Inovalon S-1 Analysis

Inovalon Basic Info

Exchange: NASDAQ

Proposed Symbol: INOV

State of Inc: DE

Offer Amount: $500 mm

Employees: 2456

CEO: Keith Dunleavy

Description from S-1: “Inovalon is a leading technology company that combines advanced cloud-based data analytics and data-driven intervention platforms to achieve meaningful insight and improvement in clinical and quality outcomes, utilization, and financial performance across the healthcare landscape.”

From the S-1

Underwriters:

  • Lead Underwriters: Goldman Sachs (GS), Citigroup (C), Morgan Stanley (MS)
  • Other Underwriters: Piper Jaffray (PJC), UBS (OUBS, UBS)

First 9 months 2014 Sales: $271.7 mm

Sales Growth (’13-’14): 33%

’14 EBITDA: $103.1 mm

Annual EBITDA Growth: 77%

First 9 months 2014 Earnings: $51.9 mm

Annual Earnings Growth: 92%

Competitors: Veeva Systems (VEEV), Trinity Pharma, Benefitfocus (BNFT), DST Systems (DST), SAP (SAP), Oracle (ORCL), Verisk (VRSK), Varonis Systems (VRNS), Tableau Software (DATA).

Other Notes

  • Inovalon (NASDAQ:INOV) is a cloud-based big data software company undergoing rapid growth.
  • Their software is geared toward the healthcare industry, and other recent IPOs in this sector include VEEV, HQY, BNFT, VRNS, and DATA, all of which have performed well in the public markets since their debuts in 2013 and 2014.
  • Inovalon’s software is used by 744,000 physicians, 244,000 clinical facilities, 118 million unique patients.
  • Inovalon’s software is cloud-based big data analytics software; both “cloud-based” and “big data” have been hot buttons for institutional and individual investors alike.
  • Overview of Inovalon’s software: Inovalon’s analytics software identifies gaps in care, quality, data integrity, and financial performance, while their data-driven intervention platforms provide clients with differentiated capabilities to resolve these gaps.
  • Inovalon was founded in Maryland in 1998 (similar to Benefitfocus, which was founded in South Carolina in 2000)
  • Veeva Systems (VEEV) and Trinity Pharma (private) are the two companies most similar to Inovalon (INOV), and Veeva has done incredibly well in the public market.
    • On Veeva’s first day of trading, the stock was up 86% and had a market cap of over $5 billion.
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