IPO analysis example

Before IPO investment, it’s imperative to check its performance of the company in the long-term . Watch out especially if the company’s revenues have increased all of a sudden before the IPO. If the company has been growing decently over the years, in all likelihood, it’s a good firm.

Strong demand for the company will lead to a higher stock price. In addition to the demand for a company’s shares, there are several other factors that determine an IPO valuation, including industry comparables, growth prospects, and the story of a company .

You shouldn’t invest in an IPO just because the company is garnering positive attention . Extreme valuations may imply that the risk and reward of the investment is not favorable at the current price levels. Investors should keep in mind a company issuing an IPO lacks a proven track record of operating publicly.