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Workday notches fifth largest first day gain YTD; on-demand enterprise IPOs continue to command investors' interest

By Renaissance Capital,  October 15, 2012, 11:06:41 AM EDT

Workday's ( WDAY ) strong debut on Friday marked the 16th on-demand enterprise software IPO this year. The group has performed exceptionally well, posting an average first day gain of 34% (vs. 14% average for all IPOs YTD) and an average total return of 47% (vs. 20%), a reflection of investors' ongoing interest in growth and high revenue visibility.

E2open ( EOPN ), the only on-demand enterprise software IPO that has traded down on its first day, saw redemption this week after reporting slightly better-than-expected results on Monday after the close. Since its earnings announcement, E2open has jumped 29%, bringing it back above its offer price and at a post-IPO high.

Workday lived up to its hype on Friday and closed its first day of trading up 75%, solidifying its spot as the fifth largest first day gain this year, behind big data software provider Splunk (SPLK; +109% first day pop), mobile ad platform Millennial Media (MM; +92%), organic food maker Annie's (BNNY; +89%) and quick-turn protoype manufacturer Proto Labs (PRLB; +81%).

Workday now commands the highest valuation of this year's on-demand IPOs with a fully diluted market value of $9.4 billion (44x trailing 12 month sales).  IT automation software provider ServiceNow ( NOW ) follows with a market value of $5.4 billion (29x trailnig sales).  Guidewire ( GWRE ), ExactTarget, ( ET )Demandware (DWRE) and Bazaarvoice (BV) each have market values in excess of $1 billion.

Largest 2012 On-demand Enterprise Software IPOs by Market Value


Company (Ticker) IPO Date Market Value EV/LTM Sales First Day Pop Return from IPO
Workday ( WDAY ) 10/11/12 $9.4 billion 44x 75% 75%
ServiceNow ( NOW ) 6/28/12 $5.4 billion 29x 37% 85%
Guidewire ( GWRE ) 1/24/12 $1.8 billion 7x 32% 132%
ExactTarget ( ET ) 3/21/12 $1.7 billion 6x 32% 21%
Demandware (DWRE) 3/14/12 $1.2 billion 16x 47% 109%
Bazaarvoice (BV) 2/23/12 $1.0 billion 8x 38% 25%




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: News Headlines, IPOs

Referenced Stocks: EOPN, ET, GWRE, NOW, WDAY



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