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Nerdwallet IPO shares are coming to Robinhood.
Even before the financial content provider hits the Nasdaq, Robinhood IPO Access gives retail investors a chance to buy NerdWallet stock early. That creates a profit opportunity rarely afforded to retail investors in the past.
Just look for the NerdWallet stock ticker, NRDS, in the Robinhood app to get started.
The company finally confirmed rumors older than a year when it filed for IPO in early October.
This is one of the more well-known money blogs out there. That may make NRDS stock look like an attractive buy to some. Then, seeing who the company must compete with raises questions.
But this market also has its own niche corners for different content providers to thrive. For example, NerdWallet's specialty is personal finance products like credit cards, student loans, and mortgages.
Chances are, you have even seen a credit card recommendation from NerdWallet in the past.
We, on the other hand, specialize in identifying profit opportunities in the stock market. Let's talk about whether NRDS stock is one or not.
What Is NerdWallet?
Nerdwallet.com helps people understand the basics of money management. It specializes in personal banking. And one of the main ways NerdWallet makes money is by promoting financial products to readers.
The company was started by Tim Chen and Jacob Gibson in 2009 as a website. It has grown to much more under the surface.
Business has expanded by way of mergers and acquisitions over the last several years. Most recently, in 2020, NerdWallet acquired a similar company called Know Your Money. That same year, it acquired Funder, a small business loan marketplace, increasing the emphasis in applied, personal financial strategy.
It also works with non-profits like Inclusiv to advance financial equity through local credit unions.
The main target audience of NerdWallet is millennials, with a focus on college loans and financial technology.
The company is affiliated with banks and insurance companies, which pay commissions whenever NerdWallet directs a customer their way.
No surprise, relationships with financial institutions can go a long way when you start looking at the numbers.
Is NerdWallet Profitable?
NerdWallet has been profitable before. Matching the right users with the right financial products helped it get there - it's a profitable business.
However, its most recent report showed a loss of $26.8 million for the first half of 2021, down from a $3.1 million profit in the same period last year. Despite that, revenue had grown from $137.3 million to $181.6 million.
Every referral, depending on the product NerdWallet is promoting, can make the company a couple bucks to a couple hundred.
Profitable or not, revenue growth points to success directing readers to partners, an increase in customers, or an increase in partners, all of which are good things. The profit hit could then come from rising costs associated with the pandemic or from a conscious effort to expand the service.
Mostly, though, pandemic helped more than hurt companies like NerdWallet, since people started searching for the best ways to get ahead of a volatile stock market.
Plus, we know the demand for services like NerdWallet is growing after that. Over 40 million students average nearly $40,000 in student loan debt. And mortgages are becoming more expensive as we near the NerdWallet IPO. That should all boost the company's top line and make it more likely to profit in the year to come.
It will also make the market love the company if its reports stay on track...
Should You Buy NerdWallet Stock?
We're yet to find out the value of NerdWallet. Last we heard, the company was valued at $520 million in 2016. It's likely much higher than that today.
NerdWallet might be in a highly competitive sea of financial content companies. But it does a good job of standing out.
Its most direct competition comes from companies like Credit Karma, which also publish personal finance content that directs to real credit cards and loan programs. And there are only a handful of successful ones - one of them is NerdWallet.
More than any other company, though, a brand like NerdWallet must compete with itself. Readers always want to question NerdWallet and Credit Karma's interests between promoting big banks and delivering honest information.
So far, this hasn't been a problem for NerdWallet. In fact, having just a few other similar competitors is more likely to entice them to write authentic material to keep their audience engaged.
NerdWallet is already a leader in its industry, and the audience is growing, so it must be doing something right.
Not many companies can negotiate deals with big banks like this one can. The fact that it's growing in popularity is a plus. That's a steady stream of income that will pay off for investors in the long run.
Of course, we still have much to learn about NerdWallet in order to make a solid prediction about its future stock.
Stay with us for more as we near the NerdWallet IPO and find out whether it's a buy or not.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.