4 Recent IPOs Wall Street Analysts Predict Will Rally 80% or More
Bullish market sentiment and a low-interest-rate environment have coaxed many IPOs to market this year. And more IPOs are lined up this month despite COVID-19-omicron-related concerns. Wall Street analysts expect...
Bullish market sentiment and a low-interest-rate environment have coaxed many IPOs to market this year. And more IPOs are lined up this month despite COVID-19-omicron-related concerns. Wall Street analysts expect recently listed stocks Robinhood Markets (HOOD), DLocal (DLO), ironSource (IS), and Sprinklr (CXM) to rally by more than 80% in price in the near term. So, we think it could be wise to add these names to one’s watchlist now.
The low-interest-rate environment has contributed to the IPO boom over the past year. According to a Stock Analysis report, there has been a record number of 1,003 IPOs this year, representing a 138.8% increase over the same period last year. With a more than $100 billion market valuation, Rivian Automotive Inc.’s (RIVN) stock market debut is considered the world’s biggest IPO in 2021.
And the IPO frenzy seems far from over. More IPOs are lined up this month. Investors’ concerns over rising inflation and the omicron variant have been keeping the stock market volatile. Nevertheless, investors remain bullish as the economy gradually recovers, and corporate earnings are expected to be strong in the fourth quarter. According to a Factset report, industry analysts expect the S&P 500 to report record-high EPS in 2022.
So, we think recently listed stocks Robinhood Markets, Inc. (HOOD), DLocal Limited (DLO), ironSource Ltd. (IS), and Sprinklr, Inc. (CXM) could be good additions to one’s watchlist now. Wall Street analysts expect these stocks to rally by more than 80% in the near term.
Robinhood Markets, Inc. (HOOD)
Famous financial services platform provider HOOD is focused on developing an application for cash management, such as stocks, ETFs, options, and cryptocurrency. The Menlo Park, Calif., company’s platform facilitates trading in the U.S. listed stocks, exchange-traded funds (ETFs), options, American depository receipts (ADRs), and cryptocurrency trading.
On December 1, HOOD announced a new feature in its efforts to become a single money app destination that will allow its members to transfer stocks, ETFs, and specific options contracts from any individual, non-retirement brokerage accounts. HOOD also said that it would reimburse the transfer fee of up to $75 charged by the other brokerage to make the transfer if requested by the customer.
HOOD’s revenue for its fiscal third quarter, ended September 30, 2021, increased 35% year-over-year to $364.90 million. The company’s transaction-based revenues increased 32% to $267 million, with cryptocurrencies rising 860% year-over-year to $51 million. Its assets under custody (AUC) increased 115% year-over-year to $95 billion, while its Monthly Active Users (MAUs) increased 76% year-over-year to $18.90 million.
Analysts expect HOOD’s EPS and revenue for its fiscal year 2022 to increase 89.5% and 21.5%, respectively, year-over-year to $0.72 and $2.21 billion. The stock has lost 41.8% in price over the past month to close Friday’s trading session at $21.55. However, Wall Street analysts expect the stock to hit $45.42 in the near term, indicating a potential 110.7% upside.
DLocal Limited (DLO)
Headquartered in Montevideo, Uruguay, DLO is focused on enabling global merchants to connect with emerging market users. The company offers a payments platform for emerging markets through its direct application programming interface (API), one technology platform and one contract, collectively referred to as the One dLocal model.
On September 23, 2021, DLO announced the launch of its service, Direct Issuing, which will enable merchants to issue their own branded prepaid card for online and in-store shopping in local currencies. SVP of Product at DLO, Rodrigo Sanchez Prandi, said, “Direct issuing is part of our One dLocal integration. Through one API, one platform, and one contract, you can easily manage your users’ cards, send funds and approve payments with no extra hassle.” Direct Issuing is expected to attract more merchants to DLO’s platform.
For its fiscal third quarter, ended September 30, 2021, DLO’s Total Payment Volume (TPV) increased 217% year-over-year to $1.80 billion. The company’s revenue increased 123% year-over-year to $68.60 million, while its adjusted EBITDA increased 110.4% year-over-year to $26.30 million.
DLO’s EPS and revenue for its fiscal year 2022 are expected to increase 69.2% and 67.9%, respectively, year-over-year to $0.44 and $400.37 million. The stock has plunged 35.6% in price over the past month to close Friday’s trading session at $32.31. However, Wall Street analysts expect the stock to hit $69 in the near term, indicating a potential 113.5% upside.
ironSource Ltd. (IS)
Israel-based IS provides a business platform for app developers and telecom operators. Its platforms consist of the Sonic solution suite that supports developers to launch, monetize, and scale their apps and games. Also, its Aura solution suite helps telecom operators create new engagement touchpoints.
On October 25, 2021, IS announced the acquisition of Bidalgo, which empowers app marketers to drive growth by providing them with visibility and control over the marketing investment. The acquisition will likely allow IS to offer a wide range of marketing-focused products and deepen its market presence across the app economy, including social, dating, and e-commerce.
IS’ revenue for its fiscal third quarter, ended September 30, 2021, increased 60% year-over-year to $140 million. The company’s non-GAAP net income increased 76.4% year-over-year to $46.26 million, while its adjusted EBITDA increased 70% year-over-year to $50.90 million. In addition, its non-GAAP EPS came in at $0.04, representing a 33.3% year-over-year rise.
IS’ EPS and revenue for its fiscal year 2022 are expected to increase 42.9% and 31.8%, respectively, year-over-year to $0.10 and $711.49 million. The stock has lost 28.2% in price over the past month to close Friday’s trading session at $7.97. However, Wall Street analysts expect the stock to hit $15.13 in the near term, indicating a potential 89.8% upside..
Sprinklr, Inc. (CXM)
CXM develops and provides a cloud-based unified customer experience management platform for enterprises worldwide. The New York City-based company helps organizations in marketing, advertising, research, care, sales, and engagement across modern social, messaging, chat, and text channels.
CXM announced the introduction of the Sprinklr AI Studio, a new capability in Sprinklr Modern Research, on November 9. Company CTO Pavitar Singh, said, “With Sprinklr AI Studio, anyone can quickly build AI models with powerful natural language processing and advanced machine learning, transforming the way brands engage with customers across modern digital channels.”
For its fiscal second quarter, ended July 31, 2021, CXM’s total revenue increased 27% year-over-year to $118.70 million. The company’s subscription revenue increased 25% year-over-year to $103.30 million. Also, its non-GAAP gross profit increased 23.6% year-over-year to $82.64 million.
Analysts expect CXM’s EPS and revenue for its fiscal 2023 to increase 37.1% and 20.9% year-over-year to $0.22 and $581.40 million, respectively. The stock has lost 14.7% in price over the past three months to close Friday’s trading session at $13.12. However, Wall Street analysts expect the stock to hit $25.75 in the near term, indicating a potential 96.2% upside.
HOOD shares fell $0.25 (-1.16%) in premarket trading Monday. Year-to-date, HOOD has declined -38.97%, versus a 22.91% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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