Barely a month after its IPO, tax compliance software company Avalara has risen more than 2x over its original IPO price of $24.
The primary catalyst behind the rally has been a Supreme Court ruling that requires e-commerce sellers to collect sales taxes.
The ruling has sparked a bullish bet that this new requirement would cause a spike in interest for Avalara's software.
While some pickup in business is likely, it will not have a meaningful (definitely not 2x) impact on revenues, especially as competition in the space heats up.
At more than 11x forward revenues, Avalara shares are dearly valued.
Watch out for Avalara (AVLR) - the stock is headed for a correction. After pricing its IPO in the middle of June at $24, shares already jumped 87% on the first day of