2019 has been a rough year for initial public offerings (IPO) for a few reasons. Most notably, the WeWork debacle brought an increased level of skepticism, depressing valuations. Valuations for companies relying on itinerant labor were also depressed for companies that just IPO'd like Uber
2019 has certainly been a great year for stocks, however, equity gains have been largely powered by falling interest rates, economic growth outperforming against recessionary expectations, and dovish monetary policy until October. This is in contrast to market action since October when yields are moving higher, the yield curve is steepening, and risk appetites are soaring. This type of environment is much friendlier to IPOs, and investors are more willing to pay higher multiples.
TradeWeb
The best performing IPO of the year is Tradeweb
In part, Tradeweb's an early success and rich valuation are due to its potential for recurring revenue. Once the company builds the electronic system, it is contracted to continue maintaining and operating it. When clients are in the ecosystem, it will naturally lead to more opportunities for revenue growth.
Avantor
Avantor
Peleton
Despite becoming a national punchline in recent days due to an advertising misfire, Peleton
Peleton is in between a streaming subscription, exercise equipment manufacturer, and high-end customer experience. It's questionable whether the company can continue to grow and execute to justify its valuation. It currently has an $8.3 billion valuation and $1 billion in sales with a 100% quarterly growth rate. It's unprofitable as it pours money into growth and looking to continue making money on subscriptions to its video library.