It’s turning out to be a standout year for IPOs. Granted, there have been some duds, including deals that have lost more than half their value. But this is the case with any IPO market, as these deals can be fairly risky.
Yet for 2019 we have seen mega deals — such as Uber (NYSE:UBER) — as well as a myriad of huge gainers like Beyond Meat (NASDAQ:BYND), Zoom Video Communications (NASDAQ:ZM) and Shockwave Medical (NASDAQ:SWAV).
OK then, for those interested in this part of the market, how do you track upcoming IPOs? Well, we are going to help out. At InvestorPlace.com, we are launching a new monthly column on IPOs to watch. It will be a convenient way to get a sense of what to expect.
As for this month, there are six interesting upcoming IPOs. So let’s take a look at each:
Upcoming IPOs: Health Catalyst
Health Catalyst is focused on significantly reducing the waste and inefficiencies in the healthcare system. To do this, the company has built a sophisticated platform that ingests large amounts of data and leverages analytics and machine learning. Health Catalysts also has a team of domain experts and data scientists that help customers to successfully implement and use the technology.
Last year, total revenues went from $73.1 million to $112.6 million. There are currently 126 customers, including Allina Health, Children’s Hospital of Orange County, Community Health Network and UPMC.
The Health Catalyst platform has resulted in major savings for customers. For example, in the case of Allina Health, they have realized up to $125 million in a given year.
Regarding the Health Catalyst IPO, the company plans to issue 6 million shares at a range of $20 to $23 and the lead underwriters include Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and William Blair. The company will list on the Nasdaq under the symbol HCAT.
Unfortunately, in 2014 about 147 million adults in the U.S. suffered from one chronic condition — and 40% of those had two or more. And the trend is only getting worse.
But Livongo Health is working on innovative approaches to deal with the challenges and problems. At first, the company started with diabetes (which affects more than 30 million Americans) by offering a cellular-connected meter that tests materials, provides real-time coaching and offers 24/7 monitoring. From here, Livongo Health has gone onto other categories like hypertension, prediabetes and weight management. The diabetes business remains the largest, however, with 192,000 members.
What’s more, growth has certainly been robust. Last year, revenues spiked by 112% to $68.4 million.
For the upcoming IPO — which will be listed on the Nasdaq under the ticker of LVGO — Livongo Health expects to sell 10.7 million shares at a range of $24 to $26 and the lead underwriters include Morgan Stanley (NYSE:MS), Goldman Sachs and JPMorgan.
Founded in 2009, ProSight Global is a next-generation specialty insurance company. The company, which has the backing of Goldman Sachs and TPG, has built a platform that has a direct connection with its customers. This has provided a better experience and unique product offerings.
Note that there are nine customer segments: Media and Entertainment, Real Estate, Professional Services, Transportation, Construction, Consumer Services, Marine, Professional Employer Organizations and Energy. Also the focus is primarily on small- and medium-sized businesses.
In 2018, the company wrote $895.1 million in gross written premiums and the stockholders’ equity was $389.8 million. There was also an 82.6% premium renewal retention.
Regarding the ProSight Global public offering, the company expects to sell 8.8 million shares at a range of $16 to $18 and the lead underwriters include Goldman Sachs, Barclays and BofA Merrill Lynch (NYSE:BAC). The company expects to list its shares on the NYSE under the symbol of PROS.
Sunnova Energy International
Sunnova Energy International is a residential solar and energy storage service provider. According to the company, a main differentiation is that it relies on local dealers to originate, design and install the systems. There are more than 63,000 customers in the U.S., with about 455 megawatts of generation capacity.
The company is relatively young, having been founded in 2013. And yes, growth has been strong as revenues last year jumped by 37% to $104 million. Yet losses remain high at $74.2 million.
The company’s shares will be listed on the NYSE under the symbol of NOVA. The expectation is to offer 17.6 million shares at a range of $16 to $18. As for the underwriters, they include BofA Merrill Lynch, JPMorgan, Goldman Sachs and Credit Suisse (NYSE:CS).
Vista Oil & Gas
Vista Oil & Gas is engaged mostly in the exploration and production of oil and gas. The company also has operations across two countries: Argentina and Mexico. In fact, Vista Oil & Gas is a public company in Mexico.
For this year, the plan is to drill with a total of 34 wells. There will also be continued heavy investments, up to $300 million, so as to obtain a target production of 65,000 barrels of oil equivalent per day by 2022.
Regarding the IPO, it will involve the issuance of 10 million shares at $9.46 (the security will be an American depositary share) and the shares will be listed on the NYSE under the symbol VIST. The lead underwriters are: Citi (NYSE:C), Credit Suisse, Itau BBA, Morgan Stanley and Santander.
Wanda Sports Group
Wanda Sports Group operates an events, media and marketing business in China. For example, the company is the largest operator of events for triathlons, mountain biking and running. It has also been investing aggressively in digital technologies, such as to capitalize on its rich trove of data.
From 2016 to 2018, revenues have increased from €877.2 million to €1.1 billion. There was also a €54.0 million profit last year.
Consider that the global sports media and events market is expected to grow at a respectable pace, from €179 billion in 2018 to €224 billion in 2022. Although, the growth tends to be higher on even years due to the FIFA World Cup, the UEFA EURO football events and the Olympic Games.
The shares of the Wanda Sports Group are expected to list on the Nasdaq under the symbol WSG. The plan is to sell 33.3 million ADSs at a range of $12 to $15. What’s more, the lead underwriters include Morgan Stanley, Deutsche Bank (NYSE:DB) and Citi.
What Is an IPO?
For many people, IPOs are kind of a mystery. After all, it does seem kind of strange for a company’s stock to zoom on the first day of trading, right?
So here’s a quick explanation of IPOs. An IPO is when a company issues its shares to the public on an exchange, such as the Nasdaq or NYSE. Often this process results in raising a large amount of money, say over $100 million.
Getting to this point is not easy. A company needs to have audited books, a strong financial infrastructure and an experienced management team. There will also need to be advisors — called investment bankers or underwriters — who will provide the guidance through the process. This involves putting together a disclosure document, called an S-1 (which you can download at sec.gov), and having a roadshow, in which management makes presentations to investors.
The advisors will generally undervalue the shares, allowing for the pop. It’s a way to reward investors. Yet these investors are usually institutions, hedge funds and wealthy people.
Yes, it’s kind of unfair, but the system has seen little change over the decades. Despite this, individual investors have still made lots of money from IPOs — such as from Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Facebook (NASDAQ:FB) – regardless if they got the shares at the offering price.
Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.