There is a certain breed of companies that has continued to perform extremely well in our rapidly evolving economy (i.e. software-as-a-service businesses that operate on a subscription basis, with high revenue growth and large total addressable markets). We write about one such company (that focuses on “dev ops”) in this report that completed its initial public offering in September, and the share price has been steadily reverting lower after an initial share price pop to more than double the IPO price. In particular we write about an attractive high income-generating options trade that also gives us a chance to pick up shares of this compelling company at an even lower price. We believe this is an attractive trade to place today—and potentially into early next week—as long as the share price doesn’t move too dramatically before then.
Vast Growth Opportunity: Newly Public Shares
Shares of this newly public “DevOps” company debuted in September and swiftly traded approximately 100% above the $44 initial public offering price. However, given the impressive high growth rate, product offerings and expanding opportunity in a very large and nascent industry—the shares are worth a closer look (especially considering the share price has been quietly reverting back towards its initial IPO level in recent weeks). In this report, we analyze company’s business model, market opportunity, competitive position, valuation and risks before finally concluding with our opinion on investing.