Ruckus Wireless (NYSE:RKUS), which provides gear for Wi-Fi installations, finished Monday with yet another continuation of its post-IPO rally thanks to a positive analyst report.
RKUS got got off to a horrible start when it went public in mid-November; it priced at $15, but ended the day at $12.25. Since then, Ruckus has rebounded by more than 50%, including a final jump of nearly 8% Monday.
Powering the push was Lazard (NYSE:LAZ) analyst Ryan Hutchinson, who initiated coverage on Ruckus with a “buy” rating and a target of $23.
His rationale is reasonable: The growth in smartphones and tablets will drive strong demand for Wi-Fi.
The company noted the powerful industry dynamics in its IPO prospectus. According to Infonetics Research, the market for Wi-Fi solutions is forecast to skyrocket from $296 million in 2011 to $2.8 billion in 2016 — a roughly 57% compound annual growth rate.
Ruckus is already benefiting nicely from the megatrend; during the past nine months, RKUS’ revenues have almost doubled to $152.5 million, and went from breakeven to earning $7.4 million.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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