Brokerages initiate coverage of Sterling Check as IPO quiet period ends

Sterling Check

18/10/2021 19:25

** Multiple analysts start coverage of job screening firm
Sterling Check  STER.O  after quiet period ceases
    ** Shares of STER, controlled by Goldman Sachs  GS.N  with
about two-thirds stake, opened at $27 in their Sept 23 debut vs
$23 IPO price  urn:newsml:reuters.com:*:nL4N2QP2S6
    ** JP Morgan initiates at "overweight" with $30 PT, says
STER has distinguished itself through enhancements to its
technology and customer service
    ** The pre-employment background screening industry is large
and growing quickly due to secular tailwinds, including
increased mobility, remote work, higher employee churn, and
sizable freelance workforce - JPM
    ** Morgan Stanley starts at "equal-weight" with $28 PT
    ** STER has an attractive top line growth rate, and margin
expansion potential, MS says, but its stock is appropriately
priced at 16x 2022 estimated EBITDA, and should trade at slight
discount to closest public peer First Advantage  FA.O , which
trades at 16.9x
    ** Bullish initiations on STER include KeyBanc
("overweight", $30 PT), Baird ("outperform", $34 PT) and Stifel
("buy", $30 PT)
    ** STER shares on Mon up 1.3% at $25.93, up ~13% from IPO
price
    ** Meanwhile, FA shares up 1.6% at $20.96 on the session,
trading 40% above their Jun IPO price of $15

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 1-332-219-1430))