IPOs get plenty of scrutiny, for the best of reasons. They are the beating heart and pulse of the stock market, bringing new stocks in, and the pace and quality of IPOs is frequently taken as a barometer of market health. This past quarter, 3Q26, has given us some mixed signals – although a generally healthy outlook.
To start with, the pace of new offerings has slowed; the 30 IPOs in Q3 marked a substantial drop from the 48 seen in 2Q26. At the same time, the third quarter generated $32.8 billion in total proceeds. Much as SpaceX heavily boosted the 2Q total, Q3 was dominated by Korea-listed SK Hynix’s $26.5 billion U.S. offering. Excluding that deal, Q3 proceeds were just $6.2 billion. Still, 18 of the quarter’s IPOs raised $100 million or more, suggesting investors remained willing to back sizable new offerings despite weaker conditions toward the end of September.
With that background in mind, we can see why Bank of America’s analysts are willing to put some of the ‘under the radar’ IPO stocks on the ‘Buy’ list. While AI and biotech remained common themes in the market, investor interest during Q3 showed a definite broadening. BofA’s picks reflect both themes.
We’ve opened the TipRanks database to get a closer look at a couple of the bank’s selections. Here’s a closer look at them, and at the Bank of America comments. Let’s find out just what makes them compelling choices today.
The first newly public stock we’ll look at here is Jersey Mike’s Subs, named for its founder and its home state. The company got its start back in the 1950s, and it is still based in New Jersey. Jersey Mike’s is a leader in the fast-casual franchise restaurant niche and boasts more than 3,300 locations in the US and Canada. The sub chain’s growth, since its start as a single neighborhood sandwich shop, has made it one of the fastest-growing fast-food restaurant brands in the US market.
A crowded market requires smart marketing, and Jersey Mike’s has used its ‘A Sub Above’ slogan to position itself as a leader in the field. The chain features a combination of authentic recipes and fresh-sliced meats and cheeses to give every customer a distinctive experience. The company’s commitment to quality earned it recognition last year as the “#1 Best Sandwich Chain in America.”
The company held its IPO at the end of this past July; JMKE shares started trading on July 30, and the offering closed on July 31. A total of 43,478,261 shares were made available, at a price of $23 per share. Of that total, 13,782,609 shares were sold directly by the company and the remainder were put up by existing shareholders. Jersey Mike’s stated that it intended to use the net proceeds from its own direct sale of stock to repay certain debts and to provide for general corporate purposes. The IPO raised gross proceeds of $1 billion.
Since the IPO, shares in JMKE have fallen by over 23%, with most of the drop coming after the September 9 release of the 2Q26 financial results, the firm’s first such release as a public company. Among the headwinds that hit the stock were concerns over the valuation – the market cap after the IPO hit as high as $7.3 billion, but now stands at $3.8 billion – and a year-over-year drop in net income, despite overall growth in total store numbers and sales.
When we look into the Q2 report, we see that Jersey Mike’s reported 2.3% growth in same-store sales. The company opened 83 new stores and reported an 8.1% year-over-year increase in net unit growth. Sales were up 10% year-over-year, systemwide, to reach $1.21 billion, and total revenue, at $208 million, was also up 10%. We should note, however, that the total revenue figure just missed the forecast, coming in $746K below expectations. The chain’s net income for Q2, at $37 million, was down sharply from the $59 million realized in the prior-year period.
Bank of America analyst Sara Senatore covers this restaurant chain and takes an upbeat view of the new stock. In her comments, she says, “Our Buy rating reflects Jersey Mike’s scaled 99% franchised model, broad share gains and long domestic runway. Consistent regional AUVs, a 1,600+ unit pipeline and 40%+ franchisee cash-on-cash returns provide visibility into continued unit growth, while recurring royalty, advertising fee and system support streams support high-margin earnings growth as the company scales toward management’s long-term global store opportunity.”
The analyst’s stated Buy rating comes along with a $29 price target, implying a one-year upside potential of 80%. (To watch Senatore’s track record, click here)
Overall, Wall Street has wasted little time forming an opinion since the IPO. With 20 Buy ratings against just 4 Holds, the fast-growing sandwich chain earns a Strong Buy consensus rating. At $16.09, the shares sit well below their $27.95 average price target, which points to ~74% upside over the coming 12 months. (See JMKE stock forecast)
The second stock to look at is a biomedical company, a sector that, along with AI, has been a large driver of IPO activity and interest in recent quarters. Apnimed is operating at the late clinical stage, and having completed the Phase 2 and Phase 3 trials of its leading drug candidate, it is now entering the regulatory submission stage and preparing its commercialization plans. The company focuses on the discovery and development of new drugs to address the neurobiology of obstructive sleep apnea (OSA) and other sleep-related breathing diseases. Apnimed’s portfolio is based around novel oral therapies, aiming to treat underlying causes of OSA.
Obstructive sleep apnea is a serious disorder that can cause a range of sleep problems, from poor-quality sleep to poor oxygenation. All of that has a serious effect on quality of life, and patients report issues with tossing, turning, and excessive snoring. Current treatments for OSA usually involve CPAP machines, which are effective but are also cumbersome and uncomfortable to wear.
Apnimed’s chief drug candidate, AD109, is a novel oral therapy, a single pill that targets the underlying neuromuscular dysfunction that can cause mild, moderate, and severe OSA conditions. In OSA, the neuromuscular defect causes the upper airway to collapse, forcing the patient to snore, gasp, or choke or cough for breath. By addressing that defect through a therapeutic agent, Apnimed helps prevent the airway collapse that defines sleep apnea and allows patients to get the restorative sleep they need.
AD109, as noted above, has been successfully moved through the Phase 2 and 3 clinical trials, and Apnimed has begun the regulatory submission process. The company has submitted the New Drug Application (NDA) to the Food and Drug Administration, and the FDA has set a PDUFA target action date of February 28, 2027. Apnimed has proposed the proprietary name of Oxnimbi for the new drug.
If approved, Oxnimbi has high potential for commercialization. The drug will be the first oral pharmaceutical treatment specifically designed to treat the root cause of upper airway collapse, bringing relief to millions of patients who deal with OSA every night.
In August of this year, Apnimed announced that its IPO had closed. The company successfully put 12,000,000 shares on the market, at $16 each. The underwriters exercised their full options to buy an additional 1.8 million shares. The IPO raised $220.8 million in total gross proceeds. The stock has been volatile since the IPO and is down approximately 14%. Much of that decline has been attributed to profit-taking after the initial share price rally.
For Bank of America’s Jason Gerberry, there are several reasons to buy in here, but the key point, at the end, is high potential for commercial sales. He says of APMD, “Our thesis rests on three factors: 1) a differentiated mechanism targeting the neuromuscular dysfunction underlying OSA versus PAP and obesity-directed GLP-1s; 2) positive Phase 3 data, including 34-44% AHI reductions, supporting a high probability of approval and potentially broad labeling across OSA severity; and 3) a large initial opportunity among ~10.5m diagnosed-but-untreated patients. We model nominal/risk-adjusted peak U.S. sales of ~$2bn/$1.7bn.”
Gerberry’s thesis supports a Buy rating on the stock, while his $41 price target suggests that APMD will appreciate by 88% in the coming year. (To watch Gerberry’s track record, click here)
All in all, APMD shares have picked up 4 analyst reviews since hitting the public markets, and those reviews are all positive – making the Strong Buy consensus rating unanimous. The stock’s selling price of $21.75 and average target price of $50.33 combine to give a robust one-year upside potential of 131%. (See APMD stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
