IPOs of 2017
Looking back at some of 2017’s IPOs could help give some perspective on how the year was, and the state of the companies’ respective industries.
The lessons of the past could shape our perspectives for the future. And, that’s particularly true with stock trading and investing. As 2018 takes shape, it’s time to resolve to trade more efficiently and successfully. The right trading software and opinions of experienced analysts can help. Motley Fool analyst Eric Volkman looks back at 2017, particularly the IPOs that cropped up in the stock market. There were 160 new share issues that were priced in 2017, as per data from Renaissance Capital. This figure is slightly lower than the 2010 to 2016 average. Not all issues are equally noted, because of factors such as brand popularity and the size of the companies involved. Looking back at a few prominent IPOs of 2017 could probably give some insight.
Online Real Estate Stock Redfin
Volkman starts with Redfin ($RDFN), an online real estate stock, which has been quite popular since its IPO in July. The stock was significantly helped by its first earnings report after its IPO, where it touched the upper limit of its guidance. Its revenue increased 35% year-over-year to nearly $105 million. Net income exceeded more than thrice to $4.3 million.
But after those highs, the next quarter was a gloomy one. Redfin missed analyst revenue estimates and its net profit figure was in the red. Following that though, there has been increased investor interest thanks to increasing demand in the housing market that doesn’t seem to be slowing. $RDFN now has a price of $29.45 per share which is nearly double its IPO price which was $15.
Prepared Meal Delivery Company Blue Apron
Meal delivery service Blue Apron ($APRN) has not been a great market performer since its June IPO. Its stock now trades at what is lesser than even half its $10 per share IPO price. The loss is deepening and investors are naturally concerned about it. Its Q3 bottom-line was in red, by more than $87 million. That’s significantly more than what it lost in the corresponding quarter of 2016, $37 million. Net revenue only had a 3% rise to nearly $211 million.
The stepping down of the company’s CEO in November brought about some excitement, but analysts believe that $APRN still doesn’t have a significant competitive moat. Analysts model bottom-line losses for Blue Apron for the current fiscal year and the next.
Streaming TV Device Maker Roku
Roku ($ROKU) has been a success story. The company is a streaming TV device manufacturer based in California and is quite a popular name. The stock has gone through an impressive 280% hike from its $14 per share price that it set ahead of its IPO in September.
Roku blasted estimates and grew its net revenue to $125 million, a 40% rise. It had a net loss close to $9 million. There were steep improvements in the various operational metrics such as average revenue per user, number of active accounts, and total hours streamed.
However, Roku has been unprofitable almost consistently. As a result, analysts expect full-year losses for the years 2017 and 2018. Most Roku customers use it for watching YouTube and Netflix contents from which it doesn’t derive much revenue. Volkman reminds us though that investors are concentrating on the positives, considering the stock’s price appreciation.
Video and Photo Messaging Service Snap
Messaging service provider Snap ($SNAP) did go through a tough period in the initial months, but the shares have now managed to claw back. The stock is, however, still trading short of the share price of $17 per share during its IPO in March. From being a messaging service provider, Snap is expanding. It has struck deals with Comcast and Time Warner, while it has also introduced the Spectacles video capture goggles.
All these efforts, though, haven’t quite contributed to profitability. Right now Snap is in the red in Q3 by a massive $443 million. Moreover, the user count and revenue have not subsequently grown, in spite of its app being redesigned successfully. This redesign did raise the share price, but overall things aren’t looking profitable. But Volkman points out that some analysts still believe in $SNAP, rating it a “buy” or even a “strong buy”, according to Yahoo Finance.
This analysis of a few of 2017’s IPOs representing various industries should give you some perspective on the industries and stocks you’d like to focus on this year. TradeZero was the firm that allowed traders the ability to short all IPO on the first day of trading. Happy stock trading!
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