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We are looking at Ping Identity (Ping) today. This stock came up earlier today in the conversation among members of our Intelligent Stock Market Investors' private community. We were discussing the work-from-home stocks, and Ping Identity came up as a "baby Okta." And, baby Okta it is ...
Shares of Ping Identity were down more than 5% on Friday. There wasn't any specific reason for such a price decline. We presume that investors took some of their COVID-19 stellar gains off the table, and the price decline is not about any changes in the Ping's growth opportunity.
The company is a 2019 IPO, with more than $2 billion in market capitalization. It enables its clients to offers secure access to any service or application to customers, employees, and partners. For example, it seamlessly integrates with Salesforce, Slack, Zoom, Zscaler, and Microsoft Office 365 apps and is available on the AWS marketplace as an add-on identity management application. The company appeals to large enterprise customers because it offers a flexible infrastructure that can be applied to cloud, on-premise, and private cloud. That's why Ping works with several Fortune 100 companies and has a high dollar-based retention rate of 116%, and 115% in December 2018 and December 2019.
COVID-19 pandemic has forced several large enterprises to take the leap or accelerate their transition to digital, and that can explain the rapid growth rate of demand for Ping since the start of the work-from-home trend.
Financially, the company is not profitable; neither does it generate free cash flow. However, it has a strong balance sheet, no debt, and enough liquid assets to keep on investing and growing. Among companies facilitating the digital transformation, those who are already focusing on large enterprises with legacy and hybrid solutions are some of the fastest-growing stocks. This trend enables Ping Identity to get in front of several new large enterprises and get a foothold in its core market that can continue to pay off for Ping. Check out the company's Stock Card to get to know this watchlist-worthy stock.
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