Wearable defibrillator maker Kestra surges almost 30% on debut trading day

Shares of Kestra Medical Technologies, a small-cap maker of wearable defibrillators, soared more than 28% yesterday, March 6, its first day of trading as a public stock. Amid high demand for the company’s shares in the IPO, Kestra ended up offering more shares and at a higher price than initially planned.

Yesterday, Kestra surged over 28% to $21.84 per share, which brought the company’s market capitalization to just over $1 billion by the end of the day. Before the opening bell today, however, shares edged lower, declining 2.7% to $21.26 per share in the first hour of trading.

Freedom Finance Global analyst Alem Bektemirov values Kestra at $20.40 per share in his base case and $23.40 per share in his optimistic case. Following the IPO, the stock is already trading above the base case and is just 2% off the optimistic case.

Demand for Kestra shares was high from the outset. When the IPO was announced in late February, the company initially planned to sell 10 million shares at a price range of $14-16 per share, with underwriters granted the option to purchase an additional 1.5 million shares. However, thanks to strong interest, Kestra revised its offer. Ultimately, the company issued nearly 11.9 million shares at $17 each, raising $202 million before expenses. Underwriters were granted the option to purchase an additional 1.78 million shares.

Kestra develops wearable medical devices that protect cardiac patients. According to the company, sudden cardiac arrest claims 475,000 lives annually in the U.S. Its flagship product, ASSURE, consists of a wearable defibrillator, a mobile app, and a remote patient data platform. It monitors patients, detects arrhythmias, and administers shocks when needed.

So far, Kestra has not turned a profit. For the six months ending October 31, 2024, the company reported a net loss of $40.9 million on revenue of $27.5 million.