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By George Leong, B.Comm. Published : February 22, 2021
Ping Identity Stock Up 60% in 3 Months
Given the constant cyberattacks on critical assets, the demand for advanced digital identity solutions will remain strong.
That’s where Ping Identity Holding Corp (NYSE:PING) comes in. The company provides intelligent identity solutions to global companies in the Fortune 500, including the biggest banks, health-care organizations, biopharmaceutical companies, and retailers.
PING stock has nearly tripled since its 52-week low of $12.02 during the March 2020 sell-off. That includes a 61% gain over the last three months.
Ping Identity stock is hovering just below key resistance around $36.00 after debuting with its initial public offering (IPO) in October 2019.
Watch for another attempt by PING stock at $38.00 after the recent emergence of a golden cross pattern, a bullish sign in which the 50-day moving average breaks above the 200-day moving average.
The downside risk for Ping Identity stock is key support around $30.00.
Chart courtesy of StockCharts.com
Strong Fundamentals Support a Bull Case for PING Stock
Ping Identity Holding Corp’s financial history is limited, but so far, the company has been delivering what investors want to see.
| Fiscal Year | Revenues (Millions) | Growth |
| 2017 | $172.5 | N/A |
| 2018 | $201.6 | 16.8% |
| 2019 | $242.9 | 20.5% |
(Source: “Ping Identity Holding Corp.” MarketWatch, last accessed February 18, 2021.)
The positive revenue trend is expected to continue.
Analysts estimate that the company will report soft growth of 2.6% to $249.2 million for the pandemic-impacted 2020. Things are looking better for 2021, with revenues expected to rebound by 17.2% to $292.1 million. (Source: “Ping Identity Holding Corp. (PING),” Yahoo! Finance, last accessed February 18, 2021.)
Meanwhile, Ping Identity reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2017, 2018, and 2019.
| Fiscal Year | EBITDA (Millions) | Growth |
| 2017 | $53.4 | N/A |
| 2018 | $47.2 | -11.6% |
| 2019 | $43.7 | -7.6% |
(Source: MarketWatch, op. cit.)
As far as profitability goes, Ping Identity Holding Corp reported earnings-per-share (EPS) losses based on generally accepted accounting principles (GAAP) for 2018 and 2019.
| Fiscal Year | GAAP Diluted EPS | Growth |
| 2017 | $0.24 | N/A |
| 2018 | -$0.17 | -170.9% |
| 2019 | -$0.02 | 87.1% |
(Source: MarketWatch, op. cit.)
But after adjusting for one-time charges, Ping Identity earned an adjusted $0.44 per diluted share in 2019. Given the pandemic, the company is expected to report an adjusted $0.33 per diluted share for 2020. I expect a beat, based on the outperformance in the first three reported quarters.
The consensus outlook for 2021 calls for Ping Identity Holding Corp to earn $0.40 per diluted share, with the estimates ranging from $0.24 to $0.50 per diluted share. (Source: Yahoo! Finance, op. cit.)
The company’s free cash flow (FCF) was positive in 2017 and 2018 before moving to negative in 2019. Watch for the FCF to improve in 2021.
| Fiscal Year | FCF | Growth |
| 2017 | $904,000 | N/A |
| 2018 | $19.5 Million | 2,051.4% |
| 2019 | -$2.9 Million | -114.9% |
(Source: MarketWatch, op. cit.)
Analyst Take
The number of institutions holding PING stock has been rising. About 234 institutions own 96.2% of Ping Identity stock, led by Vista Equity Partners Management, LLC, which holds a 53.6% stake. (Source: Yahoo! Finance, op. cit.)
Ping Identity Holding Corp is not cheap, trading around 9.8 times its consensus 2021 revenue estimate and having a price/earnings to growth (PEG) ratio of 15.5.
The key for PING stock at this time is financial growth. The company should continue to grow its revenues and move toward improved profitability.
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