Microsoft (NASDAQ: MSFT) introduced Microsoft Teams last year. However, that comes in almost 20 times higher than the S&P 500 average of 2.2. That does not match the levels of BYND stock or many of the cannabis equities. For one, the spike higher from the first day of trading took the price to about 43 times sales. Although the first-day performance likely surpassed his predictions, he may have a point as the stock carries a great deal of risk. However, our own Will Ashworth seemed underwhelmed with both the direct listing strategy and Slack stock itself. As such, investors could profit handsomely from a speculative bet on WORK stock. It could follow in the footsteps of Beyond Meat (NASDAQ: BYND), a recent IPO that rose more than eightfold from its IPO price at its peak. Given the initial move higher, I see some potential for short-term stock gains. With the massive rise in WORK stock on the first day, the direct selling strategy did not hurt them. Slack Holds Potential for High-Risk Gains Spotify (NYSE: SPOT) also listed their shares this way and enjoyed some initial success.ġ0 Monthly Dividend Stocks to Buy to Pay the Bills Slack offered its stock to the public in a direct listing, selling shares directly to investors rather than using a pricier investment bank. The company also took a unique route to get Slack stock listed. InvestorPlace - Stock Market News, Stock Advice & Trading Tips By the end of Thursday trading, the market cap rose to $19.47 billion. Investors quickly bid prices higher on the San Francisco-based corporate messaging company, which set its IPO price at $26 per share. Slack stock shot upward by more than 48.5% in Thursday trading. Given the obstacles faced by Slack stock, investors should look at WORK stock as a speculative bet rather than as an investment. Still, despite this massive upward spike, the company must cope with financial losses and much larger competitors that could derail the IPO’s initial success. “Slack’s billings and sales growth outlook will likely remain pressured in the near term,” in part because of higher competition.IPO Success Makes Slack Stock A Gamble, Not An Investment The outlook “might be a tad conservative,” given the stock had a “thin margin of error” due to its valuation. Market-perform rating, price target lowered to US$29 from US$31. The third-quarter outlook “shows anemic growth” that was “not as robust as expectations.” While Slack will “continue to be a leader,” there is more competition coming into the space. Notes the stock decline “creates a more attractive risk/reward” profile. “Slack missed the market’s expectations for a greater acceleration in billings growth,” but the company’s “fundamental value proposition and large market opportunity” remain unchanged.Īffirms equal-weight rating and $38 price target. “While we view Slack’s collaboration platform as best-in-class, at current levels, we believe this is factored into the valuation.”Īffirms neutral rating and US$34 price target. Notes that both revenue and billings came in ahead of forecasts. The “otherwise strong print” was “clouded” by a one-time charge related to service disruptions in the quarter. Remains overweight on the stock but trims price target by US$1 to US$44. “Since there is no guidance track record, only time will tell, which might create short-term issues for the shares.” It is currently unclear whether this is because Slack’s management is being conservative, or whether it is facing more competition from Microsoft teams. While results were “healthy when considering the scale of the business,” the outlook suggested a deceleration in growth in the second half of the year. Slack and investors “are still only getting used to each other, which is causing some growing pains.” Here’s what analysts are saying about the results: Until investors determine whether Slack was being conservative with its projections or facing heavier competition, shares could face volatility, it added. While the implied pre-market move suggests Slack will hold modestly above that level, the drop extends a lengthy downtrend.īarclays described the stock sell-off as “growing pains,” noting that the company’s newness meant it had no track record with how to evaluate its outlook. The company went public in June with an IPO price of US$26. Analysts wrote that this “anemic” outlook wasn’t as “robust” as had been expected, in the words of Bernstein analyst Mark Moerdler. While the second-quarter results beat expectations, the company projected slower sales growth for the second half of the year. (WORK:UN) shares tumbled in pre-market trading on Thursday, after the workplace-collaboration software company disappointed with its first report as a public company.
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