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Ambarella Inc (AMBA), Chuy’s Holdings Inc (CHUY): Are These Top Post-IPO Performers Still a Buy?

#1 SolarCity Corp (NASDAQ:SCTY)

No other post-IPO performer even comes close to the gains of SolarCity Corp (NASDAQ:SCTY), a stock that has rallied an incredible 462.50%. The company is engaged in the design, installation and sale or lease of solar energy systems to residential and commercial customers.

While this could eventually become a highly lucrative business, it is currently producing growth of less than 25%. Furthermore, the company is nowhere near profitable, having operating margins of negative (53.52%). Thus I can’t find any reason to buy after this rally, especially considering its price/sales ratio of 21.0. The stock is simply too expensive.


I explain in my book, Taking Charge With Value Investing(McGraw-Hill, 2013), that contrary to popular belief, IPOs can offer some of the best opportunities in the market. Of course this is dependent upon the industry, but companies that decide to become public are usually at exciting times in their history and then have large amounts of cash to invest in the company from the IPO. With that said, you must continue to monitor such companies, and be ready to take profits if a stock becomes too expensive (hence SolarCity Corp (NASDAQ:SCTY)). Overall, it’s a market that investors should explore with immense interest.

The article Are These Top Post-IPO Performers Still a Buy? originally appeared on and is written by Brian Nichols.

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