HashiCorp IPO — Is HCP Stock a Buy Now? – Motley Fool

Returns as of 12/11/2021
Returns as of 12/11/2021
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HashiCorp ( HCP 0.60% ) is trading on the Nasdaq starting today, Thursday, Dec. 9. The company was founded in 2013 to enable IT collaboration and automation. In a nutshell, it allows users to define infrastructure as code throughout the entire lifecycle, from development and testing to deployment and operations. HashiCorp’s open-source products support cloud, private, and hybrid environments. The company believes that “infrastructure enables innovation,” and it offers a suite of solutions that assist businesses with cloud adoption by simplifying infrastructure challenges with provisioning, security, networking, and deployment of applications. 
HashiCorp’s solutions enable businesses to reduce time to market, improve operational efficiency, boost security, and enable overall simplification of infrastructure deployments. A significant technology trend involves companies moving from on premise, legacy software to the cloud, and HashiCorp is a leader at assisting with this transition. 
In fiscal year 2021, HashiCorp’s open-source solutions were downloaded over 100 million times. (Interestingly, many of the highest-growth software-as-a-service (SaaS) and cloud names have open-source backgrounds, such as Confluent ( CFLT -3.68% ).) But how does the company make money? Since 2016, HashiCorp has been selling proprietary software as bolt-ons, primarily focused toward large organizations. It sells features such as collaboration modules, enterprise use cases, governance and policy modules, and premium support and services on top of its open-source solutions. HashiCorp does not report annual recurring revenue (ARR), but as of last quarter, the company had around $295 million of implied ARR, which is growing at 50% year over year with a 124% annual net dollar retention rate. HashiCorp has 2,101 customers. 558 of these customers are worth over $100k annually, and 58 customers are worth over $1 million. 
Here are some other key facts about HashiCorp:
HCP stock will have dual-class voting. Class B shares will have 10 votes per share. Class A shares, which are being offered in the IPO, will have one vote per share. HashiCorp’s headquarters is in San Francisco, but only around 10% of its 1,400 full-time employees work at the headquarters. The rest of its workforce is remote and scattered across the globe. 
Is HCP stock a buy now? For more information and my thoughts on the valuation and stock price, please watch the below video. 
*Stock prices used in the below video were from the trading day of Dec. 8, 2021. The video was published on Dec. 8, 2021.

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