Everything You Need to Know About the Privia Health Group IPO

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Dennis Hammer is a writer and finance nerd with six years of investing experience. He writes about personal finance for Wealthsimple. Dennis also manages his own investment portfolio and has funded several businesses in the past. Dennis holds a Bachelor's degree from the University of Connecticut.

There’s a lot of chatter in the healthcare industry about Privia Health Group’s recent IPO. If you like to invest in healthcare stocks, this one is worth watching. In this article, we’ll explain what Privia Health Group is, why investors like it, and how to buy shares.

What is Privia Health?

Privia Health is a Virginia-based physician enablement company. They provide technology and services to medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering quality care. Their goal is to reduce administrative burdens using technology and accelerate physician’s transition to value-based care.

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Currently, Private Health partners with 2,700 providers across six states and the District of Columbia. They provide care to more than 3 million patients. About 680,000 patients are cared for through “value-based arrangements,” which refers to a system that rewards hospitals and phsycians for postive patient health outcomes.

What is Privia Health’s current market cap?

As of May, 2021, Privia Health’s market cap is $3.5 billion. A company’s market cap is the total dollar value of a company’s outstanding shares, including all shares owned by company officials, private investors, and stockholders. We use market cap as a reasonable way to gauge the value of a company’s stock.

When is the Privia Health IPO taking place?

Privia Health’s IPO took place on April 29, 2021, under the ticker symbol PRVA. This is when it became open for trading on the Nasdaq to the general public. It’s offering price was $32 per share, but it rose to $34.75 by the end of the first day.

Why are people interested in buying Privia Health shares?

Privia Health is a hot stock because its mission addresses two serious health care problems: high cost and low quality. Their goal is to help physicians switch to a value-based arrangement that ties pay to health outcomes, not the volume of health care.

Investors like Privia Health because it’s poised for big growth. The physician enablement market is worth $1.9 trillion at the moment and expected to grow to $3.5 trillion by 2030. The market is still young, which gives Privia an advantage.

Professional investors like Privia, as well. The company raised $417.5 million in venture-backed and private equity funding since its founding in 2007 from investors like Goldman Sachs, Health Enterprise Partners, and Oxeon Partners.

Most importantly, Privia is loved by investors because it’s especially profitable. Net income tripled to $30.9 million in 2020 from $7.9 million in 2019. They also have very little debt—$35 million—on its balance sheet.

How can I buy shares of Privia Health?

Now that Privia Health’s IPO has happened, you can currently purchase shares. The following are the four steps you should take to purchase shares of Privia Health.

Step 1: Open a brokerage account

Before you can buy and sell stocks, you will first need to open a trading account with a brokerage that accepts retail investors. If you already have an account with a brokerage (like Wealthsimple) you can use it to purchase shares of Privia health.

If you are looking for a brokerage, we recommend choosing one with low commissions and a simple fee structure. It’s important to understand exactly what you will pay for each transaction, if anything at all.

You should also choose a broker that provides you with an easy-to-use trading platform. While information is valuable, some platforms overwhelm cusotmers with data.

Finally, it’s best to choose a brokerage that gives you access to a wide range of securities and financial products. After you purchase shares of Privia Health, you may decide to expand your investment portfolio in two other companies for investment vehicles.

Once your account is open, the brokerage will ask you to fund it with a deposit. You’ll use this fund to purchase stocks and other securities.

Step 2: Decide how many shares you want

Before you make your first purchase of Privia Health, you’ll need to decide how many shares you’d like to buy. You can determine this number based on the amount you’re willing to invest.

Fortunately, the calculation is simple. Divide the total amount you want to invest by the current share price. For example, if the price is $30 a share and you want to invest $2,500, you can purchase 83 shares ($2,500 / $30 = 83.33).

Keep in mind, however, that purchasing shares of Privia Health comes with risk. We hope the share price will increase so that your investment grows, but there is always a chance that it will fall. Never invest more money than you can afford to lose. It’s important to diversify your portfolio with different kinds of securities to reduce the risk of losing everything.

Step 3: Choose your order type

When it comes to purchasing shares of a stock, you have a couple options. You’ll need to choose an order type before the brokerage can process your transaction. You have two options:

Market order: This is an order to trade the stock at the current price when the order reaches the exchange. Once you submit the order, you’ll pay the price at the moment of execution. This might be higher or lower than you expected, though popular stocks tend to execute close to the order price. (We can’t guarantee that, however.)

Here’s a market order example: Privia Health costs $25 a share. After placing a market order, you’ll pay something close to $25 with a possible slight variation. The benefit, however, is that you get your shares right away.

Limit order: A limit order is an order to buy or sell a security at a specific price. The transaction only executes when it meets your criteria. Sales limit orders are executed at or above the limit price. Limit orders are executed at or below the limit price. Limit orders give you control over how much you spend, but you may have to wait to receive your shares (especially if your criteria is significantly different than the current price).

Here’s a limit order example: Privia Health costs $25 a share. If you place a limit order to purchase when shares fall to $20 a share, your order will only be fulfilled when the price falls to $20 or less. If you place a limit order to sell shares at $20, it will only be fulfilled if the price reaches $20 or more.

Step 4: Execute the trade

Your last step is to submit your order to your trading platform and execute the trade. Your broker will do the work for you by purchasing the shares, deducting the funds from your account, and making those shares available to you.

If your broker is unable to fulfill the order that day, it may leave the order open indefinitely or cancel the order when the markets close at the end of day. Check your broker’s terms to learn how they handle unfilled orders.

Last Updated May 31, 2021

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