Compellent's IPO Propellant

Tech IPOs have almost become too easy, as this week's offering of Compellent Technologies (NYSE: CML  ) demonstrates. The company pegged its price range at $10-$12, but shares ultimately fetched $13.50. And from there, the stock surged to $24.19 on its first day of trading.

Compellent develops storage solutions targeted for small-to-medium-sized enterprises (SMEs). To attack this prickly market, the company has focused on affordability, ease of use, and minimal maintenance.

So far, the formula is working nicely. As of the first half of 2007, revenue doubled to $20.9 million and there are more than 600 customers, which include Munder Capital Management, Rivals.com, and even the FBI.

Compellent faces a very competitive marketplace, jockeying for position in storage solutions among such heavy hitters as IBM (NYSE: IBM  ) , EMC (NYSE: EMC  ) , and Network Appliance (Nasdaq: NTAP  ) , and upstarts such as 3PAR, EqualLogic, and Xiotech. To keep growth alive, Compellent continues to invest heavily in R&D and sales/marketing, leading the company to post a net loss of $4.1 million for 2007.

But Compellent does have one compelling aspect to its technology: a simple point-and-click interface. In the age of Amazon.com (Nasdaq: AMZN  ) and Facebook, this may seem like a no-brainer, but it's hardly common in the complex world of storage. That gives Compellent one important differentiation -- for now, at least.

But at what price? Keep in mind that Compellent's stock trades at 12 times trailing-12-month revenues. Other IPOs of storage companies, such as CommVault Systems (Nasdaq: CVLT  ) and Double-Take Software (Nasdaq: DBTK  ) , trade at multiples of five to six times revenue. So while Compellent has a good story, it comes at a hefty premium.

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