Telecommunications clearinghouse company NeuStar Inc. earned a solid debut on Wall Street June 29 as its share price rose from its initial pricing of $22 per share to as high as $26.50 per share. The company scored about $600 million in proceeds.
The company’s shares were hovering at around $25.52 per share in mid-day trading Thursday. It issued 27.5 million shares.
NeuStar stores the phone numbers and area codes for telecommunications companies, including wireless carriers. The company also manages the .us and .biz Internet domains, as well as common short codes for the wireless industry. Short codes are five-digit numbers to which mobile-phone users can send text message and receive content and information.
NeuStar reported revenues of $165 million last year and a net income of $45 million. The company has about $7 million in debt.
Pacific Growth Equities initiated coverage of NeuStar with an overweight rating. The firm said it expects NeuStar to post revenues of around $230 million and earnings per share of 65 cents this year. Next year, the firm said those numbers could increase to $310 million and 94 cents per share, respectively.
“We view NeuStar as a unique provider of vital services to the telecommunications services industry,” the firm wrote in a research note. “The company’s offering targets some of the fastest-growing applications in the industry such as VoIP, wireless communications, number portability and IP traffic exchange.”
However, NeuStar was one of the few to enjoy the IPO market, according to a report from Thomson Venture Economics and the National Venture Capital Association. Ten venture-backed companies raised $714.1 million in the second quarter, a decrease in value from the first quarter when 10 venture-backed companies raised $720.7 million on the U.S. public markets. The report said it is the lowest total offer amount since the second quarter of 2003.
