3 Hot IPOs That Can Get Even Hotter in 2019

Just 65 of the 192 exchange-listed IPOs of 2018 are in positive territory. Some of the winners will keep winning in the year ahead.

Rick Munarriz
Rick Munarriz
Dec 28, 2018 at 9:08AM
Technology and Telecom

It hasn't been easy to go public in 2018. Just 65 of the 192 IPOs to hit the market this year are in positive territory. I took a look at some of the broken offerings that have a chance to bounce back in 2019. Now it's time to check out some of the winning debutantes that have a shot at going even higher in the year ahead. 

Eventbrite (NYSE:EB), Upwork (NASDAQ:UPWK), and Bilibili (NASDAQ:BILI) have bucked the general market malaise. All three stocks are trading higher than their IPO prices. All three companies have strong fundamentals to keep gains coming in 2019. 

Bilibili anime promo with two characters floating into clouds.

Image source: Bilibili.

Eventbrite

Online event ticketing may not seem like a scintillating growth business, but Eventbrite is making the most of its platform that allows organizers of all sizes to set up events and virally distribute admissions. Revenue soared 51% in 2017, and it's still growing at a heady clip, judging by the 45% top-line burst in its latest quarter. Organic growth is clocking in much lower, but still at a healthy double-digit pace. 

The appeal to Eventbrite is its cost. A whopping 3 million events were listed on Eventbrite in 2017 by 700,000 different organizers, and if the tickets are free, the organizer doesn't have to pay. It's a sticky platform, with a 97% retention rate last year. 

This isn't just about unloading tickets to freeloaders for small-time events. The number of paid tickets sold in the third quarter rose 32% to 23.9 million, with Eventbrite's net revenue per ticket improving by nearly 10% to an average of $3.08. Top-line growth will slow through the next few quarters as organic growth takes the wheel, but as Eventbrite's ticketing platform continues to dominate the online event market the stock itself should continue to be a hot ticket. 

Upwork

The gig economy and global connectivity are making more workers contractors, and no one has a finger on the pulse of that trend the way that Upwork does. Running the world's leading online marketplace for freelancers has its benefits, and for investors, we're talking about steady growth.

Revenue rose 23% in 2017 as well as its latest quarter, and guidance is targeting 20% to 23% for the current quarter. The number of core clients has grown 22% over the past year to top 100,000. Client spend retention is 108%, so it's doing a good job of satisfying the needs of both freelancers and the companies seeking them out for work. Upwork is in the right place at the right time, and the year ahead should provide steady growth and niche dominance. 

Bilibili

Most of the 2018 IPOs out of China are underwater at the moment, but that's not the case with Bilibili. It's one of the region's few debutante winners, and a big reason for its success is its growing hold on China's youth. Bilibili runs a portal for anime fans. More than 80% of its audience consists of teens and pre-teens.  

Revenue rose 48% in its latest quarter, as monthly active users climbed 25% to 92.7 million young anime fans. Mobile gaming is accounting for the lion's share of the revenue here, but Bilibili's growing even faster with paid subscriptions and live broadcasting initiatives. Engagement is strong, a common theme across all three of the IPOs that I feel should keep shooting higher in 2019. Bilibili is positioned well to keep climbing in the year ahead, and that should be a lay-up if growth investors warm up again to fast-growing Chinese dot-coms.