Everbridge is a Buy Ahead of Quiet Period Expiration

For Everbridge (Pending: EVBG), the 25-day quiet period began on its IPO date, September 16, 2016 and will come to an end on October 10. 

The firm's IPO underwriters will therefore be allowed to publish reports and recommendations of the company on October 11. From this activity, Everbridge's share price will likely see an increase. 

Impressive Early Market Performance 

Everbridge was priced at $12, at the mid-point of its expected price range of $11 to $13. The stock opened at $15.25 on its first day of trading. It reached a high of $17.55 on September 21. Currently, the stock trades at $16.74 (market close 10/3)-well positioned for an additional boost at the IPO quiet period expiration. 

Business Overview: Software Company Providing Communication and Safety Applications 

Everbridge is a software company that offers communication and safety applications, designed to perform during critical events. Its SaaS-based platform enables its clients to deliver messages to large groups of people during times, such as terrorist attacks or severe weather conditions. These are able to be sent in near-real time to over 100 different types of communication devices, across more than 200 countries and in 15 languages simultaneously. In 2015, Everbridge handled 1.1 billion communications. 

The company's applications include Mass Notification, Incident Management, IT Alerting, Safety Connection, Community Engagement, Secure Messaging, and Internet of Things. It serves clients in healthcare, energy, technology, financial services, higher education, media and entertainment, retail and professional services industries in the United States, China and the United Kingdom. 

In its SEC filings, the company noted the increasing need for preparedness and public safety from a wide variety of critical incidents including active public shooters, IT outages, cyber attacks, and other events. This increase has driven the marketplace to provide secure, scalable and reliable notification systems, especially systems that can communicate over mobile devices. Everbridge also notes that the market for critical communications solutions is expected to grow from $15.6 billion in 2015 to $31.9 billion in 2020. 

The company was formerly known as 3n Global, Inc. and changed its name to Everbridge, Inc. in April 2009. Everbridge, Inc. was founded in 2002 and is based in Burlington, Massachusetts. 

Management Team Highlights 

CEO, President and Chairman Jamie Ellertson has served as president and CEO since September 2011 and Chairman since March 2011. He has held senior executive positions at CloudFloor, S1 Corp., Interleaf, Tartan Inc., Openware Technologies, and Purview Technologies. 

Chief Technology Officer Imad Mouline joined the company in 2011. His previous experience includes positions at CloudFloor, Compuware, Gomez, and S1 Corp. Mr. Mouline graduated from the Massachusetts Institute of Technology, and he holds four patents. 

Competitors: BlackBerry Limited, Emergency Communications Network, PagerDuty and Others 

Everbridge faces competition from a variety of sources. In mass notification and incident management competitors include xMatters, SunGard Data Systems, SWN Communications, Nuance Communications, Enera, F24 AG, Emergency Communications Network, and BlackBerry Limited. In It alerting and secure messaging, the competition comes from TigerText, Perfect Serve, Spok, DocHalo, xMatters, and PagerDuty. 

Everbridge's P/S ratio of 5.1 is in line with that of industry peers (5.2) (Source: Morningstar) and well below that of firms among the group closer in size (market cap) - Splunk (NASDAQ: SPLK) (size: 7.7B; P/S 9.7) and Ansys (NASDAQ: ANSS) (size: 7.9B; P/S 8.6). 

About the IPO Quiet Period 

The IPO quiet period is a period of time after a company's IPO in which underwriters are not allowed to release research reports on the company. This is based on SEC guidelines. Current research has found a significant potential for above-market returns in the five days prior to and two days after the conclusion of a company's quiet period. 

Conclusion: Buy Recommendation 

Everbridge's IPO underwriters could positively influence the stock's recent growth through the release of detailed positive reports highlighting its strong performance. As noted above, our research has found above-market returns; particularly for firms with powerful global underwriters. 

Everbridge's team includes world class BofA Merrill Lynch, Credit Suisse Securities, Cannacord Genuity, Pacific Crest Securities, Raymond James & Associates, Stifel Nicolaus & Co., and William Blair & Co. These firms positive detailed research reports have a wide reach around the globe. 

Given Everbridge's initial success as a public company, its burgeoning industry, and attractive valuation, we expect more good news from the firm's underwriters after 10/10; this catalyst presents a strong opportunity to buy the firm's stock before the event.