U.S. initial public offerings (IPOs) raised $142 billion last year, representing an 82.1% year-over-year increase. The number of IPOs priced in 2021 increased 79.6% from the previous year. The record-high stock market triggered the IPO boom.
However, concerns about high inflation, supply chain disruptions, and central bank monetary policy tightening have caused several IPO stocks to retreat from their all-time highs. Since many of these stocks are now trading near their fair values considering their fundamental strength, they could regain their lost momentum this year.
Wall Street analysts expect shares of Coinbase Global, Inc. (COIN), AppLovin Corporation (APP), UiPath Inc. (PATH), Olaplex Holdings, Inc. (OLPX), and SentinelOne, Inc. (S), which went public last year, to rebound 30% to 75% in price. So, let’s take a look at these names.
Coinbase Global, Inc. (COIN)
COIN provides financial infrastructure and technology for the crypto economy. The San Francisco-based concern offers the primary financial account in the crypto economy for retail users. The company went public through a direct listing process on April 14, 2021.
On September 14, COIN priced 3.375% senior notes due 2028 and 3.625% senior notes due 2031. The capital raised from the note issues is expected to bolster the company’s balance sheet, and it intends to use the net proceeds for general corporate purposes.
For the fiscal third quarter, ended September 30, COIN’s total revenue increased 316% year-over-year to $1.31 billion. Its net income and net income per share attributable to common stockholders stood at $406.10 million and $1.62, respectively, up 399.5% and 604.3% from the prior-year quarter. Its adjusted EBITDA rose 401.7% from the same period last year to $618.22 million.
Analysts expect COIN’s EPS to be $13.68 for its fiscal year 2021. Over the past five days, the stock has gained 0.3% in price to close yesterday’s trading session at $234.70.
Of the 16 Wall Street analysts rating COIN, 13 have rated it Buy, one has rated it Hold, while two have rated it Sell. The 12-month median price target of $402.33 indicates a 71.4% potential upside. The price targets range from a low of $160.00 to a high of $600.00.
AppLovin Corporation (APP)
Palo Alto, Calif.-based APP constructs software-based platforms for mobile app developers to enhance the marketing and monetization of apps worldwide. Its offerings include AppDiscovery, an automation and optimization solution for business clients, and MAX, an app-bidding solution. The company went public in a traditional IPO process on April 15, 2021.
On January 3, APP announced that it had completed the acquisition of Twitter, Inc.’s (TWTR) MoPub business. The acquisition and the creation of a unified platform are expected to process more than $15 billion of annualized advertiser spending by 2023.
APP’s revenue increased 90.4% year-over-year to $726.95 million in its fiscal third quarter, ended September 30. Its income from operations and net income were $45.05 million and $0.14 million, respectively, up substantially from their negative year-ago values. And its adjusted EBITDA rose 126.3% from the prior-year quarter to $190.70 million.
The $0.79 consensus EPS estimate for its fiscal year 2022 indicates a 426.7% year-over-year increase. And the $3.76 billion consensus revenue estimate for the same period reflects a 35.2% improvement from the prior year.
The stock has gained 29.3% in price since it went public on April 15 to close yesterday’s trading session at $84.33. It has gained 25.5% over the past six months.
Of 12 Wall Street analysts that have rated APP, 11 rated it Buy, while one rated it Sell. The 12-month median price target of $114.92 indicates a 36.3% potential upside. The price targets range from a low of $82.00 to a high of $128.00.
UiPath Inc. (PATH)
PATH in New York City offers an end-to-end automation platform that provides a range of robotic process automation (RPA) solutions. The company develops UiPath Studio, a platform designed for RPA developers. It began trading on the New York Stock Exchange on April 21, 2021.
On January 10, PATH announced a collaboration with Avison Young, a firm that uses its intelligence platform to provide clients with insight and advantages. The collaboration is expected to deploy PATH’s robots to enhance work efficiency. In December, PATH launched a collaboration with Accenture PLC (ACN) to accelerate technology transformation efforts. The collaborations might prove to be profitable for the company.
For its fiscal third quarter, ended October 31, PATH’s total revenue increased 49.9% year-over-year to $220.82 million. This can be attributed to a 42.1% rise in revenue from the prior-year quarter from licenses to $111.61 million. Its gross profit stood at $177.72 million, up 36.8% from the same period last year.
The Street expects PATH’s EPS to improve 43.9% year-over-year to $242.96 million for its fiscal quarter ending April 2022.
PATH’s stock has gained 0.4% in price over the past five days to close yesterday’s trading session at $39.75.
11 of the 18 Wall Street analysts rating PATH have rated it Buy, while seven have rated it Hold. The 12-month median price target of $64.00 indicates a 61% potential upside. The price targets range from a low of $47.00 to a high of $85.00.
Olaplex Holdings, Inc. (OLPX)
Santa Barbara, Calif., based OLPX manufactures and sells hair care products. Its offerings include hair care shampoos and conditioners for treatment, protection, and hair maintenance. OLPX started trading on the Nasdaq Global Select Market on Sept/ 30, 2021.
On Nov. 29, OLPX announced the expansion of its distribution by making its retail products available at more than 1,250 beauty retailers stores and on ulta.com from January 2022. The new product availability is expected to add to the company’s revenue stream and bolster its position in the hair care industry.
OLPX’s net sales increased 80.7% year-over-year to $161.62 million in its fiscal third quarter, ended September 30. Its operating income rose 98.3% from the same period prior year to $87.04 million. Its adjusted net income and adjusted net income per share improved 62.6% and 57.1%, respectively, from the prior-year quarter to $74.43 million and $0.11.
The Street’s $0.48 EPS estimate for its fiscal year 2022 reflects a 26.3% rise from the prior year. And the Street’s $762.78 million revenue estimate for the same period indicates a 29.5% year-over-year increase.
The stock has declined 4.6% in price intraday to close yesterday’s trading session at $23.89.
Of 12 analysts rating OLPX, 10 have rated it Buy, while two have rated it Hold. The 12-month median price target of $34.83 indicates a 45.8% potential upside. The price targets range from a low of $29.00 to a high of $50.00.
SentinelOne, Inc. (S)
S is a cybersecurity provider in the United States. The Mountain View, Calif., company operates the Singularity Platform that delivers AI-powered autonomous threat prevention and detection. The company went public on the New York Stock Exchange on June 30, 2021.
On January 11, S announced the integration of its security and IT teams for more effective incident response. The integration is expected to accelerate the response plan across endpoint and cloud environments. This might prove to be beneficial for the company.
On December 6, S unveiled Singularity Mobile, a new AI-powered mobile security solution. The new offering should add to the company’s revenue stream.
For its fiscal third quarter, ended October 31, S’ revenue increased 128.1% year-over-year to $56.02 million. Its non-GAAP gross profit improved 162% from the prior-year quarter to $37.42 million. And for the nine months ended October 31, the company’s cash, cash equivalent, and restricted cash balance stood at $1.67 billion, up 294.7% from the same period last year.
Analysts expect EPS to increase 10.4% year-over-year for its fiscal year 2023. And the Street expects S’ revenue for the same period to improve 73.1% from the prior year to $345.91 million.
Since the stock went public on June 30, it has gained 10.6% in price to close yesterday’s trading session at $46.99. It has gained 8.4% over the past five days.
Of 12 analysts that have rated S, 10 rated it Buy, while two rated it Hold. The 12-month median price target of $67.92 indicates a 44.5% potential upside. The price targets range from a low of $50.00 to a high of $82.00.
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COIN shares were trading at $228.23 per share on Thursday afternoon, down $6.47 (-2.76%). Year-to-date, COIN has declined -9.57%, versus a -2.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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