Hot Sector, Hot Underwriter Should Fuel Inforte Flight

There are dozens of consulting firms offering to help clients integrate
Internet technology and e-commerce systems into their existing networks.
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

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.

Inforte has its share of the latter, counting among its clients Alcatel,
CompUSA, Intuit, Monsanto and Sun Microsystems.

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.

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