As some may recall, UPWK got off to a strong start as its up-sized 12.48 mln share IPO (original expectations of 12.3 mln) priced at $15, above the $12-$14 expected range. On October 3, it opened for trading at $23, good for an impressive 53% opening pop, making it one of the most successful IPOs in recent weeks.
The hot start did not last long, though, as the stock began to unravel almost immediately after its debut. The dive in the stock coincides perfectly with the sell-off in the broader markets, and there has not been any relevant news out on UPWK since its IPO. So, the weakness in the stock is entirely related to profit-taking after the sharp initial gains, and the sell-off in the stock market.
The good news is, UPWK will have a chance to catch investors' attention again next week when it reports 3Q18 earnings on November 7. If the company issues a strong report, UPWK could be right back on traders' radars and the stock could quickly move back towards its IPO opening price.
As far as today is concerned, the quiet period expiration came as a bit of a disappointment as analysts' sentiment was rather mixed.
Quiet Period Expiration Review
First, before touching on this morning's initiations, we wanted to point out that last Wednesday, UPWK was initiated with a Buy and $25 price target at Guggenheim -- who was not involved with UPWK's IPO. The hope was that initiation would be a precursor to a larger set of bullish IPOs this morning. While there were a couple bullish initiations, there were also two more cautious initiations out this morning, providing a varied outlook from analysts.
On the positive side, RBC Capital Markets assigned UPWK with an Outperform and $24, price target, about 26% higher than current prices. That is the most bullish initiation out so far this morning. Also on the positive side, Citigroup went with a Buy rating and $23 target.
The most bearish note we see is the Hold and $18 target at Stifel, which is actually about 5% below current prices. Jefferies also took a cautious approach with the stock, putting a Hold on it, but its price target of $20 is at least slightly ahead of the current price.
To conclude, the quiet period expiration today did not deliver the hoped-for catalyst for shares of UPWK. The recent weakness in the stock market overall could be playing a role here as analysts are likely feeling quite apprehensive about recent IPOs in general. As many investors understand, IPOs are an inherently riskier asset class, making them especially vulnerable during market sell-offs. But, the stock does appear as if it is at least finding support, and possibly carving out a bottom, ahead of next week's important Q3 earnings report.