Executives and board directors from mortgage technology developer Ellie Mae rang the opening bell at the New York Stock Exchange, signaling the opening of the trading day on Feb. 4.
Family and friends accompanied the Pleasanton, Calif.-based company’s leaders on the iconic podium overlooking the historic trading floor. After trading began, the group received a tour of the trading floor, including a demonstration of how trades of Ellie Mae stock are executed.
“It’s just fabulous to go from an idea to ringing the bell at the New York Stock Exchange,” Ellie Mae CEO Sig Anderman told National Mortgage News after the ceremony. “It’s been a great journey and a terrific milestone for the company.”
Ellie Mae filed for an initial public offering in April 2010 and shares of its stock began trading on the NYSE-owned American Stock Exchange in April 2011. In the first year after raising $45 million in the IPO, the value of Ellie Mae’s stock increased 171% and its market cap increased from $122.4 million at the IPO to nearly $352 million in May 2012. The company’s stock was then transferred to the NYSE in June. The company subsequently raised an additional $46.1 million in a June 2012 shelf offering of its stock.
The company posted net income of $6.8 million off revenue of $27.5 million in the third quarter of 2012. Ellie Mae is scheduled to report 4Q12 and full-year results on Feb. 14. According to the NYSE, Ellie Mae’s stock increased 391.2% in 2012, making it the biggest gainer by percentage gain, on the exchange. After opening at $6 per share at the IPO, Ellie Mae stock has traded as high as $30.59 per share and opened at $20.95 per share on Monday.
The stock’s seemingly meteoric rise has at least some analysts wondering when Ellie Mae’s performance will level off. While William Blair analysts noted many strengths in the company, they still downgraded the stock to “market perform” from its previous “outperform” recommendation.
“There is a lot to like about Ellie Mae, but we believe investor expectations are too high,” the Jan. 23 research note reads.
“We believe reaccelerating new user bookings growth will prove challenging because of Ellie Mae’s already-significant market penetration,” the note adds.
Chief Operating Officer Jonathan Corr noted that eight of the nine investment banks that track Ellie Mae have maintained an outperform or buy rating on the stock and said the company is confident it can sustain annual growth of 25% or more “for the next number of years,” and dismissed the suggestion that the company’s market share has plateaued.
“We have less than half the market, so we have a long way to go,” Corr said. “We’re continuing to pick up customers from the competition and we have plenty of runway ahead of us.”