ChannelAdvisor Corp (ECOM) Shares Soar In IPO Debut

By Mani
Updated on

SaaS solutions provider ChannelAdvisor Corp (NYSE:ECOM) made impressive debut as its IPO opened for trading today posting over 35 percent gain.

ChannelAdvisor Corp (NYSE:ECOM)’s shares soared over 35 percent to $18.92 after pricing 5,750,000 shares at $14.00, above the expected $12-$14 range.

ChannelAdvisor Corp (ECOM) Shares Soar In IPO Debut

This impressive performance comes on the back of today’s bear move in the markets.

ChannelAdvisor Corp (NYSE:ECOM) is a leading provider of software-as-a-service, or SaaS, solutions that enable retailer and manufacturer customers to integrate, manage and optimize their merchandise sales across hundreds of online channels.

The lead book-running manager for ChannelAdvisor Corp (NYSE:ECOM)’s IPO is Goldman, Sachs & Co, while Stifel is acting as a book-running manager. The co-managers role is split across Pacific Crest Securities LLC, BMO Capital Markets Corp., Needham & Company, LLC, and Raymond James & Associates, Inc.

The leading software solutions company has above 2,000 customers. It sports a long list of popular clients such as Lowe’s, Ann Taylor, AT&T, and Bed Bath & Beyond.

ChannelAdvisor is specialized in offering hosting services that permit companies sell items over different online sites. Through automation, analytics and optimization, ChannelAdvisor customers can leverage a single inventory feed to more efficiently list and advertise products online, and connect with shoppers to increase sales.

Between 2010 and 2012, ChannelAdvisor Corp (NYSE:ECOM)’s total revenue increased at a compound annual growth rate of 20.9 percent, an increase from $36.7 million to $53.6 million.

The Morrisville, North Carolina-based company’s total revenue for the three months ended March 31, 2013 and grew by 22.1 percent at $14.9 million up from $12.2 million reported during the same period in 2012.

The SaaS provider also reported healthy gross margin. Its gross margin, based on total revenue, increased from 66.8 percent in 2010 to 72.5 percent in 2012, and from 73.3 percent in the first quarter of 2012 to 73.5 percent in the first quarter of 2013.

Some analysts predict ChannelAdvisor Corp (NYSE:ECOM) to maintain its strong momentum since in the U.S. the penetration of e-commerce is only 10 percent of the total retail market, while Asian countries have more than double the penetration rate.

Besides the other growth levers available to ChannelAdvisor Corp (NYSE:ECOM) includes mobile, social platforms such as Twitter, Facebook and Pinterest.

The cloud-based e-commerce solutions provider has a unique business model whereby the software solutions company would charge a base subscription and subsequently takes a share of the revenues.

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