In this article, we discuss the 5 best IPO stocks to buy now. If you want to read our detailed analysis of these IPOs, go directly to the 11 Best IPO Stocks to Buy Now.
5. Coupang, Inc. (NYSE: CPNG)
IPO Date: March 11, 2021
Number of Hedge Fund Holders: 33
Coupang, Inc. (NYSE: CPNG) ranks fifth on our list of the best IPO stocks to buy now. It is an e-commerce company based in South Korea and has expanded its operations in Malaysia, Japan, and Tokyo. The company holds 24% of South Korea’s e-commerce market share.
Coupang, Inc. (NYSE: CPNG) went public on March 11, 2021, raising $4.55 billion in its IPO and valuing the company at $60 billion. The company priced its shares at $35 per share, above its range of $32-$34 per share. On its first trading day, Coupang, Inc. (NYSE: CPNG) gained 40%, becoming one of the largest IPOs of 2021 so far. In Q2 2021, the company posted revenue of $4.48 billion, beating the estimates by $50 million. Recently, Daiwa upgraded Coupang, Inc. (NYSE: CPNG) to ‘Buy’, with a $43 price target after the strong Q2 results.
As of Q2 2021, 33 hedge funds tracked by Insider Monkey have positions in Coupang, Inc. (NYSE: CPNG), worth over $18 billion.
4. DoorDash, Inc. (NYSE: DASH)
IPO Date: December 9, 2020
Number of Hedge Fund Holders: 45
DoorDash, Inc. (NYSE: DASH) is an online food ordering and food delivery company based in San Francisco, U.S. In July, the company collected 57% of U.S. consumers’ delivery sales and is regarded as the largest food delivery company in the U.S. DoorDash, Inc. (NYSE: DASH) ranks fourth on our list of the best IPO stocks to buy now.
DoorDash, Inc. (NYSE: DASH) went public in December 2020 and raised $3.37 billion in its IPO. The stock started trading at $182 per share, climbing as high as $189.51. According to the analysts, the solid IPO of DoorDash, Inc. (NYSE: DASH) was due to the pandemic-fueled increase in demand for online delivery services. In Q2 2021, DoorDash, Inc. (NYSE: DASH) posted revenue of $1.24 billion, presenting an 83.7% year-over-year growth. The stock has soared by 35.02% since the beginning of the year. In August, RBC Capital lifted its price target on DoorDash, Inc. (NYSE: DASH) to $210, with an ‘Outperform’ rating on the shares.
In Q2 2021, DoorDash, Inc. (NYSE: DASH) appeared to be the popular investment as 45 hedge funds have positions in the company, compared with 38 in the previous quarter. The total value of these stakes is approximately $9 billion.
3. UiPath Inc. (NYSE: PATH)
IPO Date: April 21, 2021
Number of Hedge Fund Holders: 46
UiPath Inc. (NYSE: PATH) is a global software company that facilitates other companies to automate their business processes. The company offers an end-to-end automation platform while combining the robotic process automation (RPA) solution. UiPath Inc. (NYSE: PATH) has over 8,500 customers located worldwide.
UiPath Inc. (NYSE: PATH) went public on April 21, 2021, and raised $1.34 billion. The shares of the company started selling at $56 per share on its first trading day, compared with its expected price of $52 per share. The IPO of UiPath Inc. (NYSE: PATH) will be the third-biggest for U.S. software company, following Snowflake Inc. (NYSE: SNOW) and a Utah-based software company, Qualtrics. In Q2 2021, UiPath Inc. (NYSE: PATH) posted an EPS of $0.02, beating the consensus by $0.07. The revenue also presented a 64% year-over-year growth at $186.2 million. In June, BMO capital lifted its price target on UiPath Inc. (NYSE: PATH) to $85, with a ‘Market Perform’ rating on the shares.
As of Q2 2021, 46 hedge funds tracked by Insider Monkey have positions in UiPath Inc. (NYSE: PATH), worth $3.45 billion.
ClearBridge Investments released its Q2 2021 investor letter and mentioned UiPath Inc. (NYSE: PATH) in it. Here is what the firm has to say:
“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”
2. Airbnb, Inc. (NASDAQ: ABNB)
IPO date: December 9, 2020
Number of Hedge Fund Holders: 58
Airbnb, Inc. (NASDAQ: ABNB) is a vacation rental company that facilitates an online marketplace for lodging and tourism activities. The company has over 4 million Hosts who have accommodated more than 900 million guests in 220 countries. Airbnb, Inc. (NASDAQ: ABNB) ranks second on our list of the best IPO stocks to buy now.
Airbnb, Inc. (NASDAQ: ABNB) had a solid IPO on December 9, 2020, raising $3.5 billion. Shares of the company opened trading at $146 per share, doubling the original price of $68 per share. The company faced speculations by analysts about its timing to go public when the world is caught in the vortex of the health crisis. The CEO of Airbnb, Inc. (NASDAQ: ABNB) shed light on the company’s ways to shape travel plans due to the remote work policy, allowing people to travel anytime. In Q2 2021, Airbnb, Inc. (NASDAQ: ABNB) posted a gross booking value of $13.4 billion versus the estimates of $11.2 billion. Recently, HSBC lifted its price target on the stock to $219, with a ‘Buy’ rating on the shares. Airbnb, Inc. (NASDAQ: ABNB) has delivered a 10.7% return since its IPO.
Of the 873 hedge funds tracked by Insider Monkey, 58 funds have positions in Airbnb, Inc. (NASDAQ: ABNB), up from 52 in the previous quarter. These stakes are valued at over $2.7 billion.
Worm Capital LLC recently released its second-quarter 2021 investor letter and mentioned Airbnb, Inc. (NASDAQ: ABNB). Here is what the firm has to say:
“Throughout the quarter, you may have noticed that we averaged into a significant position in Airbnb (ABNB). Though the stock has been a relative underperformer since its February highs, we are highly confident about the company’s prospects and its ability to generate meaningful compounded returns over time.
Some history: We have been following Airbnb’s journey for several years, long before the company went public earlier this year. (In fact, nine years ago, in November 2012, Eric profiled the company for Inc.: “Airbnb Is Changing Travel.”)
Whenever we underwrite a new investment, we look for a few key attributes that help us determine the potential long-term value of a business, as well as its risks. In particular, we focus on management (Are they founders? Do they have skin the game? Are they playing the long game?), addressable market size (How big is the opportunity?), its relative growth and creativity to expand (Are they constantly innovating to make the product better for their customers?), margin expansion (Where can we find operating leverage in the model?), its status in the industry (Are they the dominant player? Can they take market share from incumbents?), business risks (What are we missing? Are customers dissatisfied? What do employees say?) and probably a dozen more elements that are critical to our process. It’s only then do we take out the pencils do the valuation work.
In short, ABNB fulfills pretty much every element of a business model we’re attracted to: First, it’s highly scalable marketplace-based business model that unites buyer and seller with observable flywheel effects. (This is an important observation, in that the platform creates significant economic value for millions of hosts who rely on Airbnb, which in turn attracts new hosts who identify the opportunity, which creates more inventory, which turn attracts more travelers, which attracts more hosts, and soon.) Second, it has a global focus with significant opportunities to expand its operating leverage; Third, its management—which is still founder-led—stands out to us as long-term thinkers capable of handling crisis, which the team demonstrated throughout the pandemic by dropping operating costs and turning the business into a more efficient, lean organization. (Like Churchill said: “Never let a good crisis go to waste.”)..”
1. Snowflake Inc. (NYSE: SNOW)
IPO Date: September 16, 2020
Number of Hedge Fund Holders: 70
Snowflake Inc. (NYSE: SNOW) tops our list of the best IPO stocks to buy now. It is a cloud platform that enables different organizations to mobilize their data with the company’s Data Cloud. Through the company’s software, the users can experience faster and easier processes of data storage, processing, and analytic solutions. Snowflake Inc. (NYSE: SNOW) has over 4,900 customers located worldwide.
In September 2020, Snowflake Inc. (NYSE: SNOW) raised over $3 billion in its IPO. The company went public at $120 and reached up to $300 on its first trading day, becoming the first company to double in value on its opening day. Snowflake Inc. (NYSE: SNOW) has a market capitalization of $88.1 billion. In Q2 2021, the company generated revenue of $272.2 million, presenting a 104% year-over-year growth. In August, Cowen lifted its price target on Snowflake Inc. (NYSE: SNOW) to $335, with an ‘Outperform’ rating on the shares. The firm appreciated the company’s strength across all the segments. Snowflake Inc. (NYSE: SNOW) gained 24.05% since its IPO.
As of Q2 2021, 70 hedge funds tracked by Insider Monkey have positions in Snowflake Inc. (NYSE: SNOW), worth $12.5 billion. Altimeter Capital Management is the company’s leading shareholder, with shares worth over $6.03 billion.
RiverPark Funds released its Q1 2021 investor letter and mentioned Snowflake Inc. (NYSE: SNOW) in it. Here is what the firm has to say:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and with the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings ServiceNow.”
You can also take a look at 15 Largest Global IPOs of All Time and 15 Biggest IPOs of 2020.
