Many expected the Snap IPO earlier this year to help drive more tech Unicorns into the public markets. Some have followed suit and listed, but to rather unimpressive results. One such company is IT solutions provider Presidio (PSDO).

Presidio’s Offerings

Presidio, formerly known as Aegis Holdings, was founded in 2003 by Pete Kocks. It was set up to provide professional and managed services for advanced IT Infrastructure solutions. In 2015, Presidio was acquired by private equity firm Apollo Global Management for an undisclosed sum.

Today, Presidio is a leading provider of IT solutions to the middle market in the US. It enables business transformation through its IT solution services. It has three key areas of operations –Digital Infrastructure, Cloud, and Security. Besides providing strategy, consulting, design and implementation related services, Presidio also offers its customers its expertise in project management, technology acquisition, and maintenance-related services. Presidio is well-respected in the enterprise world and as of June 2016, it had more than 7,000 middle-market, large, and government organizations as its customers spread across industries.

Presidio’s Financials

Presidio has seen strong revenue growth for its services. Since its 2012 fiscal year, revenues have grown at 11% compounded annual growth rates. For 2016, revenues grew 14% over the year to $2.715 billion. Digital infrastructure accounted for 76% of the company’s revenues followed by Cloud’s 15% share. Security services accounted for the remaining 9%. But the company continues to suffer losses, albeit at reducing levels. It ended fiscal 2016 with a net loss of $3.4 million compared with net loss of $29.4 million a year ago. Fiscal 2015 losses were higher as they still included the cost of the Apollo and Presidio merger. On an adjusted basis, for fiscal 2016, Presidio reported a net income of $81.2 million and an EBITDA of $211.1 million. For fiscal 2015, adjusted net income came in at $72 million and adjusted EBITDA was $184.8 million.

Presidio’s biggest concerns right now are competition and low profitability. Competition stems from technology resellers and professional services providers like Accenture, CSC, IBM, and HPE. Most of these players have bigger pockets, higher margins, and better IT experience – especially with large enterprise customers.

Presidio’s focus on the middle market does not give it a very upbeat margin. Additionally, it also has to worry about the cost of the high debt. Prior to the acquisition by Apollo, Presidio was carrying a $600 million debt. Since the acquisition, debt has increased to more than $1 billion. Last year, Presidio spent $98.5 out of its operating income of $98.9 million on interest and other expenses. It recently went public to pay back some of this debt.

Presidio’s reasons to go public are not very attractive. Instead of investing in its business, it plans to use the proceeds of the listing to pay back debt. It planned to raise $250 million at a valuation of $2.2 billion. Ultimately, Presidio raised $233 million by selling 16.7 million shares at $14 each. The stock hasn’t performed spectacularly since listing. It is trading at $15.26 with a market capitalization of $1.4 billion. It had peaked to $15.91 soon after listing on the Nasdaq under the ticker PSDO.

But some analysts are still hopeful. Credit Suisse analyst Kulbinder Garcha believes that the company’s niche in the middle-market IT segment will help it grow. The analyst estimates the stock to touch $18.