This morning, Qualtrics, a software company that tracks customer and employee sentiment, filed a new S-1 document. The new filing raises Qualtrics’ expected IPO price range, providing the Utah-based unicorn with a higher potential valuation in its impending debut.
Qualtrics previously sold to SAP for $8 billion while on the path to going public; after a time inside the larger software company, Qualtrics announced it would spin out as its own public company. TechCrunch previously explored the company’s initial IPO filing and its first IPO pricing interval.
At the time, we described it as just that: Qualtrics’ first IPO price range. We expected the company to raise its targets. Why? At its initial $22 to $26 per-share price range, it simply felt undervalued compared to current-market analogs and benchmarks.
Let’s talk about its new price range.
Pricing
Qualtrics is a SaaS company that is growing at a moderate clip and is nearly break-even if you remove the cost of share-based compensation. And at a run rate of around $800 million in its most recent quarter, it’s a large firm.
So it’s not just another fast-growing SaaS firm that’s crested $100 million in ARR that is still running stiff deficits, it’s a different beast. That makes the effort to triangulate its valuation all the more fun.
At its new interval and with some minor share-count tweaks detailed in its new filing, Qualtrics will raise as much as $1.68 billion in its debut, a figure that is exclusive of some transactions associated with the IPO.
With its new $27 to $29 per-share IPO price range, Qualtrics is shooting a little bit higher than before. But before we get too sure that the company is being conservative, let’s get some new valuation numbers:
- Shares outstanding post-IPO: 510,170,610, inclusive of the underwriters’ option.
- Price range: $27 to $29 per share.
- Valuation range: $13.8 billion to $14.8 billion.
How expensive are those figures? As we noted previously, Qualtrics’ Q4 revenue estimate midpoint is $852 million, up just over 23% from the year-ago period. This gives us:
- New Qualtrics low-end IPO run rate multiple: 16.2x.
- New Qualtrics high-end IPO run rate multiple: 17.4x.
Those do not seem to be particularly high multiples for Qualtrics, given recent market norms. However, trying to decipher the public market lately has been similar to reading the Rosetta Stone, but written in Wingdings. While on acid. So, you never know what is going to happen when a company starts to trade.
For what it’s worth, I would not fall over in shock if Qualtrics priced a dollar or two above this raised range. We’ve seen that before in other, recent debuts. This could be a repeat.
A question to leave you with: When meme stocks are the hot thing and everyone wants to talk about WallStreetBets, how hot is Qualtrics? It nearly makes money for god’s sake. What good is that? Surely Ryan Smith can pivot the company into something more lucrative, like vaporware surrounding an electric vehicle or space tourism. Get with the times!
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