In this article, we discuss the 14 best new stocks to buy according to analysts. To skip the detailed analysis of the IPO market, go directly to the 5 Best New Stocks To Buy According To Analysts.
The year 2021 witnessed a substantial surge in initial public offerings (IPOs); however, the momentum notably decelerated throughout the following years of 2022 and 2023. According to S&P Global Market Intelligence, the total value of securities issued through the US IPOs amounted to $15.76 billion in 2023, marking a decline from the $20.91 billion recorded in 2022 and a significant contrast to the staggering $286.86 billion raised in 2021. 2021 recorded its lowest number of IPO launches in the US in the second quarter at 150, which was more than the entirety of 2022 and 2023 at 149 and 102, respectively. The slowdown in IPOs has followed through to the first quarter of 2024 as 25 new US IPOs were launched in the first quarter of 2024, compared to 23 in Q1 of 2023 and 71 in Q1 of 2022.
Anticipated Expansion as Optimism Surrounds IPO Market
On April 29, Colin Stewart, Morgan Stanley’s global head of technology equity capital markets, told CNBC that the IPO market is rebounding after a prolonged hiatus. He expects 10 to 15 more tech companies to go public by the end of 2024, with even more promising prospects for 2025. He said the IPO market is “going to have a better year in 25 but a good year in 24.” Stewart highlighted that recent IPOs have demonstrated strong pricing and trading performance, which indicates a positive outlook for future offerings.
On May 8, JPMorgan’s global chairman of investment banking, Jennifer Nason reiterated Colin Stewart’s sentiment about the IPO market in a CNBC interview. She said that we are seeing “an opening” of the IPO market, although it is slower than what she expected. However, she emphasized that IPOs have performed admirably as an asset class, noting that the initial wave of IPOs has traded exceptionally well.
JPMorgan served as the primary underwriter for two of the recent most prominent IPOs, Astera Labs, Inc. (NASDAQ:ALAB) and Viking Holdings Ltd (NYSE:VIK). Astera Labs, Inc. (NASDAQ:ALAB) is a semiconductor solutions provider, and its IPO was priced at $36 per share on March 19, 2024, and is trading at over $70 as of May 10. The company has already reached a market capitalization of $10.9 billion. Viking Holdings Ltd (NYSE:VIK) is one of the most luxurious cruise lines in the world. Its IPO was launched on April 30 with a $24 offer price per share and as of May 10, it is trading at $28.6 per share and has a market capitalization of $12.35 billion.
Recent Earnings of Successful IPOs
Astera Labs, Inc. (NASDAQ:ALAB) has been profitable right off the bat and announced Q1 2024 earnings on May 7. The company reported a non-GAAP EPS of $0.10, which topped analysts’ estimates by $0.06. The revenue grew by 269.5% year-over-year to $65.26 million and beat the estimates by $8.59 million. For Q2, Astera Labs, Inc. (NASDAQ:ALAB) expects a 10% to 12% sequential increase in its revenue and predicts an EPS of $0.11. The company’s CEO, Jitendra Mohan made the following comments at its Q1 earnings call:
“This year is off to a great start with Astera Labs seeing strong and continued momentum along with the successful execution of our IPO in March. First and foremost, I would like to thank our investors, customers, partners, suppliers and employees for their steadfast support over the past six years. We have built Astera Labs from the ground up to address the connectivity bottlenecks to unlock the full potential of AI in the cloud. With your help, we’ve been able to scale the company and deliver innovative technology solutions to the leading hyperscalers and AI platform providers worldwide.
But our work is only just beginning. We are supporting the accelerated pace of AI infrastructure deployments with leading hyperscalers by developing new product categories, while also exploring new market segments. Looking at industry reports over the past several weeks, it is clear that we remain in the early stages of a transformative investment cycle by our customers to build out the next generation of infrastructure that is needed to support their AI roadmaps. According to recent earning reports, on a consolidated basis, CapEx spend during the first quarter for the four largest U.S. hyperscalers grew by roughly 45% year-on-year to nearly $50 billion. Qualitative commentary implies continued quarterly growth in CapEx for this group through the balance of the year.”
Reddit, Inc. (NYSE:RDDT) was another big name that launched its IPO this year on March 21. The company’s IPO was priced at $34 per share and its share price is already up nearly 57.5% from its IPO price as of May 10. In the first quarter of 2024, Reddit, Inc. (NYSE:RDDT) generated a revenue of $243 million, outperforming the estimates by $29 million. It reported a net loss per share of $8.19 due to stock-based compensation costs and associated taxes that totaled $595.5 million, which mostly stemmed from its IPO. For the second quarter, Reddit, Inc. (NYSE:RDDT) expects revenues between the range of $240 million and $255 million and adjusted EBITDA between the range of $0 to $15 million. At its Q1 earnings call, the company’s co-founder and CEO, Drew Vollero said:
“We believe Reddit is more important now than ever before, not only as an alternative to traditional social media, but as we enter the AI era where the value of our corpus continues to grow. The paradox I see is that as more content on the Internet is written by machines, there’s an increasing premium on content that comes from real people. And we have nearly two decades of authentic conversation, unique perspectives, earnest advice, honest reviews and answers the questions about every topic imaginable. There are multiple ways, Reddit benefits from the evolving ecosystem, and we’re still in the early stages of exploring use cases for Reddit data. This includes both internally to improve the platform and experience for users and externally through partnerships.”
With experts expecting the upcoming years to be an eventful time for new companies, some of the best new stocks to buy according to analysts include Savers Value Village, Inc. (NYSE:SVV), Oddity Tech Ltd. (NASDAQ:ODD), and Astera Labs, Inc. (NASDAQ:ALAB).
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Our Methodology
For this article, we used the Finviz Stock screener to identify 28 stocks with a market cap of over $2 billion that have launched their IPOs over the last 12 months. We then narrowed our list to the 14 stocks with the highest average analyst price target as of May 10. During the selection process, we prioritized profitable companies even if they had a lower average analyst price target than the companies that have not recorded any profits yet. The stocks are listed in ascending order of their average analyst price target. You can also check 13 Best IPO Stocks to Buy Heading into 2024.
Hedge fund sentiment around each stock has also been added. The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds as of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
14 Best New Stocks To Buy According To Analysts
14. Veralto Corporation (NYSE:VLTO)
IPO Date: 10/02/2023
Number of Hedge Fund Holders: 45
Average Analyst Price Target Upside: 3%
Veralto Corporation (NYSE:VLTO) is a provider of water analytics, water treatment, marking and coding, and packaging and color services. The company offers its services and products through various brands, including Videojet, Linx, Hach, Trojan Technologies, and others.
On April 25, BMO Capital analyst John McNulty raised the price target on Veralto Corporation (NYSE:VLTO) to $101 from $97 and kept an Outperform rating on the shares. According to WSJ, the stock has Buy-equivalent ratings as per the 7 Wall Street analysts that have covered it. The average price target of $99.30 implies an upside of 3% to the stock’s current price.
In the fourth quarter of 2023, Veralto Corporation (NYSE:VLTO) was part of 45 hedge funds’ portfolios with a total stake value of $1.053 billion.
Veralto Corporation (NYSE:VLTO) is one of the best new stocks to buy according to analysts, along with Savers Value Village, Inc. (NYSE:SVV), Oddity Tech Ltd. (NASDAQ:ODD), and Astera Labs, Inc. (NASDAQ:ALAB).
Weitz Investment Management stated the following regarding Veralto Corporation (NYSE:VLTO) in its fourth quarter 2023 investor letter:
“Most recently, we purchased new positions in Veralto Corporation (NYSE:VLTO) and Global Payments, Inc. (GPN) during the fourth quarter. Veralto is the latest spin-off from long-time holding Danaher. The company enjoys strong market positions and enviable economics in its water quality and product identification businesses. We see a clear path to modest organic growth, operating margin expansion, and value-creating capital deployment. While the stock doesn’t scream cheap on the surface, we think Veralto could evolve into a real gem.”
13. Kodiak Gas Services, Inc. (NYSE:KGS)
IPO Date: 06/28/2023
Number of Hedge Fund Holders: 15
Average Analyst Price Target Upside: 7.95%
Kodiak Gas Services, Inc. (NYSE:KGS) runs contract compression infrastructure for its clients in the oil and gas industry in the U.S. The company operates through two segments, Compression Operations and Other Services. In the fourth quarter of 2023, 15 hedge funds had investments in Kodiak Gas Services, Inc. (NYSE:KGS), with positions worth $100.190 million.
As of May 10, Kodiak Gas Services, Inc. (NYSE:KGS) has Buy-equivalent ratings among 7 analysts, and its average price target of $29.88 has an upside of 7.95% from present levels.
On May 8, Kodiak Gas Services, Inc. (NYSE:KGS) reported first-quarter earnings with a GAAP EPS of $0.39 and revenue of $215.5 million, which jumped 13.4% year-over-year.
12. Birkenstock Holding plc (NYSE:BIRK)
IPO Date: 10/11/2023
Number of Hedge Fund Holders: 19
Average Analyst Price Target Upside: 9%
Birkenstock Holding plc (NYSE:BIRK) is engaged in manufacturing and selling footwear products, including sandals, shoes, and closed-toe silhouettes, among others.
As of May 10, Birkenstock Holding plc (NYSE:BIRK) has received Buy-equivalent ratings from 11 Wall Street analysts. The average price target of $49.57 represents an upside of 9% from current levels.
Birkenstock Holding plc (NYSE:BIRK) was held by 19 hedge funds in the fourth quarter of 2023 and the stakes amounted to $379.877 million. Birkenstock Holding plc (NYSE:BIRK) is among the best new stocks to buy according to analysts.
11. Arm Holdings plc (NASDAQ:ARM)
IPO Date: 09/14/2023
Number of Hedge Fund Holders: 22
Average Analyst Price Target Upside: 9.6%
Arm Holdings plc (NASDAQ:ARM) is engaged in designing, developing, and licensing central processing unit products and related technologies. In Q4 of 2023, 22 hedge funds held stakes in Arm Holdings plc (NASDAQ:ARM), with positions worth $1.52 billion.
On May 9, JPMorgan raised the price target on Arm Holdings plc (NASDAQ:ARM) to $115 from $100 and maintained an Overweight rating on the shares. On May 8, the company announced Q4 earnings. The non-GAAP EPS reported was $0.36 and beat the analysts’ estimates by $0.06. The revenue increased by 46.6% year-over-year to $928 million and surpassed the estimates by $49.76 million.
As of May 10, Arm Holdings plc (NASDAQ:ARM) has Buy-equivalent ratings among 18 analysts, and its average price target of $119.27 has an upside of 9.6% from present levels.
10. Knife River Corporation (NYSE:KNF)
IPO Date: 06/01/2023
Number of Hedge Fund Holders: 39
Average Analyst Price Target Upside: 11.74%
Knife River Corporation (NYSE:KNF) is a provider of aggregates- led construction materials and contracting services in the U.S. The company runs through the Pacific, Northwest, Mountain, Central, and Energy Services segments.
As of May 10, Knife River Corporation (NYSE:KNF) has received Buy ratings from 4 Wall Street analysts. The average price target of $87.75 implies an upside of 11.74% from the stock’s current price.
39 hedge funds had stakes in Knife River Corporation (NYSE:KNF) in Q4 of 2023 and the total stake value was $462.113 million. It is among our best new stocks to buy according to analysts.
Longleaf Partners stated the following regarding Knife River Corporation (NYSE:KNF) in its fourth quarter 2023 investor letter:
“Knife River Corporation (NYSE:KNF) – Construction materials and contracting company Knife River was a top contributor for the year and for the quarter. We initiated the position this year after it was spun out of MDU Resources Group, a utility holding company in North Dakota. We were familiar with the business from previous work done on MDU. Knife River was the business that originally attracted us to MDU, and the spin gave us the opportunity to buy the best business as a standalone stock at a discount when utility shareholders focused on a steady dividend dumped it. The business had not been optimized for a long time under MDU but still delivered solid mid-single digit revenue growth over the prior decade. We believe CEO Brian Gray and his plan to improve cash flow represents an improvement over the previous path. Knife River reported strong results in its first two quarters, beating expectations and company guidance.”
9. SharkNinja, Inc. (NYSE:SN)
IPO Date: 07/31/2023
Number of Hedge Fund Holders: 36
Average Analyst Price Target Upside: 13.36%
SharkNinja, Inc. (NYSE:SN) designs and provides various kinds of electronic products, including cleaning appliances, cooking and beverage appliances, and others. 36 hedge funds had investments in SharkNinja, Inc. (NYSE:SN) in the fourth quarter of 2023, with positions worth $709.329 million.
On May 10, Jefferies raised the price target on SharkNinja, Inc. (NYSE:SN) to $100 from $75 and maintained a Buy rating on the shares.
As of May 10, based on 10 Wall Street analysts’ ratings, SharkNinja, Inc. (NYSE:SN) has an average price target of $81.44 represents an upside of 13.36% from the current levels. 8 out of 10 analysts keep a Buy rating on the stock.
8. Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX)
IPO Date: 06/30/2023
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 13.57%
Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX) is a Mexico-based real estate company that is engaged in the acquisition, development, management, operation, and leasing of industrial buildings and distribution facilities. Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX) is eighth on our list of the best new stocks to buy according to analysts.
On April 25, Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX) reported first-quarter earnings. The company reported funds from operations (FFO) of $0.05. The revenue grew 20.4% year-over-year to $59.7 million.
As of May 10, Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX) has been covered by 12 Wall Street analysts and 9 keep a Buy-equivalent rating on the stock. The average price target of $41.58 has an upside of 13.57% from the stock’s current price.
7. Fidelis Insurance Holdings Limited (NYSE:FIHL)
IPO Date: 06/29/2023
Number of Hedge Fund Holders: 17
Average Analyst Price Target Upside: 14.4%
Fidelis Insurance Holdings Limited (NYSE:FIHL) is a Bermuda-based company that offers insurance and reinsurance products. It operates through Specialty, Reinsurance, and Bespoke segments and provides its products in Bermuda, the Republic of Ireland, and the United Kingdom. 17 hedge funds had investments in Fidelis Insurance Holdings Limited (NYSE:FIHL) in Q4 of 2023, with positions worth $62.147 million.
As of May 10, 5 Wall Street analysts have given Buy ratings to Fidelis Insurance Holdings Limited (NYSE:FIHL). The stock’s average price target of $21.14 represents an upside of 14.4% from the present levels.
On May 9, Fidelis Insurance Holdings Limited (NYSE:FIHL) reported Q1 net income of $81.2 million. Additionally, it is a dividend stock and announced a quarterly dividend of $0.10 on May 8, payable by June 28 to the shareholders of record on June 14. The stock has a dividend yield of 2.16%, as of May 10.
6. Atmus Filtration Technologies Inc. (NYSE:ATMU)
IPO Date: 05/25/2023
Number of Hedge Fund Holders: 14
Average Analyst Price Target Upside: 15.41%
Atmus Filtration Technologies Inc. (NYSE:ATMU) is a Tennessee-based company that is engaged in designing, manufacturing, and selling filtration products through its brand, Fleetguard. Atmus Filtration Technologies Inc. (NYSE:ATMU) has Buy-equivalent ratings among 6 analysts as of May 10, and its average price target of $35.42 has an upside of 15.41% from current levels.
On May 3, Atmus Filtration Technologies Inc. (NYSE:ATMU) announced Q1 earnings. The non-GAAP EPS reported was $0.60 and the revenue generated during the quarter was $427 million.
Atmus Filtration Technologies Inc. (NYSE:ATMU) was part of 14 hedge funds’ portfolios in the fourth quarter of 2023 with a total stake value of $105.318 million.
Atmus Filtration Technologies Inc. (NYSE:ATMU) has caught the attention of analysts as one of the best new stocks to buy. Other such stocks include Savers Value Village, Inc. (NYSE:SVV), Oddity Tech Ltd. (NASDAQ:ODD), and Astera Labs, Inc. (NASDAQ:ALAB).
Click to continue reading and see the 5 Best New Stocks To Buy According To Analysts.
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Disclosure. None. 14 Best New Stocks To Buy According To Analysts is originally published on Insider Monkey.