A Possible SVMK Inc (NASDAQ:SVMK) Bottom in Sight?

SVMK Inc (NASDAQ:SVMK) is one of a class of highly-marketed Silicon Valley “exit plays” that has powered onto the broad stock market over the past two years attached to themes like “big data”, “cloud services”, and “AI”. The company has been around for quite some time, run for years by Sheryl Sandberg’s late husband David Goldberg.

We call this an “exit play” because it was harbored on Second Market as a private name for a great deal of its growth curve, and then IPO’d likely above a reasonable value, and more importantly, was powerfully marketed on IPO day after a very strong road show, resulting in a trading high ($20/share) more than 122% above where analysts had pegged a reasonably IPO pricing ($9/share). However, after a tough dive out of the gates, the stock is now likely starting to reach some very interesting levels is worth a serious look.

SVMK Inc (NASDAQ:SVMK) went public back on September 26 to bigtime success, as noted. The company’s up-sized 15.0 mln share IPO priced initially at $12. However, with tech stocks and speculative names taking a heavy beating so far in October, it isn’t too surprising to see investors who chased into SVMK on IPO day start to run for the hills.

We bring it up now because Monday was the expiration of the Quiet Period, which means analysts from firms connected with the IPO are now allowed to publish research and estimates on the company for the first time. We have already seen a number of such reports, and can perhaps expect more in the days that follow.

At this point, BofA Merrill Lynch and SunTrust each assigned a Buy rating and $16 target on the stock — 23% higher than the stock’s closing price on Friday.

JMP also put a $16 target on the stock, along with its Market Outperform rating.

JP Morgan initiated the stock with an Overweight and $15 price target.

The only firm to get cautious was UBS, who assigned a Neutral rating. However, that rating was accompanied by a prrce target . But, that firm also has a $15 target on the stock, which represents about 30% upside from Monday’s closing levels.


The Big Picture

SVMK Inc (NASDAQ:SVMK) promulgates itself as a provider of survey software products that are used by organizations to engage with their customers and employees. The company’s product, SurveyMonkey, has been available since after the company’s founding in 1999.

The company’s survey platform produces over 19M responses every day around the world. Survey Monkey can boast nearly 610K different customers from well over 250K different companies. The company has amassed a base of paying users that covers very nearly all of the biggest 500 players in corporate America.

According to company materials, unlike “Big Data” platforms, which focus on the “what” of the behavior of an organization’s users or constituents, SVMK employs a People Powered Data approach that captures the “why”. The company believes the People Powered Data approach provides more valuable insight that better allows organizations to respond to constituents’ needs.

SVMK’s survey platform uses SurveyMonkey Genius, a proprietary artificial intelligence-based survey creation assistant, which allows organization to build surveys by using insights extracted from SVMK’s database.

Given that the expected range of the IPO was around $9-$11/share, and that was just 5x annualized 2018 sales, this could be a bargain before long.


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