Coinbase Global‘s (NASDAQ:COIN) initial public offering (IPO) last week pretty much lived up to the hype. The cryptocurrency-exchange stock opened 52% above its reference price of $250. And Coinbase’s public debut became the seventh-biggest U.S. IPO ever, based on market cap at the close of the first day of trading.
Now, though, Coinbase’s future hinges on what happens next with cryptocurrencies. As my Motley Fool colleague Tim Green recently pointed out, it’s even possible that wider adoption of crypto could be bad news for the company. Why? Cryptocurrencies are highly speculative right now. If they move into the mainstream, Coinbase’s trading volume and revenue could plunge.
For investors looking five years to 10 years out, there are other stocks that arguably offer more attractive risk-reward propositions. Here are three recent stocks that recently conducted IPOs that could be even bigger winners over the long term than Coinbase.
Affirm Holdings‘ (NASDAQ:AFRM) shares opened more than 85% higher than its IPO price on its first day of trading on Jan. 13, 2021. That was a stronger start than Coinbase had.
However, after continuing to rise over the next few weeks, the fintech stock was pulled down in the undertow of the market transition away from growth stocks. Affirm’s shares are now down more than 30% year to date.
I think that Affirm’s future still looks bright, though. The company’s technology makes it easy for online merchants to allow customers to buy instantly but pay later, and there’s a huge market opportunity. U.S. e-commerce sales total around $600 billion per year, while global e-commerce sales approach $3.4 trillion.
Merchants love Affirm’s platform because it boosts their sales. Customers like it because it gives them flexibility with no hidden fees or late fees associated with using credit cards. Affirm’s net promoter score (NPS), which measures how likely customers are to recommend a product or service, is even higher than e-commerce giant Amazon‘s score.
Affirm recently announced that it’s acquiring Returnly, which processes online returns and post-purchase payments for more than 1,800 merchants. This looks like a smart move for the company that will help drive even higher growth. I expect Affirm will generate strong returns for long-term investors over the next decade.
Immunocore Holdings (NASDAQ:IMCR) also enjoyed a great IPO on Feb. 5, 2021. The biotech stock opened nearly 58% higher than its IPO share price. However, Immunocore has since given up some of those gains, as its share price is now more than 30% below its peak.
The company’s lead product candidate sailed through late-stage testing with flying colors. Tebentafusp beat out both Keytruda and Opdivo in treating metastatic uveal melanoma. Immunocore plans to file for U.S. regulatory approval of the drug in the third quarter of this year. If Tebentafusp wins U.S. Food and Drug Administration (FDA) approval, it’ll become the first new therapy that improves overall survival for patients with metastatic uveal melanoma in four decades.
Immunocore’s pipeline also includes two other cancer candidates in early-stage clinical studies. The biotech is evaluating IMC-C103C in treating solid tumors, with initial results expected to be reported in the second half of this year. Initial results from a phase 1 study of IMC-F106C in treating solid tumors are expected in mid-2022. In addition, the company plans to begin dosing in a phase 1 study of IMC-I109V in treating patients infected by chronic hepatitis B virus within the next few months.
Sure, Immunocore is risky. However, so is Coinbase. But if the biotech’s experimental drugs successfully make it to market, Immunocore just might deliver greater returns than Coinbase does over the next several years.
Roblox‘s (NYSE:RBLX) IPO on March 10, 2021 might not have been as highly anticipated as Coinbase’s IPO. However, there were plenty of investors who eagerly awaited the public debut of the gaming stock. And it was worth the wait, with Roblox stock opening more than 40% higher than its IPO price.
A little over a month after its IPO, Roblox announced a partnership with Hasbro that caused its shares to soar even more. Hasbro plans to launch toys and games based on Roblox’s video game development platform, including Roblox-inspired Nerf blasters.
Roblox expects full-year revenue in 2021 will jump 60% year over year at the midpoint of its guidance range to nearly $1.5 billion. That’s a little below the $1.8 billion that Coinbase projects for the year. However, Roblox’s market cap is only around two-thirds the size of Coinbase’s market cap.
It’s true that Roblox’s growth rate will slow after the massive gains experienced during the pandemic. But the company is expanding internationally and is targeting older age demographics. These efforts could help make Roblox a bigger winner than Coinbase going forward.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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