Hot Sector, Hot Underwriter Should Fuel Inforte Flight
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There are dozens of consulting firms offering to help clients integrate Internet technology and e-commerce systems into their existing networks. USWeb/CKS (USWB), Scient (SCNT), Viant (VIAN), US Interactive (USIT) - these are just some of the many Web consulting and design players battling for corporate customers.
Another one is Inforte, a Chicago-based firm that has priced 2 million shares at $32 each, with trading expected to begin Friday under the Nasdaq symbol INFT.
Given the flat week for Internet IPOs and its long list of competitors, Inforte's chances for a big first-day gain appear to be anything but certain.
Still, when the final trading bell rings later Friday (and assuming INFT debuts), don't be surprised to see Inforte's IPO streaking across the Wall Street sky. For while competition is stiff in the Web consulting and design space, high demand is giving these companies plenty of opportunity to rack up revenue and customer wins.
Like its many competitors, Inforte offers a range of services including Internet strategy and Web site development.
Inforte racked up $30.1 million in sales in fiscal 1999, along with a net profit of $3.8 million - its second straight year of profitability. Compared to Web consultants such as USWeb/CKS ($511 million) and Scient ($99 million), Inforte lags in total revenue. But growth is strong. Last year's revenue was 115% above 1998's total, while Q4 revenue of $9.6 million was 162 percent above the year-ago quarter.
Add in a marquee underwriter (Goldman Sachs), the relatively small number of shares being sold and the growing buzz around this offering (Inforte recently bumped up the price range to $30-$32 from $23-$25), and I think we're looking at a triple-digit closing price.