Cramer Backs Forgent Power as Biggest IPO, Notes 79% Stake and 27x Multiple
Jim Cramer called Forgent Power Solutions the biggest IPO of the year, praising its AI data center exposure and noting a 1.4 leverage ratio. He highlighted Neos’s 79% stake concentration and an enterprise multiple of 27 versus Vertiv’s 29.5, recommending a staggered buy.
1. Cramer’s Bullish Take
Jim Cramer labelled Forgent Power Solutions the largest IPO so far, highlighting its alignment with the AI data center buildout and robust post-IPO performance.
2. Ownership and Leverage
Forgent carries a conservative leverage ratio of 1.4, but faces potential pressure as private equity sponsor Neos holds roughly 79% of outstanding shares and may seek to sell down its position.
3. Valuation Comparison
On a forward-looking basis, Forgent’s enterprise multiple sits at 27, versus 29.5 for industrial peer Vertiv, suggesting Forgent trades at a discount to its closest competitor despite a premium market theme.
4. Investment Guidance
Cramer recommended purchasing half of a position immediately and the remainder after Forgent’s upcoming earnings report in two weeks, noting potential pullbacks or continued upside based on its performance narrative.