HABP/VABP
  • Publicly traded on AIM since April 2015; raised $40M
  • Experienced team

Nutanix, Inc. (NASDAQ:NTNX): Cloud-based operating system for enterprise: bringing web-scale architecture to the masses

  • 106% year-over-year billings growth to $638M in FY16 (July), but lost $165M from operations
  • Enterprise cloud OS
  • $100B market opportunity
  • Broad customer adoption
  • Sustainable technology advantage
  • Rapidly growing software business
  • Attractive financial model

Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC): Leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes

  • 32% revenue growth in 1H:16 to $43M ($80M LTM) and EBITDA over $10M, up 45% 1H:16
  • Multi-drug medication risk mitigation analysis intervention software - first-mover advantage; TRHC uses novel software to risk stratify one patient or large populations simultaneously
  • Strong investor demand cited given consistent growth, large addressable market, and technology enhanced services

Here's to hoping the "IPO Window" stays open and markets continue rewarding strong issuers with great valuations and returns (and best of luck to you in choosing the best investment opportunities).

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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