Kaltura is set to begin trading on Jul. 21 under the ticker "KLTR". What’s the forecast for Kaltura stock? Should you buy the IPO, or give it a miss?
Kaltura provides on-demand video solutions to thousands of companies and educational institutions around the world.
Kaltura delayed its IPO
Kaltura was planning an IPO earlier this year but shelved it due to apparent weak demand. “Stay-at-home” stocks were stagnating and many companies that had listed over the last year plunged.
The U.S. IPO market is looking strong again this week, with as many as 19 companies expected to price their IPO. Last week was also good for IPOs, with 18 companies going public through the traditional route.
This year's second quarter was the busiest for IPOs since 2000, and Jun. 2021 was the best month since Aug. 2000. Despite the improved market sentiment, however, Kaltura has lowered its IPO price.
Another notable change is that the offering is now just for new shares. Previously, company insiders, including co-founder and CEO Ron Yekutiel, were looking to sell shares. Many investors see founders selling shares in an IPO as a negative sign, signaling that insiders are cashing out.
Kaltura's IPO date and price
Kaltura is set to start trading on Jul. 21 and has priced its IPO at $10, at the midpoint of its initial price range of $9–$11. While the IPO market is looking strong in terms of the number of new issues, new listings' performance hasn’t been great. Even excluding some Chinese companies, this year's IPO market has significantly underperformed 2020's. According to Bloomberg, on average, companies that went for an IPO last week closed the week 1.3 percent below their issue price.
Kaltura's stock forecast
Kaltura has sold 15 million shares and raised $150 million from its IPO. Based on its number of outstanding shares, its proforma market value is around $1.24 billion. The company reported revenue of $120.4 million in 2020, the result of 24 percent YoY(year-over-year) growth.
The company’s revenue has grown consistently over the last five quarters. In Q1 2021, its revenue increased 46% YoY, reflecting increased adoption of technology over the last year.
While Kaltura is seeing net losses, its adjusted EBITDA have been positive in the last two years. The company values its total addressable market at $55 billion, and its IPO values the company at a reasonable 2020 price-to-sales multiple of about 10x. Considering these figures, Kaltura could be a good play on the on-demand online video industry.