Tufin Software Technologies [NYSE: TUFN]: Tufin Software Technologies is on a roll. The company went public at a price of $14 and pushed up by over 30% on its first day of trading. Yesterday, it closed trading at $22.50, up 5.88%, and a market cap of $729.82 million. Volumes are on the rise too, and now stand at 1,069,282. The company’s success comes from its approach to cybersecurity. As per the company’s prospectus, the company is the pioneer of a policy-centric approach to security and I.T. This approach allows companies to visualize, define and enforce a unified security policy in complex enterprise environments.
If it follows in the footsteps of several other IPOs of recent times, then it could be headed for some good times ahead. Some of those successful IPOs include Lift and Snapchat. Based on what the company intends to do with the IPO windfall, there is a good chance that it could be on a positive trajectory going forward. The company intends to spend this money on research and development, expanding sales and marketing team and general corporate purposes. All these could play a huge role in driving up its revenues.
For starters, research and development is at the core of the company’s success so far. It’s the backbone behind its policy-centric approach to cybersecurity. In essence, by investing its IPO windfall into research and development, it stands a good chance of making it even bigger in cybersecurity, and pushing up its value over time, as its client numbers grow.
The fact that it also wants to channel that windfall into sales and marketing also gives it the impetus to keep growing in value going into the future. That’s because, with an expanded sales team, it stands to close more deals that will drive up its revenues. With its current sales and marketing team, Tufin Software has made sales of about $85 million. As such, with an expanded sales and marketing team, the company stands to cross the $100 million revenue mark and overtime rise to potentially become a much bigger company by revenues based on aggressive marketing of its tech breakthroughs.
From a technical perspective, this stock looks bullish, and seems to be gaining bullish momentum. The stock is trading firmly above two major moving averages, the 3 month 50-day MA at $20.89 and the 200-day moving day MA at $20.89. With such strong support, and the company’s unique value proposition, it stands in a unique position to gain bullish momentum going into the future. The fact that it has started off in positive territory could see investors take it up in a bid not to miss out, on future potential gains.
Besides, it is coming to the market at a time when other tech companies are going public too such as Pinterest, Uber, and Lyft. This euphoria around tech companies could play a role in pushing up the value of this stock. However, at the end of the day, it’s the market that decides a stock’s direction.