Waystar, a technology platform offering payment solutions to the healthcare sector, is anticipated to delay its IPO (Initial Public Offering). This tells investors that the IPO market is losing steam after a brief resurgence. The company originally planned to kick off its roadshow to attract investors this week. However, it is delaying the promotion of its IPO until at least December, as a Wall Street Journal report highlighted.
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This postponement could be a direct consequence of waning investor confidence in IPOs, which can be attributed to challenging economic conditions such as elevated interest rates. Moreover, the underperformance of recently listed stocks remains a drag.
For instance, Arm Holdings (NASDAQ:ARM), Instacart (NASDAQ:CART), Cava Group (NYSE:CAVA), and Oddity Tech (NASDAQ:ODD) made solid stock market debuts. However, these stocks gave up their listing-related gains and are trading below their IPO price. Using TipRanks’ Stock Comparison Tool, let’s look at the prospects of these stocks.
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While these stocks have dropped in value and are trading below their IPO price, TipRanks’ Stock Comparison Tool shows that Wall Street analysts are cautiously optimistic about their prospects.
Though most analysts are bullish about Arm stock (16 out of 24 analysts suggest a Buy), valuation concerns and competitive headwinds keep a few analysts on the sidelines. Meanwhile, Instacart stock, which is trading roughly 18% below its IPO price of $30, is taking a hit due to the heightened competitive environment and slowing growth.
It’s worth highlighting that ODDITY, which leverages AI (Artificial Intelligence) and other tech to develop its beauty products, has seen a decline in its stock price due to its moderating growth on a sequential basis. This has also raised concerns over its valuation. Meanwhile, a challenging macro environment and consumers’ shift in spending towards travel in August and September pose near-term challenges for CAVA, noted Citi analyst Jon Tower. The analyst lowered his price target on CAVA stock and maintained a Hold rating on October 30.
Bottom Line
The anticipated delay in the Waystar IPO, the persistently high inflation rate, and the underperformance of the recently listed stocks suggest that the IPO market could remain subdued in the coming months.
