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The Short Answer

How to Spot a Bargain IPO

We take a look at the valuations of six prominent IPOs.

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Question: Is it a good idea to buy a company at its IPO? I've heard it's better to wait, but how long?

Answer: As you allude in your question, the oft-cited advice is to let the stock price "settle" after an initial public offering before taking the plunge; institutional investors' trading activity can cause an IPO stock to soar on its first day of trading, but this inflated price might not be sustainable. 

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.