Pre-IPO Coverage: Upwork (UPWK)

Critical Details Found in Financial Filings by Our Robo-Analyst Technology

As investors focus more on fundamental research, research automation technology is needed to analyze all the critical financial details in financial filings. Below are specifics on the adjustments[2] we make based on Robo-Analyst[3] findings in Upwork’s S-1:

Income Statement: we made $2 million of adjustments, with a net effect of removing $2 million in non-operating expense (1% of revenue). You can see all the adjustments made to UPWK’s income statement here.

Balance Sheet: we made $31 million of adjustments to calculate invested capital with a net increase of $8 million. The most notable adjustment was $6 million in off-balance sheet debt. This adjustment represented 4% of reported net assets. You can see all the adjustments made to UPWK’s balance sheet here.

Valuation: we made $199 million of adjustments with a net effect of decreasing shareholder value by $175 million. The largest adjustment to shareholder value was $147 million in outstanding employee stock options. This option adjustment represents 11% of UPWK’s proposed market cap.


[1] IC Turns, NOPAT Margin, and ROIC are estimated numbers due to incomplete data that does not allow us to build a full TTM model.

[2] Ernst & Young’s recent white paper “Getting ROIC Right” demonstrates the link between an accurate calculation of ROIC and shareholder value.

[3] Harvard Business School Features the powerful impact of research automation in the case study New Constructs: Disrupting Fundamental Analysis with Robo-Analysts.

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Disclosure: David Trainer, Kyle Guske II, and Sam McBride receive no compensation to write about any specific stock, style, or theme.

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Dallas Carr 2 years ago Member's comment

With the strong financial system and the flying stock market, some researchers predict that 2019 will be a good year for IPOs. There will be many big companies going public and investors will get the opportunity to invest in their stock. Upwork is one among them that got funding rounds and must have capability to repay their investors.