SurveyMonkey Makes Impressive Debut

Investment Analysis Clubs Saul’s Investing Discussions
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SurveyMonkey recently ipo’d.

What does SurveyMonkey do?

SurveyMonkey is an online survey[8] development cloud-based software as a service company, founded in 1999 by Ryan Finley. SurveyMonkey provides free, customizable surveys, as well as a suite of paid back-end programs that include data analysis, sample selection, bias elimination, and data representation tools.[9] In addition to providing free and paid plans for individual users, SurveyMonkey offers more large-scale enterprise options for companies interested in data analysis, brand management, and consumer-focused marketing.[10]

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https://en.wikipedia.org/wiki/SurveyMonkey

Hannah Genig, Benzinga Staff Writer:

SurveyMonkey’s parent company SVMK Inc. made a big splash in its market debut Wednesday.

The company originally sought a $9 to $11 share price, but decided on $12, due to high investor demand. According to CNBC, Salesforce Ventures will purchase $40 million of stock, in addition to investments from Tiger Management and others.

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https://www.benzinga.com/news/18/09/12410637/surveymonkey-ma…

Starrob

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Article on the SurveyMonkey IPO by Danny Vena (TMFLifeIsGood):

One of the more highly anticipated initial public offerings (IPO) of the year hit the market yesterday, with the public debut of SurveyMonkey parent SVMK (NASDAQ:SVMK). The software-as-a-service (SaaS) company launched to much fanfare, soaring 44% on its first day of trading on the Nasdaq exchange.

So why is there so much excitement around a survey-software maker that’s been around since the dot-com era? From its humble beginnings, SurveyMonkey has become the world leader in digital surveys and could potentially have much more growth ahead.

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https://www.fool.com/investing/2018/09/27/survey-monkey-ipo-…

Starrob

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For the first six months of 2018, revenue of $121 million jumped 14% compared to the prior-year period

Not impressive. And hard to believe they’re not profitable after 20 years.

Bear

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SVMK may be a cautionary tale for ESTC. I have been looking at recent IPO’s and have found that the 1st day may not be the best day to enter a full position. Almost always there are dips after the day of the initial IPO. Of course ESTC may indeed runaway from day one, but for me I intend to take small bites on the 1st day and thereafter. If she is going to run I would think the 1st earnings report would be the catalyst for a boost to the stock. I am interested to know when their 1st earnings report will be.

Rob

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Not impressive. And hard to believe they’re not profitable after 20 years.

Bear

I have not looked much at the company yet, so I don’t know the history of SurveyMonkey, nor do I know when they decided to use the SaaS model. Only within the last few months, I saw a interview that Tom Gardner and a few TMF analyst did with some SaaS company that made it as a Fool recommendation on one of their newsletters. I forget the CEO who was being interviewed but the CEO said something that caught my eye which was something to the effect that most SaaS companies take a extraordinarily long time to both build themselves up and make themselves profitable (Which would be why when I see any SaaS company that has achieved profitability or positive cash flows in a relatively short period of time, I almost immediately become interested in investigating further).

Apparently, the SaaS business model with most services often takes lots of scale to get to profitability but once a SaaS reaches a critical point and passes over, it can be like the floodgates open but the trick would be getting to that critical point.

With only a modicum of light reading on SurveyMonkey, even though the company was founded in 1999, the company in it’s current form really started in 2009 when a private equity consortium bought it and installed Sheryl Sandberg’s husband as CEO but he unfortunately died in 2015.

I view SurveyMonkey as actually more of a 10 year old company, rather than a 20 year old company.

I actually do not know how well SurveyMonkey will eventually do because I don’t know much about it and I think simply citing one revenue number and pointing out that they are currently not profitable would not be any type of deep analysis that would convince me about SurveyMonkey one way or the other.

I simply posted the article to put the company on everyone’s radar. Maybe one day, someone will take the time to do a deeper analysis of the company, as it’s public story unfolds. Here’s a interview of the CEO on SurveyMonkey’s IPO:

SurveyMonkey CEO Zander Lurie, a CNBC Disruptor 50 company, joins ‘Squawk Box’ to discuss his company ahead of the stock going public on the Nasdaq today. He talks IPO, Dave Goldberg’s passing and tech regulation.

Video: https://www.cnbc.com/video/2018/09/26/surveymonkey-ceo-on-go…

Starrob

1 Like