It took 16 years for Coupons.com (COUP) to get to an IPO, but it was well worth the wait. Today, the Coupons.com IPO went off without a hitch, then COUP stock surged more than 90%.
Chalk it up as another sign of the boom in the IPO market, especially for tech deals.
Coupons.com operates a digital promotion platform that connects brands and retailers with consumers. Some of its customers include stores such as Kroger (KR) and Walgreen (WAG), as well as big brands Johnson & Johnson (JNJ), Kellogg (K) and General Mills (GIS).
The core of Coupons.com is a sophisticated publishing system that makes it easy to create promotional campaigns across the web, mobile and social channels. It also features integration with retailer point-of-sale systems, as well as extensive analytics.
Last year, the Coupons.com platform processed 1.3 billion transactions, up 43%. This has translated into strong revenue growth, which certainly proved to be a big attraction for the Coupons.com IPO. In 2013, revenues jumped by 50% to $167.9 million, and the company hit profitability in Q4.
There appears to be much more room for growth, which should propel COUP stock. According to NCH Marketing Services, the the distribution of all coupons came to 315 billion last year, and it seems inevitable that more will relentlessly migrate to digital channels.
Sure, Coupons.com faces a load of competitors, including Redplum.com, SmartSource, RetailMeNot (SALE), TechBargains.com, Savings.com and Ebates Performance Marketing. Even Groupon (GRPN) recently entered the market, and just about any tech stock always has to keep an eye over the shoulder for either Amazon.com (AMZN) or Google (GOOG) ever deciding to make a play for digital coupons. But right now, the market is large enough for multiple players.
Not to mention, Coupons.com already has a strong network that includes a presence in about 58,000 store locations in North America.
However, this does not mean investors have any business jumping on the Coupons.com IPO right now. Many IPOs have a couple crazy days of trading to start off, and COUP stock is no different.
Patience is key. Coupons.com is a solid business, but investors are strongly urged to wait for better prices to come.
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.