Today, investors seem to be getting excited about the upcoming Alkami Technology IPO. Indeed, it appears demand for Alkami Technology, which will be listed as ALKT stock on the Nasdaq Exchange, is higher than expected.
Alkami provides a unique business model. Financial institutions are able to use Alkami’s cloud-based platform to provide a seamless end-user experience across a number user interfaces (mobile, text, laptop, voice controls). Alkami is banking on the cloud revolution taking hold in the banking sector. That’s a proposition investors seem to like today.
However, reports do note that Alkami is not yet profitable. The company reportedly lost $56.6 million on revenues of $112.1 million last year. The company did report 53% year-over-year revenue growth, though its loss did widen from 2019.
Thus, it appears this is still a growth company with a long way to go to become profitable. That said, investors appear to be demanding these shares, as per the company’s recently revised S-1 filing.
Alkami Technology IPO Has a New Range
Accordingly, Alkami disclosed yesterday that it was raising its target price range. The new range the company will be targeting will be between $26 and $28 per share. The previous range was $22-$25 per share. Six million shares are expected to be issued as a result of the IPO.
Accordingly, it’s expected Alkami could now raise up to $168 million as a result of its IPO. The market capitalization of Alkami post-IPO is now expected to be somewhere around $2 billion. However, investors will have to wait and see how the IPO is ultimately priced to determine what its market cap will be tomorrow, and how much money Alkami will ultimately raise.
Right now, pre-IPO investors are making a bit of a gamble with this stock. On the one hand, it’s a company with a ton of growth potential. On the other, it’s an unprofitable story stock at the moment. With growth stocks seeing some downside pressure of late, it will be interesting to see how ALKT stock performs post-IPO, given the increased range.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.