Care.com (CRCM) founder Sheila Lirio Marcelo is part of the “sandwich generation,” which means she cares for both her children and parents. Because of this, she had a tough time finding quality care solutions.
So she did something about it: Back in 2006, Marcelo founded Care.com, which is an online community of caregivers. The main services include child care, senior care, special needs care and even pet care. There are also service offerings for tutoring and housekeeping.
As a sign of its success, Care.com pulled off an IPO in late January and the stock was up about 42% on its first day of trading. But things have cooled off since then. CRCM stock is now only up about 20% since its offering.
The reason? The company posted a weaker-than-expected fourth-quarter report. Although, the growth was still impressive. In the quarter, revenues shot up 41% to $22.5 million. Besides, other social stocks like LinkedIn and Facebook also had shaky reports for their first few quarters as public companies. It can take some time for Wall Street to make adjustments.
Going forward, there is lots of room on the upside, which should fuel CRCM stock. The addressable market is massive, considering that roughly 42 million households in the U.S. have enough income to afford caregiver services. There are also several strong trends that should help boost demand: the growth in dual-income and single-parent households, the aging population and the preference for home care.
Don’t miss out on these social stocks. Even if they’re not dominating the headlines, they’re still worth your attention.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.