"It could be the best or worst of both worlds," said Rich Peterson, director of global markets intelligence at S&P Capital IQ."In terms of valuation, it could be one thing; in terms of potential, it could be another."
Hot Health-Care IPOs
Well over half of the new companies that have gone public in 2014 have been biotech firms—nearly two dozen, according to analysts at IPO research firm Renaissance Capital.
"This period has been the most active, profitable and highest-volume period we've ever seen for biotech in the last 20 years," said Kathleen Smith, chairwoman and co-founder of Renaissance Capital. "This is quite a wide-open window for biotech."
(Read more: Insurers scope out Obamacare enrollees)
Last year was also a strong period for biotech IPO activity, fueled by positive factors that continue to the drive health-care stocks, including a favorable regulatory environment for firms developing drugs for rare diseases and strong merger activity in the pharmaceutical and biotech sectors. As a result, the sector has outperformed the overall market.
"You have the S&P 500 health-care index up about 7.8 percent," said Peterson. "In terms of institutions, there's probably a demand for biotech and health-care offerings."
Strong returns have also helped drive interest. On average, the biotech IPOs have gained over 50 percent from their offering prices.
But Smith cautions that like Castlight, many of the firms going public have no earnings, and many retain large insider ownership after their debuts.
"Most of them are getting done because the venture capitalists and investors are buying their shares at the time of the IPO," she said. "Investors are looking at it as a sign of commitment, but that means that the float is low."
But that's not necessarily a red flag.
Winners and losers
GlycoMimetics was the year's first IPO. Just over half its shares outstanding are held by insiders. Yet shares of the biotech firm with a treatment for sickle cell disease in midstage development have been among the year's best gainers and have more than doubled from the $8 IPO price, on anticipation of upcoming trial results.
Insiders hold just 20 percent of Ultragenyx shares, the year's biggest gainer so far. The rare-disease drug developer saw shares double in its debut, after boosting its IPO, and have since tripled from its $21 offering price.
There also are a number of losers in the group. About a quarter of the new biotech IPOs are now trading below their offering price, including cancer diagnostic firm Biocept, kidney disease treatment developer NephroGenix and gene-therapy company uniQure.
In the pipeline
Castlight Health is just the first deal expected to garner a $1 billion valuation in its debut this year, with two private equity firms with longer track records expected to attract investor interest.
Medical device maker Biomet filed with the SEC last week to raise $100 million but is expected to garner at least $1 billion valuation, according to Renaissance Capital. Biomet was taken private just before the financial crisis for $11.4 billion by private equity investors including Blackstone and KKR.
(Read more: Big pharma warns on poppy shortage)
IMS Health, taken private for $5.2 billion, also filed for a $100 million IPO as a placeholder earlier this year. The health-care data-consulting firm was acquired in 2010 by TPG Capital, the Canada Pension Plan Investment Board and Leonard Green.
With the money raised from today's IPO, Castlight CEO Colella said the firm hopes to break even in the near future.
—By CNBC's Bertha Coombs. Follow her on Twitter