Why has the APM Human Services (ASX:APM) share price tumbled 12% since Friday's IPO?

Here are the details of APM's float and what's next for the company.

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It's been a rough week for the APM Human Services International Ltd (ASX: APM) share price.

The company tumbled out of the gates on Friday, finishing its first day on the ASX 6.19% lower than its prospectus' offer price of $3.55.

It hasn't fared much better since. It fell another 6.9% on Monday before experiencing a slight respite yesterday.

At the time of writing, the APM share price is $3.10, having fallen 2.9% today.

That brings its losses so far to 12.6%.

Let's take a look at what the company is about and its initial public offering (IPO).

About APM Human Services International

APM provides human services with a focus on individuals' employability, as well as health, social, and economic wellbeing.

Some of its services include job seeker support, disability employment, and aged care assessments.

It's a provider of the Australian Government's Jobactive and Disability Employment Services.  

Therefore, it likely comes as no surprise that the Australian Government is one of the company's biggest Australian customers. It also has Bupa and the National Disability Insurance Agency on its books.

It's a similar picture in APM's other markets, with most customers being various governments and government departments.


APM's debut didn't see its share price perform as well as other company's share prices have on floating, but the company's boss is optimistic about its future.

APM chair and founder Megan Wynne, commented on the company's float, saying:

Following the IPO we will continue to grow and expand our business globally. We will continue to deliver on our purpose of enabling better lives, by partnering with our stakeholders, and supporting more clients each year, to positively change their lives.

APM's $982.1 million float was expected to see it with a market capitalisation of around $3.25 billion.

Instead, at its current share price, APM has a valuation of approximately $2.84 billion.

What's next for the APM share price?

The company's predicted revenue might be what drives the APM share price forward from here.

APM is expecting to bring in around $1.3 billion this financial year. Its forecasts pro-forma earnings before interest, tax, depreciation, and amortisation (EBITDA) of $294.9 million.

Its net profit after tax and amortisation is expected to be $68.2 million.

Last financial year, 52% of APM's revenue came from Australia. The other 26% was from Europe and 12% was from the United States. The Asia Pacific region topped it off, bringing in 8% of the financial year's revenue.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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