The IPO Market Is At A Pivotal Point As Sell-Side Analysts Weigh In

Monday is anticipated to bring a much-needed boost to the US IPO market, as the quiet period for analysts at banks that underwrote newly public companies comes to an end. This milestone will offer investors an initial glimpse at the analysts' projections for these companies.

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Among the newly public firms garnering significant attention is thrift store chain Savers Value Village Inc., which has been one of the year's top IPOs for deals exceeding $200 million. Since raising $401 million, including the exercise of the underwriters' over-allotment option, the stock has experienced an impressive gain of over 30%, making it the seventh-largest IPO on a US exchange in 2023.

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Other companies that recently made their debut include Kodiak Gas Services Inc., Fidelis Insurance Holdings Ltd., and GEN Restaurant Group Inc., the owner of GEN Korean BBQ. While GEN Restaurant's performance has been notable, with a 20% increase since its June 29 debut, Kodiak Gas has seen a 7% increase, and Fidelis has experienced a 1.5% decline. In comparison, the Renaissance IPO ETF has seen a 7.2% gain during the same period.

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Now, as analysts prepare to share their assessments on Monday, investors who are betting on a resurgence in the IPO market will gain insight into the various models and forecasts set by Wall Street after the quiet period ends.

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Mike Bellin, US IPO co-leader at PricewaterhouseCoopers LLP, emphasizes that analysts possess an in-depth understanding of the metrics of IPO companies compared to their historical peers, making their post-quiet period analysis influential in potentially boosting or impacting these firms' performance.

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While the IPO market has shown signs of gaining momentum in recent months, especially with the debut of various consumer-oriented companies like Savers Value and Cava Group Inc., the total funds raised through IPOs on US exchanges remain lower than last year and have experienced a significant decline of 94% compared to the record year of 2021, according to data.

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To instill confidence in more companies considering going public, it is crucial for those that have already made their debut to perform well in the market, alleviating any concerns among investors. For the four companies that have experienced mixed performances thus far, favorable reception from sell-side analysts could be pivotal in providing the boost they need.

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