Cramer Blasts Unprofitable SurveyMonkey: 'I'd Steer Clear'

Cloud-based online survey facilitator SVMK Inc SVMK was founded in the late 1990s and started trading for the first time as a public company last week. The company's brand may have survived the test of time, but that may also make it a "dinosaur," according to CNBC's Jim Cramer.

What Happened

SVMK, the legal name for SurveyMonkey, continues to not only operate in the red, but is showing disappointing growth metrics by the Street's standards, Cramer said during his daily "Mad Money" show Monday. The company lost $24 million in 2017, while total losses for the first half of 2018 stand at $27.2 million.

SurveyMonkey showed "anemic" 3-percent paid user growth in the first of 2018, while total revenue growth of 13.8 percent in the first half of the year is "not the stuff dreams are made of," Cramer said. Average revenue per user growth of 14 percent is poor compared to what other cloud-based new-age companies are showing investors, he said.

Why It's Important

The absence of a profit despite being nearly two decades old is "less than ideal" and implies the company is "not a cloud king," Cramer said. SurveyMonkey is not even a "cloud prince," he said — it's a "cloud commoner."

What's Next

SurveyMonkey may offer a good product to consumers, but there is no reason to buy the stock at current levels, Cramer said. If shares were to drop in the future to the $12 level, which coincides with salesforce.com, inc.'s CRM investment price, then it would be worthy of revisiting, he said.

"For now, though, I'd steer clear."

Related Links:

SurveyMonkey Makes Impressive Debut On Wall Street

Eventbrite IPO Tracks With Growth In Music Festivals