Research Firm with a Qualitative Overlay, Pearl Gray Equity and Research

Pearl Gray Equity and Research

Research Firm with a Qualitative Overlay

Quantitative fund & research firm with a qualitative overlay. 

Our coverage: General U.S. with a skew towards the primary sector. 

Methods: Smart Beta/Factor Pricing, Neural Networks, Street Gossip, and Common Sense.

Equity Bottom-Up

<ul>
<li>Wix.com Ltd. trumps earnings, suggesting its business model is taking off amid robust growth in the SME space.</li>
<li>The company has yet to achieve profitability, but its up-the-line margins are improving.</li>
<li>Website building tool Wix.com Ltd. (WIX) beat its fourth-quarter earnings estimates on Wednesday, illustrating continued progress with a model suitable to today's business environment. 
</li>
</ul>


Wix.com Ltd. trumps earnings, suggesting its business model is taking off amid robust growth in the SME space.
The company has yet to achieve profitability, but its up-the-line margins are improving.
Website building tool Wix.com Ltd. (WIX) beat its fourth-quarter earnings estimates on Wednesday, illustrating continued progress with a model suitable to today's business environment. 



Wix.com Beat Q4 Earnings, Prospects Are Bright

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Founded in 2003 by the CEO Anthony Casalena, Squarespace is getting ready to complete its direct public listing on May 19 on the New York Stock Exchange. Squarespace raised $300 million ($68.42 per share) in March 2021 from investors including Tiger Global, D1 Capital Partners, and Fidelity Management &amp; Research Company, valuing the company at nearly<a href="https://www.reuters.com/article/us-squarespace-funding-idUSKBN2B832O" target="_blank" rel="noopener"> $10 billion. </a>Other major investors of the company include Accel, Index Ventures, and General Atlantic. Squarespace joins a list of numerous technology companies that have become public through the direct listing route, including <a href="https://www.smartkarma.com/entities/palantir-technologies-inc" target="_blank" data-smartkarma-citation="entities:27728:1" rel="noopener">Palantir Technologies Inc (PLTR US)</a>, <a href="https://www.smartkarma.com/entities/roblox-corp" target="_blank" data-smartkarma-citation="entities:29697:1" rel="noopener">ROBLOX Corp (RBLX US)</a>, and <a href="https://www.smartkarma.com/entities/coinbase-global-inc" target="_blank" data-smartkarma-citation="entities:32227:1" rel="noopener">Coinbase (COIN US)</a>. Squarespace's shareholders have registered to sell about 40.4 million common shares with the CEO Anthony Caslena holding a 68.2% stake. Squarespace is a one-stop-shop platform for websites creation, domains, e-commerce, and marketing tools for companies and organizations to manage their social media presence. The company generated sales of $621.2 million in 2020, up 28.1% YoY. Its sales growth accelerated by 31.3% YoY to $179.7 million in 1Q 2021. Although the company benefited from higher sales and gross margins, its operating margins declined from 12.7% in 2019 to 6.5% in 2020, which was caused by higher R&amp;D and sales &amp; marketing expenses.

Founded in 2003 by the CEO Anthony Casalena, Squarespace is getting ready to complete its direct public listing on May 19 on the New York Stock Exchange. Squarespace raised $300 million ($68.42 per share) in March 2021 from investors including Tiger Global, D1 Capital Partners, and Fidelity Management &amp; Research Company, valuing the company at nearly $10 billion. Other major investors of the company include Accel, Index Ventures, and General Atlantic. Squarespace joins a list of numerous technology companies that have become public through the direct listing route, including Palantir Technologies Inc (PLTR US), ROBLOX Corp (RBLX US), and Coinbase (COIN US). Squarespace's shareholders have registered to sell about 40.4 million common shares with the CEO Anthony Caslena holding a 68.2% stake. Squarespace is a one-stop-shop platform for websites creation, domains, e-commerce, and marketing tools for companies and organizations to manage their social media presence. The company generated sales of $621.2 million in 2020, up 28.1% YoY. Its sales growth accelerated by 31.3% YoY to $179.7 million in 1Q 2021. Although the company benefited from higher sales and gross margins, its operating margins declined from 12.7% in 2019 to 6.5% in 2020, which was caused by higher R&amp;D and sales &amp; marketing expenses.

<a href="https://www.nasdaq.com/articles/e-commerce-platform-bigcommerce-sets-terms-for-%24130-million-ipo-2020-07-28" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings Inc (BIGC US)</a> plans to complete its IPO next week. The IPO price range has been determined at $18 to $20. The company plans to offer 6.9 million shares. At the high end of the IPO price (excluding greenshoe option), the company would raise nearly $138 million.Our valuation analysis of BigCommerce suggests an implied market cap of $2.3 billion and a target price per share of $30.9, which suggests a 62% upside to the mid-point of the IPO price range of $19. We are also including BigCommerce in our model stock portfolio. Our valuation is based on P/S, using our estimated sales of $189.4 million in 2021 and P/S multiple of 12x. We used fully diluted shares of 74 million shares to derive our target price valuation. Our P/S valuation multiple of 12x represents a 20% discount to the average P/S valuation of the comps in 2021. It also represents a 67% discount to the P/S multiple of 36.7x for Shopify.

BigCommerce Holdings Inc (BIGC US) plans to complete its IPO next week. The IPO price range has been determined at $18 to $20. The company plans to offer 6.9 million shares. At the high end of the IPO price (excluding greenshoe option), the company would raise nearly $138 million.Our valuation analysis of BigCommerce suggests an implied market cap of $2.3 billion and a target price per share of $30.9, which suggests a 62% upside to the mid-point of the IPO price range of $19. We are also including BigCommerce in our model stock portfolio. Our valuation is based on P/S, using our estimated sales of $189.4 million in 2021 and P/S multiple of 12x. We used fully diluted shares of 74 million shares to derive our target price valuation. Our P/S valuation multiple of 12x represents a 20% discount to the average P/S valuation of the comps in 2021. It also represents a 67% discount to the P/S multiple of 36.7x for Shopify.

Israel

Wix.com Ltd. operates and develops a web platform. The Company's platform offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms.

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Wix.Com Ltd (WIX US)

Wix.com Beat Q4 Earnings, Prospects Are Bright

Website building tool Wix.com Ltd. (WIX) beat its fourth-quarter earnings estimates on Wednesday, illustrating continued progress with a model...

Pearl Gray Equity and Research

Squarespace Direct Listing Preview

Squarespace is getting ready to complete its direct public listing on May 19 on the New York Stock Exchange. In this insight, we provide the key...

Douglas Kim

BigCommerce IPO Valuation Analysis

BigCommerce Holdings Inc (BIGC US) plans to complete its IPO next week. The IPO price range has been determined at $18 to $20. The company plans to...

Douglas Kim

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