Market Consensus: Most analysis supports a continuing bull market through year-end underpinned by analyst estimates that remain too conservative for 2022 and still-very-low interest rates. We’re in a very busy IPO market but pricing and subsequent trading have been a little choppy.
Last Week: Things played out as we wrote in our note last week – Rent the Runway (RENT) was a turd and Fluence Energy (FLNC) did very well with a total return of 28% from the IPO. (I still own that one in the RMP.)
These are the ones we’re working on this week: (We’re also getting an early start on Rivian due next week.)
- Allbirds (BIRD) – Another “making the world a better place” consumer brand play. Their wool-based shoes became popular with the “techbro” set and have expanded from there both in terms of product diversity and market reach. Like Warby Parker (WRBY) they have decided to build out their own physical stores. Personally I don’t like the shoes but the recent success of Swiss show brand On (ONON) may translate into solid investor interest. ONON is at 17.5x EV/Sales vs BIRD at ~7.2x at the $12-$14 range.
- NerdWallet (NRDS) – These guys started out as a site consumers used to find the best deals on credit cards. They have broadened out to cover more types of products and additional tools to help consumers understand and manage their financial health. Their positioning is a bit of a stretch and a transition to earning fees and commissions in addition to advertising could be tricky.
- Arhaus (ARHS) – Think of these guys as Restoration Hardware (RH) with less drama. Their stuff is very well designed and made. Their products are quite expensive and targeted to “highly affluent” customers and markets. Although they don’t address it in the roadshow supply constraints have been a signficant factor limiting their growth. RH is at 5.8x PS and 39x PE vs ARHS at ~3.3x PS and ~21x EBITDA at the proposed $14-$17 range.
(If you want to get an automatic email about new content like this you can sign up with this form.)
Pipeline: Somewhat quiet week for new filings although there was a $3B IPO filed for Nu Holdings (NU) a digital banking platform serving Brazil, Mexico, and Colombia. Things in Brazil haven’t been wonderful.
New Street Coverage: Most coverage is out already for this week but next week another seven will roll out. I’m curious to see how the analysts figure out how to put a buy on GitLab (GTLB) at current prices. The week of the 15th we will get coverage on Vita Coco (COCO) which should help the stock.
Lockups Off: Bowman Consulting (BWMN), Onion Global (OG), Waterdrop (WDH), Freshworks (FRSH), Global-E (GLBE), iPower (IPW), SimilarWeb (SMWB), Procore (PCOR), KnowBe4 (KNBE), Flywire (FLH), Figs (FIGS), Marqueta (MQ), Dutch Brothers (BROS), Duolingo (DUOL), AvidXchange (AVDX), Oatly (OTLY), dLocal (DLO), Xometry (XMTR) and Intapp (INTA) are ones we will be taking a look at with some charts.
Parting Thoughts: Every source I rely on is pointing to higher prices for risk assets and a “golden age” for technology. When everyone agrees and I feel very smart I get nervous. We are solidly long across the board but vigilant about potential surprises and looking for opportunities to balance our portfolios with some new short positions if we can find any. More names like Lemonade (LMND) would be nice!