Though Reddit (NYSE:RDDT) may have been the most recent big-name IPO, the initial listings market is still cooking, and undervalued IPO stocks abound. The last undervalued IPO stock I picked at the beginning of June, Nano Nuclear Energy (NASDAQ:NNE), returned over 300% since I first noticed it, further proving that undervalued IPO stocks are out there if you know where to look.
In general, the wider IPO market is improving as the year’s first half saw 86 U.S.-based IPOs raise nearly $18 billion, a 12% and 67% improvement, respectively, compared to 2024’s first half. That does, of course, still pale compared to 2021’s shockingly high IPO rates that raised more than $450 globally, but still far better than last year as economic conditions soften. This, of course, benefits undervalued IPO stocks as many still shy away from their inherent “opening day” risk. These undervalued IPOs often fly under the radar as investors focus primarily on tech and mega-caps — but that doesn’t detract from their long-term upside.
Viking Holdings (VIK)
Viking Holdings (NYSE:VIK) is an undervalued IPO stock operating within a segment that’s been beaten down in recent years but is due for a resurgence: luxury cruising and passenger transport. The cruise liner stock accomplishes this with a fleet of almost 100 small, high-tech ships. Viking is the largest undervalued IPO stock on our list at a $14.35 billion market cap and the company’s shares jumped nearly 40% since first listing in May.
The company’s waterborne operations primarily focus on river boating, with 80 existing vessels and 18 more to be delivered in the next two years. But Viking is increasing its oceanic presence and will augment its existing nine seafaring ships with eight more by the end of the decade. Viking seeks to differentiate itself from most cruise liners, which emphasizes partying and ship-centric activities rather than destination arrival. A generally youth-skewing crowd says that “Vikings are contrarians, and hence, from the beginning, the vision has been to build a different cruise line.” This led Viking to emphasize “quiet, understated elegance” and a destination focus that targets older demographics of 55+.
Viking’s financials already point to a sector-wide turnaround, with revenue improving 14% year-over-year between the first quarters of 2024 and 2023. Expect these tailwinds to continue as the undervalued IPO stock sets sail.
Proficient Auto Logistics (PAL)
Proficient Auto Logistics (NASDAQ:PAL) operates within a logistics and transportation segment that’s nearly impossible to replace or substitute: vehicular transport, as in the type that brings cars from manufacturers to dealerships, ports and railyards. The company’s IPO is unique in that it was a merger of five existing companies under a single umbrella that went public, with shares climbing about 8% since the IPO.
Proficient Auto’s customer list is a who’s who of manufacturers and includes Tesla (NASDAQ:TSLA), General Motors (NYSE:GM), Stellantis (NYSE:STLA) and Rivian (NASDAQ:RIVN). Though some car manufacturers, like Tesla, prefer to vertically integrate their value chain as much as possible, logistics of this type tends to be a bridge too far from a pricing and resource management perspective, so Proficient Auto has plenty of business in its future.
Proficient saw its net deliveries slump in 2023 amid labor strikes at General Motors and Stellantis and generally reduced consumer interest in car purchases. But that downward trend is already reversing as the company’s total units delivered increased by 2% in this year’s first quarter report — expect that upward momentum to continue throughout the year as Proficient realizes synergies it created through combining multiple companies and generally improving its own internal processes.
KindlyMD (KDLY)
I want to first acknowledge that, among these undervalued IPO stocks, KindlyMD (NASDAQ:KDLY) trades firmly in penny stock territory at less than $3 per share and a meager $15 million market cap. However, its small size makes KindlyMD’s undervalued IPO prospects more appealing. The company operates at the forefront of two unique trends: medical cannabis, which is ready to boom, and holistic treatments that blend prescription medication, behavioral and mental therapy and alternative solutions that “treat the whole person, not just their symptoms.”
KindlyMD’s first earnings report came shortly after its IPO, and top-line numbers were considerably low at just $829,000 in revenue. But that slim sales stat is, practically speaking, a short-term hurdle toward long-term success. Specifically, KindlyMD hit a range of benchmarks that all but assure expansion and growth in the coming years. That includes becoming Utah’s first alternative medicine company to contract under the state’s insurance, including Medicare/Medicaid. It contracted with mega-insurer federation Blue Cross Blue Shield and secured 16% of Utah’s current total addressable medical cannabis market. Better yet, for cannabis stock enthusiasts, KindlyMD and Curaleaf (OTCMKTS:CURLF) started a collaboration to expand awareness of alternative treatment opportunities throughout Utah.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.