The U.S. initial public offering market has taken flight this year, with the benchmark Renaissance IPO Index up 16.9% year to date as of Oct. 17.
That upward trend is buoyed by a robust U.S. stock market, as seen by the S&P 500’s 24% rise through mid-October. With the market winds at their backs, U.S.-based IPOs have raised more cash in the first three quarters of 2024 ($27.3 billion) than in all of 2023, according to new data from research firm EY.
The downbeat part of that news is that the IPO market isn’t as vibrant outside the U.S., and the Renaissance International IPO Index is down by 8.1% year to date.
[Sign up for stock news with our Invested newsletter.]
Successful IPO takeoffs have been spread between small and midsize companies, and aftermarket activity has also proven crisp. A fresh round of Federal Reserve interest rate cuts (with more cuts potentially on the way in December) has boosted the IPO market, as have moderating inflation levels and dissipating recession-related angst. EY, among other market watchers, expects that momentum to continue well into 2025.
Here’s a snapshot of the IPO sector as of late October, with some new names entering the publicly traded market:
| Recent/Upcoming IPO | IPO Valuation* |
| Septerna (pending ticker: SEPN) | $628 million |
| Lineage Inc. (LINE) | $18 billion |
| Tempus AI Inc. (TEM) | $6.4 billion |
| Astera Labs Inc. (ALAB) | $5.5 billion |
| Reddit Inc. (RDDT) | $6.5 billion |
| Ibotta Inc. (IBTA) | $2.7 billion |
| StubHub | $16.5 billion |
*Valuations for Septerna and StubHub are estimates.
Septerna (SEPN)
IPO valuation: $628 million
This Goldman Sachs-backed biotechnology company just announced its IPO rollout on Oct. 21. The California-based drug developer is looking to raise $186 million by selling an estimated 10.9 million shares priced between $15 and $17.
The company is progressing on the G-protein-coupled receptor (GPCR) therapies front, as its SEP-786 oral drug to treat hypoparathyroidism, a rare endocrine disease, is reportedly seeing early success in clinical trials. As of Oct. 21, no specific IPO date has been announced.
Lineage Inc. (LINE)
IPO valuation: $18 billion
This temperature-controlled warehouse real estate investment trust, or REIT, is trading around $78 per share as of Oct. 23, approximately level with its IPO “day one” stock price. LINE stands tall in the temperature-controlled warehouse market, holding about 480 storage properties with 3 billion cubic feet of capacity in 19 countries.
Wall Street analysts are largely bullish on the stock, with J.P. Morgan’s Michael Mueller giving it an “overweight” call and setting a one-year target price of $93 per share.
Goldman Sachs and Capital One have added to the analyst estimates, with the former calling for a $104 target price and the latter issuing an “overweight” slot for LINE in mid-September.
At its IPO, LINE boasted an $18 billion valuation, making it the largest new public offering since semiconductor manufacturer Arm Holdings PLC (ARM) raised $4.8 billion in its 2023 IPO.
Tempus AI Inc. (TEM)
IPO valuation: $6.4 billion
This genomic testing and data analysis firm, started by Groupon co-founder Eric Lefkofsky in 2015, has bounced around over the past 90 days. While the stock is up 8.3% over that period as of Oct. 22, shares are down 14.5% in the past month as the company struggles to find a firm financial footing. Even so, the current stock price has increased significantly since TEM’s June IPO, when the stock opened at $37 per share.
The company made news this week with an announced partnership with Avacta Therapeutics. The deal centers on a “strategic AI-powered collaboration that will provide Avacta access to Tempus’ multimodal datasets comprising primary tumor samples and associated clinical data from over 200,000 patients across a broad range of cancer indications,” TEM announced on Oct. 21.
Earlier in 2024, Tempus announced a multiyear data collaboration with BioNTech SE (BNTX) to support BioNTech’s cancer therapy development.
Ark Investment Management’s Cathie Wood, one of the biggest traders on Wall Street, is a true believer in Tempus. In August, when TEM temporarily dipped in price by about 15%, Ark snapped up $1.5 million worth of TEM shares. Wood returned for another bite of the apple on Oct. 15, snapping up 103,000 shares.
Analysts appear supportive of the stock. Loop Capital hiked its one-year target price in October from $48 to $57. Other analysts have backed Tempus, with big names like J.P. Morgan, Morgan Stanley and Stifel recently issuing early “buy” calls on its stock. TD Cowen has also weighed in with a “buy” on TEM, with a target price of $50 per share. TEM closed at $46.53 on Oct. 22.
Astera Labs Inc. (ALAB)
IPO valuation: $5.5 billion
Astera Labs has impressed since its March 19 IPO date, with its share price skyrocketing from $36 on day one of public trading to $68.29 on Oct. 22.
The Santa Clara, California-based company specializes in AI and cloud infrastructure connectivity solutions and has seen its shares rise by roughly 30% in the past month alone. Investment managers and analysts point to the company’s new fabric-switch rollout for heavy-duty artificial intelligence applications in cloud-scale accelerated computing systems.
Morgan Stanley’s Joseph Moore was all over the announcement, signaling the fabric-switch technology should propel the company’s stock price to $74 per share, up from his last estimate of $55 per share.
In the third quarter, Jefferies’ Blayne Curtis included ALAB in his picks of high-performing AI stocks, with an $85 price target.
Reddit Inc. (RDDT)
IPO valuation: $6.5 billion
Let’s call this recently launched IPO “Reddit the rocket,” as RDDT has seen its share price more than double since its March IPO. Since then, shares have soared from $34 per share on opening day to $79 in late October.
On Oct. 9, Jefferies gave the stock a boost with its prediction that the company’s EBITDA (earnings before interest, taxes, depreciation and amortization) will soar to $450 million by 2026, easily doubling Reddit’s current EBITDA rate. In support of the bullish outlook, Jefferies analyst John Colantuoni cited rising user growth, several big data licensing deals and expanded use of AI to add content value to the social media platform. He sees RDDT shares rising to $90 per share in the next year.
Wall Street seems excited for Reddit’s prospects, especially with the treasure trove of user data the company controls and its growing “A-plus” content partner list. That includes Alphabet Inc. (GOOG, GOOGL), OpenAI and the National Football League, and possibly Microsoft Corp. (MSFT) and Meta Platforms Inc.’s (META) Facebook added to the list down the road.
FactSet recently noted that of 19 analysts tracking the stock, 12 have an “overweight” rating on Reddit, six are taking a “hold” stance, and just one pegs RDDT at an “underweight” rating.
Ibotta Inc. (IBTA)
IPO valuation: $2.7 billion
Trading around $72 per share in late October, cash-back rewards platform Ibotta has slid from the $88-per-share price tag on its mid-April IPO, though it’s up from $54 per share in early September. That yo-yo effect may vex shareholders, but the stock has stabilized, with shares up about 9% over the past three months as of Oct. 22.
Ibotta’s shares got a boost in August after the company announced a $100 million share buyback program (analysts view share buybacks as a sign that management is a big believer in a firm’s prospects).
IBTA shares also gained after Ark’s Wood took a bigger stake in the company on the dip, adding to a position she opened in April. The company’s cash-back rewards program has added Walmart Inc. (WMT) to its retail client list and currently has 50 million accounts; it says it has paid out $2 billion in rebates.
StubHub
Potential IPO valuation: $16.5 billion
This event-ticketing giant was leaning toward a Labor Day IPO with a $16.5 billion valuation, but that didn’t materialize as company leaders mulled their market prospects.
Launched in 2000, the online ticket service provider is now the largest ticket agency in the world after its Viagogo merger, which was completed in September.
When the time comes, StubHub could be one of the bigger IPO stories in 2024 (or even 2025), given its prime position in the $8 billion resale-ticket market. StubHub has no inventory, and it profits when big concerts and sporting events sell high-demand tickets.
On the downside, StubHub has a huge $2 billion debt load and is currently enmeshed in legal troubles over ticket-related junk fees. Additionally, sector competitors like Live Nation are gaining ground fast.
Even so, when StubHub goes public, its business model and industry status should appeal to retail and institutional investors at a lower valuation rate than current estimates.
StubHub could wind up with a familiar competitor when its stock goes public, as digital ticket provider SeatGeek has also filed paperwork for an IPO with a reported $1.4 billion valuation and an estimated late-2024 debut.
More from U.S. News
5 of the Best Stocks to Buy Now
10 of the Best Bank Stocks to Buy for 2024
10 Best Growth Stocks to Buy for 2024
7 Recent and Upcoming IPOs in 2024 originally appeared on usnews.com
Update 10/23/24: This story was previously published at an earlier date and has been updated with new information.
