This year has been a busy one for IPOs and the activity is staying strong right through the end of the year. Often times the best time to buy a newly IPOed stock is after the initial quiet period ends and that is no different from the three we have today.
All three have seen some volatility in the wake of their initial offerings, all three are trading at the lowest levels since the IPO, and yet all three are getting actively promoted by the analysis community and the reason is simple. They all offer utility to their clientele and in this age of accelerating digitization present an opportunity investors need to pay attention to.
1. Backblaze
Backblaze (NASDAQ:BLZE) is a cloud storage and data security play that some are likening to Cloudflare (NYSE:NET). The company IPOed to significant pomp but has since pulled back to just above the post-IPO levels.
Simply looking at things from the market cap perspective, Backblaze could be worth as much as 7500% growth if it comes even close to the size of Cloudflare today. Regardless, the analysts have come out with a strong vote of confidence in the stock rating it a firm buy.
At least six sell-side analysts have rated the stock so far with no neutrals and no sells. The bulk of the ratings are outperform with a consensus price target of $28.25. The Marketbeat.com consensus price implies about 32% of upside with shares trading near $21.25 and the high price target of $30 adds another few hundred basis points. In our view, this is just the first of many rounds of positive analyst chatter, it’s just a matter of time.
2. CI&T
Ci&T (NYSE:CINT) is interesting in that it provides strategy, design, and software engineering services for businesses and institutions. The firm’s mission is to aid the digital transformation by creating custom applications on a use-case basis that include machine learnings, AI, IoT/edge, analytics, cloud, and mobility.
The IPO met with some success after pricing at the low end of the expected range but it didn’t last long. Now, with the quiet period over, the stock is down more than 25% from its all-time high and offering an even better entry.
As with Backblaze, 6 sell-siders have come out with ratings so far with a consensus of firm buy. The split here is even with 3 buys and 3 outperforms with all price targets within the $15 to $17 range. Notably, 3 of the 6 targets are the high $17 which implies more than 30% of the upside for the stock.
3. Expensify
Expensify (NASDAQ:EXFY) is an application to help individuals, businesses, and institutions track and manage their spending. The cloud-based service is a centralized platform for users to manage cards, accounts, pay bills, generate receipts/invoices, and even book travel. The IPO was eagerly awaited with subscription driving the price up to the high end of the expected range. Since then prices spiked topped and tanked providing us the entry we have today.
Once again we have 6 sell-siders speaking out about this company and all are in favor. The difference is that here we have one Neutral rating putting the Marketbeat.com consensus at a Firm Buy but slightly weaker than with the other two. The consensus price target of $44.83, however, implies about 27% upside for the stock and we think this is a very easy target to reach once the volatility settles down.
