Category: Stock Research
Momentive Global (NASDAQ: MNTV)
Momentive Global (NASDAQ: MNTV), formerly SurveyMonkey, is a leading provider of cloud-based survey software products that enable companies to better engage with customers and employees. Founded as SurveyMonkey in 1999, and based in San Mateo, California, the company is best known for its flagship SurveyMonkey customer feed-back software. An out-of-favor stock, Momentive Global has had a storied history since its IPO five years ago.
The company, then known as SurveyMonkey, priced its 15 million share IPO at $12 per share on the NASDAQ on September 25th 2018. The underwriters subsequently exercised their option to purchase an additional 2.25 million shares. The IPO was led by J.P. Morgan Securities, Allen & Company and BofA Merrill Lynch. Credit Suisse, UBS, Wells Fargo, SunTrust Robinson Humphrey, Code Advisors, Foros, JMP Securities and LionTree Advisors.
Momentive Global is best known for its namesake SurveyMonkey cloud-based questionnaire software that is primarily used for customer feed-back, TechValidate, a marketing content automation software solution, and SurveyMonkey Engage, which is focused on internal employee surveys and feed-back.
In June of 2021, the company changed its name to Momentive Global, reflecting its wider range of customer and employee experience management offerings, which include the addition of market research services. In October of 2021, the company announced that it would be acquired by Zendesk in an all-stock transaction for roughly $4.1 billion. With the intent to expand from customer service to a broader market of global customer intelligence, Zendesk, at the time, appeared to be particularly interested in the SurveyMonkey portion of the business. However, the deal was ultimately rejected by Zendesk shareholders, and Zendesk was forced to terminate the transaction. Zendesk was ultimately taken private in June of last year in a $10 billion acquisition by an investor group led by Permira and Hellman and Friedman.
Today, more than 345,000 organizations around the world use one or more of MNTV’s products, and the company notes that it has over 17 million active users that draw on market insights, brand insights, as well as employee, customer, and product experiences. Over 95 percent of the Fortune 500 use a Momentive product.
In a measure to return cash to shareholders, the company initiated a share repurchase plan in February of 2022 with the intent to repurchase up to $200 million of its common stock. Through the first three quarters of last year, Momentive had repurchased $84 million. At the end of Q3, MNTV held $193 million in cash along with $183 million in debt, for a net cash position of $183 million. The company’s DSOs are 23 days, a reasonable level, attesting to the short-term nature of most of its customer contracts, which are said to be of a duration of one year or less. The company announced an 11 percent workforce reduction, coinciding with its Q3 2022 earnings results. Last month, the company appointed a new CFO, Rich Sullivan, whose experience includes stints at Dreamworks, Twitter, and AT&T.
Nutanix (NASDAQ: NTNX): Battle Road IPO Review Hardware Sector Coverage
Nutanix (NASDAQ: NTNX), a provider of cloud-infrastructure appliances, becomes a recent addition to our Battle Road IPO Review Hardware sector coverage. Founded in 2009, and based in San Jose California, Nutanix has helped to develop a new class of appliances designed to optimize resources in the data center. Consensus estimates call for revenue of $740 million in the current fiscal year ending July 31, along with a loss of $1.39. Next year, it is expected that the company will reach $1 billion in revenue, along with a loss per share of $0.86.
Nutanix priced its 14.9 million Class A share IPO on September 30th at an opening price of $16, with all proceeds going to the company, thus raising about $230 million, after deducting underwriting and other IPO costs. Along with 120 million Class B shares, which have 10 times the voting power of Class A shares, the company’s total shares outstanding are 135 million. The transaction was led by Goldman, Sachs & Co., Morgan Stanley, J.P. Morgan Securities, RBC Capital Markets, along with eight additional investment banks. At a recent share price of $28, Nutanix’s market cap is about $3.8 billion.
Founded by Mohit Aron, Ajeet Singh, and Dheeraj Pandey, who is currently, chairman and CEO, Nutanix has helped to define a new class of appliances around the notion of a “hyper-converged” architecture. Previously, appliances were largely dedicated to optimizing the separate tasks of computational intensity, storage, virtualization, or networking. With Nutanix’s approach, a single box combines the elements of all four tasks. In only the last several years, Nutanix has grown to serve over 3,700 customers, including 300 Global 2000 Enterprise companies.
As a fast-growing venture-backed company, Nutanix has generated a lot of buzz in IT circles, particularly given Nutanix’s claim that it can help companies achieve the same type of benefits that Google, Facebook, and Microsoft have achieved in their own data centers, without the extensive investment in proprietary hardware and software.
Nutanix has become a nuisance to several industry leaders, including VMware, Cisco Systems, and HP, each of whom have something to lose should Nutanix continue to gain credibility with heads of IT. Each of the above-mentioned companies has, in the last year, launched so-called hyper-converged appliances of their own, and in some cases, severed all ties to Nutanix, by no longer allowing it to participate in their coveted partner programs.
Post-IPO, Nutanix has an excellent balance sheet, with $347 million in net cash. However, the company ranks near the bottom of our Hardware sector coverage, based on the expectation for operating losses this year and next.