IPO Update: Workiva (NYSE: WK)

This Wednesday (03/11/15) Workiva (WK) reports earnings for the first time since going public on December 12, 2014. Workiva had a low-profile public offering, as it went public the day after Lending Club (LC), and the same day as other enterprise software providers New Relic (NEWR) and Hortonworks (HDP). This past week WK has shown strength,  as it climbed from sub-$13 to over $14, which was its IPO price. Due to Workiva’s time of being public, it has been relatively low-key, and the fact that its showing strength into earnings means that good earnings will be just the catalyst to send shares skyrocketing.

Usually, companies reporting earnings or the first time as a public entity beat expectations. I discuss the first earnings reports of 3 companies (Workday, Tableau Software, and Paycom Software) similar to Workiva below:

When Workday (WDAY) reported earnings for the first time, they beat projected sales estimates by 16%, and its shares went up aproximately 10% the following day. WDAY’s earnings also grew 101% YoY at the time of its first earnings report. Tableau Software (DATA) grew its earnings 71% YoY at the time of its first earnings report post-IPO, and its shares subsequently 12%. Paycom (PAYC) also reported good earnings and their shares climbed 15.6%.

Ever since that point, PAYC has been on a tear, going from the $11-12 range to now sitting at $32, all in less than 10 months. I believe that WK can perform similarly to PAYC, as they both had un-publicized IPOs and were relatively flat in the weeks after going public. PAYC’s huge run-up was sparked by their stellar earnings report, and I believe that WK can do the same. I wouldn’t be surprised to see WK hit $20+ in the coming months, considering that it is rapidly growing sales and has a highly innovative product with essentially no competitors in its space.

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