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Is ironSource a Good Software Stock to Add to Your Portfolio?

Published 09/24/2021, 09:01 AM
Updated 09/24/2021, 09:30 AM
© Reuters.  Is ironSource a Good Software Stock to Add to Your Portfolio?

© Reuters. Is ironSource a Good Software Stock to Add to Your Portfolio?

Israel-based app economy business platform ironSource Ltd (IS) generated record revenue growth in its last reported quarter, driven by strong customer engagement. But while strategic product launches and partnerships could further boost its user growth, the company’s mixed financials and its stock’s stretched valuation could concern investors. So, is it worth betting on the stock now? Let’s find out.Based in Tel Aviv-Yafo, Israel, ironSource Ltd (IS) is a global software company that operates a business platform for the app economy. Through an SPAC merger with Thoma Bravo Advantage, the mobile adtech firm went public on June 29, 2021. A 181% dollar-based net expansion rate and double-digit revenue growth in its last reported quarter have helped IS’ stock gain 31.1% in price over the past month.

The company’s management expects its third-quarter revenue to range between $125 million - $130 million, representing 45% year-over-year growth at the midpoint.

However, IS’ shares have retreated 4.9% in price over the past five days to close yesterday’s trading session at $11.95. And although its recent partnership with Vodafone (NASDAQ:VOD) and the launch of its new user growth tool should help it achieve strong topline growth, its premium valuation could add to investor concerns.

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