ON24 stock jumps 54% after IPO

ON24 said early Wednesday that its initial public offering priced at $50 a share, with the pricing coming in at the high end of its expected range of $45 to $50 a share. The company raised at least $315 million through the offering.

ON24 runs a streaming platform for webinars and live events that companies can use as a way to generate more business. There is also a data component through which On24 provides its clients with “buying signals and behavioral insights to efficiently convert prospects into customers,” the company said in its prospectus.

The company is “clearly benefiting from COVID-19 trends,” wrote MKM Partners analyst Rohit Kulkarni. ON24 recorded revenue of $103.7 million for the first nine months of 2020, up from $63.2 million in the comparable period a year prior. That 59% growth compares with revenue growth of just 8% from all of 2018 to all of 2019.

ON24 saw net income of $11.2 million in the first nine months of 2020, versus a loss of $14.1 million in the same period a year earlier.

“While ON24 is a 20-year-old Silicon Valley company, we believe the pandemic has fundamentally (and serendipitously) benefited ON24’s product-market fit given the trends in internet-based B2B [business-to-business] selling with virtual conferences, webinars, and adoption of video conferences,” Kulkarni wrote.

Still, he said the company faces some risks amid potential competition from Zoom Video Communications Inc.
ZM,
-2.37%
and others, as well as uncertainty over what business trends will look like once the pandemic subsides.

ON24’s IPO comes as the Renaissance IPO ETF
IPO,
+0.87%
has risen 38% over the past three months and as the S&P 500
SPX,
+0.35%
has increased 14%.