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First Look At Carbon Black's IPO

Apr. 15, 2018 10:05 AM ETCarbon Black, Inc. (CBLK) Stock5 Comments
Gary Alexander profile picture
Gary Alexander


  • Carbon Black, an endpoint security company, has submitted filings for its upcoming IPO.
  • This comes off the heels of the wildly successful Zscaler IPO, a company that focuses on "security as a service"
  • Carbon Black has been named a "Visionary" by Gartner in the endpoint security space, a market led by Symantec.
  • The company grew revenues by 39% y/y to $162.0 million in FY17.
  • It is also approaching cash flow breakeven, with an FCF margin of just -8% last year.

Carbon Black (NASDAQ:CBLK), a cybersecurity company that has been private since 2003, has submitted its S-1 filing ahead of a near-term IPO. The VC-backed company has been a well-known name in cybersecurity for many years, and its IPO - to be led by Morgan Stanley (MS) and JPMorgan (JPM) - has already drawn early headlines in the markets.

To date, 2018 has already been a hot year for IPOs - and for equities in general. Volatility has given equity trading desks a spurt of new life after several quarters of stagnation, with big banks reporting huge upswings in equity trading revenues for Q1. The same volatility, as suggested in the Wall Street Journal, has prodded more and more companies into going public this year before the IPO window closes.

Looking at the massive success of software IPOs this year so far, it's a small wonder that more are waiting at the gates. Zscaler (ZS) was the first to go public this year in March, followed closely by Dropbox (DBX); last week brought us Zuora (ZUO), an ERP platform. All three are trading up 40% or more relative to their IPO prices. April will further bring us Pivotal Software (PVTL), a company owned by Dell, and Smartsheet (SMAR) and DocuSign (DOCU) are expected to follow.

Now there's Carbon Black. Arguably, Carbon Black has the best comparison in fellow security company Zscaler, which shot up 106% on its first trading day to $32.50, well above its IPO price of $16. Shares have since come down somewhat to the $27 handle, but it's still a healthy gain for IPO investors. Given that Zscaler is the closest indication this year of how Carbon Black will perform, it wouldn't be surprising to see Carbon Black's deal oversubscribed and see similar strong performance.

Especially in the

This article was written by

Gary Alexander profile picture
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Great question, @ChuckXX ! I would also like to know what is unique about Carbon Black in the cyber security space?
ChuckXX profile picture
Gary; Does Carbon Black bring anything "special" or "unique" to the table???? Or is it just another cyber security company fighting for market share??? I find when it comes to really good long term investing if you don't have anything special then over the long haul its probably something you shouldn't own.
ChuckXX profile picture
Do you happen to know if and when will Tanium do an IPO????
FoxSr profile picture
helpful opinion to be careful. Thank you.
tavern123 profile picture
Red ink only!
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