Briefing.Com doesn't like this one:
Updated: 03-May-99
12:30 ET******
MAPQUEST COM (MQST): Shares of New York City-based mapping service scheduled to be one of the first Internet-related IPOs to hit the market this week. Lead underwriter BancBoston Robertson Stephens, currently discussing bringing the deal out between $12 and $14, compared to original range of $10 to $12. Assuming deal prices at $14, MQST would carry a market-cap of $450 million and Price/Sales ratio of 18.2.... MQST is an online provider of mapping and destination information. The company was formed in 1967 as a business unit of printing company R.R. Donnelley & Sons. According to Media Metrix, Inc., in February 1999 mapquest.com had over 2.7 million unique visitors making it the number five travel/tourism Internet property in terms of audience reach... While the early paragraphs of company's prospectus suggest Internet pure-play, investors should be aware that MQST derives the vast majority of its revenue from non-Internet business. Where's The Growth: The relatively low P/S ratio (average Internet deal has recently been pricing upwards of 50 times trailing sales) can be attributed to MQST's lackluster growth.. For the fiscal year ended Dec. 31, company's total revenue rose to $24.72 million, an increase of just 15%. In 1997, revenue growth was even harder to come by, improving less than 10% from the fiscal year 1996 level. Operating loss narrowed from $7.6 mln to $3.2 mln. Gross margin for the 1998 period was 28.6%, flat with the year-ago level... With the media pushing MQST as an Internet deal, no question stock will soar from its IPO price. However, given sluggishness of growth, hard to imagine that institutional investors will hold stock with conviction. In Briefing.com's opinion, there are deals that are far more compelling out there. So unless trading stock for 1 or 2 point moves, would not waste time with MQST. |
