We recently published a list of the 12 Best IPO Stocks to Buy in 2025. In this article, we are going to take a look at where Loar Holdings Inc. (NYSE:LOAR) stands against other best IPO stocks to buy in 2025.
On February 25, Hamilton Lane co-CEO Erik Hirsch joined ‘Closing Bell Overtime’ on CNBC to discuss the developments that currently hinder the IPO pipeline. Erik Hirsch noted that there are two competing factors at play. On one side, there is general market uncertainty, which is currently the dominant issue. While on the other side, there are positive factors: many high-quality businesses in private markets are ready for an exit. They are mature, cash flow positive, and growing. The IPO market is the logical conclusion for them, and the public markets need more new names to reduce concentration in a few technology businesses. For the public markets to be healthy, they need fresh blood.
Hirsch believes the IPO market can have a good year without relying solely on software. There is room for more software companies, but there is also interest in traditional non-tech businesses to balance market weightings. He identified sectors that could see growth, such as manufacturing, which could benefit from reshoring and reinvestment in the US. The food supply chain and healthcare are also expected to benefit from administrative changes. Regarding President Trump’s positioning on tariffs, Hirsch thinks it is more about negotiating tactics than actual tariffs. If negotiations cease and tariffs become the focus, there will likely be a market reaction. The uncertainty extends to government job cuts, with questions about the scale of reductions and where displaced workers will go. Despite some positive signs for certain sectors and businesses ready for IPOs, market uncertainty, and regulatory changes are holding back the IPO market and dealmaking. The environment of unpredictability makes it challenging for companies to pursue IPOs or M&A deals at present.
Still, the IPO market holds promise due to a strong backlog of mature and high-quality private businesses eager for public exits.
Our Methodology
We used the Finviz stock screener to compile a list of the top companies that went public in the last 2 years. We then selected 12 stocks with high analysts’ upside potential that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician inspecting a commercial jet engine in a specialized testing facility.
Loar Holdings Inc. (NYSE:LOAR)
Average Upside Potential as of March 21: 42.18%
Number of Hedge Fund Holders: 32
Loar Holdings Inc. (NYSE:LOAR) designs, manufactures and markets a range of aerospace and defense components for various aircraft and systems. It serves commercial, business, and defense markets. Its product portfolio includes everything from structural components to advanced avionics systems.
In Q3 2024, the company’s net sales surged to $103.5 million, which was a 25% year-over-year improvement. The company is capitalizing on strong growth in both commercial and defense sectors. One of its strongest segments includes the aerospace and defense components segment. For 2025, Loar Holdings Inc. (NYSE:LOAR) forecasts net sales of $470 to $480 million. The company anticipates a net income of between $55 and $60 million in 2025.
Loar Holdings Inc. (NYSE:LOAR) is actively expanding through acquisitions, which includes the planned purchase of LMB Fans & Motors for €365 million. This will broaden the company’s specialized aerospace and defense component portfolio and is expected to close in Q3 2025.
Loar Holdings Inc. (NYSE:LOAR) has been delivering strong financial results and positive growth forecasts, which contributes significantly to TimesSquare Capital U.S. Small Cap Growth Strategy’s performance. Here’s what it said regarding the company in its Q3 2024 investor letter:
“Many of our Industrials positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. Providing a 40% lift was Loar Holdings Inc. (NYSE:LOAR), a diversified manufacturer and supplier of niche aerospace and defense components. We first added Loar to the strategy on its IPO in April and continued building the position early this quarter. Later, Loar reported higher-than-anticipated revenues and earnings, then boosted its guidance for the rest of the year. Loar forecasted increased growth for all three of its end-markets: aerospace original equipment, aftermarket, and defense.”
Overall, LOAR ranks 9th on our list of the best IPO stocks to buy in 2025. While we acknowledge the growth potential of LOAR, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LOAR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
