IPO Report: Rocket Fuel (FUEL)

Francis Gaskins |

FUEL is a technology company that has developed an Artificial Intelligence and Big Data-driven predictive modeling and automated decision-making platform.  The compound increase in top line revenue is one of the best we've seen.

FUEL is one of nine IPOs are scheduled for this week, 12 for next week. The full IPO calendar can be found at IPOpremium

FUEL is based in Redwood City, CA, and scheduled a $102 million IPO with a market capitalization of $829 million at a price range mid-point of $25.5, for Friday, September 20, 2013.

The S-1 was filed September 9, 2013.  Manager; Joint Managers: Credit Suisse; Citigroup.  Co-Managers: Needham; Oppenheimer; Piper Jaffray; BMO Capital; LUMA

Summary

 

2010 yr

2011 yr

2012 yr

June 6 mos '12

June 6 mos '13

Revenue % chg vs prior period

173%

138%

 

133%

Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing june 6 mos

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Rocket Fuel

$829

4.5

-46.0

6.5

6.5

12%

             

Accumulated deficit of -$35 million.

4.5 times annualized sales is low for a company with FUEL's top line revenue growth.

Glossary

Conclusion
Buy FUEL on the IPO.

Business
FUEL is a technology company that has developed an Artificial Intelligence and Big Data-driven predictive modeling and automated decision-making platform.

There are tens of billions of daily trades across all digital advertising exchanges, thousands of times more than the number of daily trades executed by NASDAQ and the NYSE combined.

FUEL's Artificial Intelligence, or AI, system autonomously purchases ad spots, or impressions, one at a time, on these exchanges to create portfolios of impressions designed to optimize the goals of advertisers, such as increased sales, heightened brand awareness and decreased cost per customer acquisition

Competition
FUEL competes with large, well-established companies such as Google, Facebook and Yahoo!, digital advertising networks, companies that offer demand-side platforms that allow advertisers to purchase inventory directly and manage their own customer data, divisions of certain advertising agencies, including agency trading desks, that place digital advertising on behalf of the agencies' clients, and other companies, many of which claim to use advanced technologies to optimize advertising campaigns.

Intellectual property
As of June 30, 2013, FUEL had filed five non-provisional patent applications in the United States and three Patent Cooperation Treaty applications..

Use of Proceeds
FUEL expects to net $90 million from its IPO. Proceeds are allocated to working capital and general corporate purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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