Time To Buy These Recent IPOs After Instacart's Day View?

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Investors will have the opportunity to get exposure to the market leader in online food delivery with Instacart also known as Maplebear (CART) having its debut on U.S stock exchanges today. Founded in 2012, the San Francisco-based company pushed back its IPO after recessionary fears crippled markets last year.

Still, Maplebear’s stock opened at $42 a share before ending today’s trading session at $34.40 and 14% above its IPO price of $30 per share. The IPO raised $660 million with Maplebear’s valuation coming in at around $10 billion.

This comes after UK chipmaker Arm Holdings (ARM)  saw its stock pop 20% in its IPO last Friday. Since then, Arm Holding’s stock has dipped in the last 3 trading sessions falling more than -10% but still +8% above its IPO price of $51 a share.  

Investors may be wondering where the opportunity lies among recent IPOs as analyst and research firms work to complete their financial estimates for Maplebear and Arm Holdings. In this regard, here is a look at a few top-rated stocks that also launched IPOs this year.

CAVA Group (CAVA)Launching its IPO in June, Cava Group’s stock is back at an attractive entry point after popping to highs of $58.10 a share in early August.

Currently at around $33 a share, Cava Group’s stock is still 51% above its IPO price of $22 per share with the popular Mediterranean-style restaurant chain founded in 2010 and initially valued at more than $2.4 billion upon its debut.

At the moment Cava Group’s stock sports a Zacks Rank #2 (Buy). To that point, Cava Group’s expansion appears to be on the horizon as the company opened 16 new restaurants during the second quarter with net sales up 62% to $172.89 million.

More impressive in its first quarterly report on August 15, Cava Group also posted earnings of $0.21 per share which largely eclipsed estimates that called for an adjusted loss of -$0.03 a share. Cava Group has a total of 279 restaurants and is seeing expansive sales growth that should eventually keep the company past the probability line and establish its earnings potential.

Zacks Investment Research

Image Source: Zacks Investment Research

Skyward Specialty Insurance Group (SKWD)Also sporting a Zacks Rank #2 (Buy), an insurance holding company Skyward Specialty Insurance Group’s stock is attractive as well. 

Skyward Specialty engages in underwriting commercial property and casualty insurance coverages in the United States with shares of SKWD trading 80% above its IPO price of $15 in January.

Holding on to lofty IPO gains is a rarity in a company’s first year of being publicly traded making Skyward Specialty’s stock standout at $27 a share. Notably, Skyward Specialty has surpassed top and bottom-line expectations in its first three quarterly reports.

Zacks Investment Research

Image Source: Zacks Investment Research

More Intriguing, Skyward Specialty is already profitable after being founded in 2007. Fiscal 2023 earnings are expected to dip -3% at $1.73 a share but rebound and soar 31% in FY24 at $2.27 per share. Total sales are forecasted to climb 30% this year and jump another 13% in FY24 to $942.13 million, making Skyward Specialty’s earnings potential more promising.

Zacks Investment Research

Image Source: Zacks Investment Research

Bottom Line

Following recessionary fears over the last year, a more active IPO market is certainly a good sign for stocks with Maplebear and Arm Holdings sparking investors' interest and hoping to follow Cava Group and Skyward Specialty in regards to holding on to IPO gains.

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