Summary: Upcoming Quiet Period Event

The IPO quiet period for Alteryx expires on 4.18.2017. At this point, given that its team of underwriters will have a first shot at releasing (likely positive) reports and recommendations, we believe AYX stock price could see at least a temporary increase.

We suggest investors consider buying AYX prior to the event. (See the end of this article for a more detailed discussion of the timing considerations for an investment.)

Our SHORT-TERM PRICE TARGET: $17.75

Company Background

(www.alteryx.com/)

Alteryx, Inc. (Pending:AYX) offers a subscription-based platform for self-service data analytics. Headquartered in Irvine, California, its customers include both small and large companies across diverse industries. Alteryx reports that, as of Dec. 31, 2016, it had more than 2,300 customers in 50 countries, including Ford Motor Co., Tableau Software, Nike, Kaiser Foundation Health Plan, Inc. and Southwest Airlines, Inc., among others.

We have previously written on AYX here, as well as a preview of the IPO quiet period expiration on our IPO Insights platform.

Executive Management Highlights

Alteryx co-founder Dean A. Stoecker has also served as the company's chairman of the board and chief executive officer since the company was founded in 1997. Previously, Stoecker held multiple positions at Donnelly Marketing Information Services, served as the vice president of sales at Strategic Mapping, Inc. and was the director of enterprise solutions at Integration Technologies, Inc. He earned his Master of Business Administration degree from Pepperdine University and his Bachelor of Science in International Business Degree from the University of Colorado.

Since April 2016, Kevin Rubin has served as Alteryx's chief financial officer. From July 2011 to April 2016, Rubin was the CFO of MSC Software Corporation and previously served as the CFO of MRV Communications, Inc., DataDirect Networks, Inc. and Pictage, Inc. Rubin earned his Bachelor of Arts in Business Economics degree from the University of California at Santa Barbara.

IPO & Early Market Performance

On its first day of trading, Alteryx closed up 11 percent, raising $126 million through its offering of 9 million shares at $14 per share--the high end of its estimated price range of between $12 and $14. The underwriters for the IPO include Cowen and Company (Nasdaq:COWN), Raymond James (NYSE:RJF), JMP Securities, William Blair, Pacific Crest Securities, JPMorgan (NYSE:JPM) and Goldman, Sachs & Company (NYSE:GS). AYX is now priced >19% above its opening price at $16.63. (market close 4.6.2017).

(Click on image to enlarge)

(Edgar Pro)

Financial Highlights

For the year that ended on Dec. 31, 2016, Alteryx reported net losses of $24,258,000, gross profits of $69,764,000 and total revenues of $85,790,000. By comparison, for the year that ended on Dec. 31, 2015, Alteryx reported net losses of $21,272,000, gross profits of $43,300,000 and total revenues of $53,821,000.

Alteryx acknowledges that the company changed its business model in 2010, resulting in a limited operating history that could be considered a risk factor. In addition, the company has an accumulated deficit of $86 million, which it attributes to its initiatives to expand, as well as a history of losses.

The company faces stiff competition from a number of companies, including Microsoft, International Business Machines Corporation and Oracle Corporation, among many others. According to Alteryx, the competitive environment is intense and increasing.

Conclusion: Buying Opportunity

Due to the somewhat surprising pop in its IPO, we recommend that investors take another look at AYX at this point. Alteryx operates in an exciting industry, and has shown solid revenue growth. Its IPO was led by heavy-hitter Goldman Sachs. Six other underwriters, including J.P. Morgan, could be ready to release detailed positive initial Buy recommendations on this successful public company.

Our firm has studied the event in detail and found positive returns surrounding the quiet period expiration.