This week Demandware (DWRE) is offering a little over 3M shares in a follow-on offering after their IPO in early 2012. This deal falls into the “timing is everything” category with the shares up sharply following strong results in 2013. After a year trading around the mid-$20’s the stock has vaulted to $63/share in the last several months. At the current price the market cap is $2B and represents nearly 25x sales.

DWRE Chart

DWRE since the IPO

Demandware is a hosted eCommerce platform that has positioned themselves as the “best of both worlds” in terms of offering retailers high levels of functionality but at low cost and with easy implementation.

Revenue and customer growth have continued since the IPO. From $56M in 2011 the company posted over $79M for 2012. Consensus expectations this year and the next two are $101M, $138M and $186M respectively. The 2013 estimate looks conservative by a few million. The company uses a SaaS model.

The company appears to still be in an “investment mode” which means substantial profitability remains to be seen although most expect to see meaningful EBITDA (~$5M) beginning in 2014.

At current prices investors will have to be patient. We’ve included a link here to the original IPO roadshow slides. There is also a transcript of the IPO presentation available on our transcripts page.

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