While most of the economies were severely affected by the COVID-19 pandemic last year, it was a great year for IPOs, which were  driven by a low-interest-rate environment and the low-cost listing options, such as the special purpose acquisition companies (SPACs) route. In total, 480 companies went public in the U.S. last year. The IPO transaction rate has been even higher so far this year, with 536 IPOs already executed, according to Stock Analysis.

Because the Fed is not expected to increase benchmark interest rates anytime soon, more companies are expected to go public this year. Investors’ increasing interest in IPO stocks is evident in the Renaissance IPO ETF’s (IPO) 10.4% gains over the past month compared to the SPDR S&P 500 Trust ETF’s (SPY) 1.4% returns.

Given the IPO boom, Wall Street believes Coinbase Global, Inc. (COIN), C3.ai, Inc. (AI), and Similarweb Ltd. (SMWB), which went public recently, could rally robustly in the coming months.

Coinbase Global, Inc. (COIN)

COIN provides financial infrastructure and technology for the crypto economy. The company provides a primary financial account for the crypto economy, a platform to invest, store, spend, earn, and use crypto assets, and an online marketplace for hedge funds, money managers, and corporations, among others. COIN’s shares hit their  $429.54  all-time high  on their  market debut on April 14, 2021, before closing at $328.28.

On May 20, COIN priced $1.25 billion of  convertible senior notes. The capital raising  could bolster COIN’s balance sheet with low-cost capital, maintain its operating freedom, minimize dilution and expand its ability to fuel innovation and growth regardless of market conditions.

COIN’s revenue increased 791.7% year-over-year to $1.98 billion for its fiscal first quarter, ended March 31, 2021. Its operating income grew 2,447.3% year-over-year to $987.71 million. Its net income came in at $771.46 million, which represents a 2,312.8% year-over-year increase. The company’s adjusted EBITDA was $1.12 billion, up 1,922.2% year-over-year.

The company’s revenue is expected to increase 402.1% year-over-year to $6.41 billion in its fiscal year 2021. COIN shares have lost 0.8% over the past month to close yesterday’s trading session at $222.60. However, Wall Street analysts expect the stock to hit $381.93 in the near term, which indicates a potential  71.6% gain.

C3.ai, Inc. (AI)

AI operates as an enterprise artificial intelligence software company. It offers integrated turnkey enterprise artificial intelligence applications for various market segments, including oil and gas, chemicals, utilities and manufacturing. Its shares more than doubled in their  market debut on December 9, 2020.

This month, AI announced a strategic partnership with NCS that is focused on delivering enterprise artificial intelligence solutions to clients in Southeast Asia (SEA) and Australia/New Zealand (ANZ) across multiple industries. The partnership  is expected to expand AI’s market reach.

AI’s total revenue increased 25.6% year-over-year to $52.28 million for the fiscal fourth quarter, ended April 30, 2021. Its gross profit grew 26.3% year-over-year to $40.57 million, while its net loss decreased 21% year-over-year to $24.05 million. Also, its loss per share decreased 70.7% year-over-year to $0.24.

For its fiscal year 2023, analysts expect AI’s EPS to increase 12.2% year-over-year. Its revenue is expected to increase 34.1% year-over-year to $329.10 million in its fiscal year 2023. The stock has soared nearly 3% over the past month to close yesterday’s trading session at $57.89. Wall Street analysts expect the stock to hit $101.57 in the near term, indicating a potential  75.4% gain.

Similarweb Ltd. (SMWB)

Headquartered in Tel Aviv, Israel, SMWB provides website traffic solutions through AI-driven data analytics worldwide. It offers four solutions: digital research intelligence, digital marketing, shopper intelligence and investor intelligence. SMWB serves companies across various industries, including  retail, travel, consumer finance, and logistics companies. It hit a high of $22 on its market debut on May 12, 2021.

Check Point Software Technologies Ltd. (CHKP) and SMWB announced a new alliance on March 3, 2021, to integrate statistical domain trends and security web threats generated by leveraging CHKP’s ThreatCloud with SMWB’s digital intelligence solutions. Benjamin Seror, Chief Product Officer at SMWB, said “This alliance recognizes that security is now an essential component of a successful digital growth strategy.”

The company’s revenue increased 32.4% year-over-year to $93.49 million for its  fiscal year ended December 31, 2021. SMWB’s gross profit increased 43.9% from the same period last year to $72.07 million.

Analysts expect SMWB’s EPS to increase 49.7% year-over-year in its fiscal year 2021. Its revenue is expected to increase 28.3% year-over-year to $161.09 million in fiscal 2022. It lost 9.5% over the past month to close yesterday’s trading session at $18.82. However, Wall Street analysts expect the stock to hit $27.67 in the near term, which indicates a potential 47% upside.

COIN shares were trading at $219.52 per share on Tuesday afternoon, down $3.08 (-1.38%). Year-to-date, COIN has declined -33.13%, versus a 13.30% rise in the benchmark S&P 500 index during the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...

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