Investors jumped on CyberSource (Nasdaq: CYBS) Monday morning and ran shares up 20 percent to a high of 37 7/16. Bullish coverage of the developer of real-time e-commerce transaction services was initiated Monday by the four firms that served as underwriters when the company went public last month.
CE Unterberg Towbin initiated coverage at "strong Buy," JP Morgan at "buy," PaineWebber at "buy," and lead underwriter Merrill Lynch at "near term accumulate, long-term buy."
The company made a mediocre debut, gaining 23 percent in its June 24 IPO.
James Preissler, of PaineWebber who rated stock a "buy," also set a $55 price target for the stock. "E-commerce is estimated to be a $1,300 billion market by 2003 with approximately 13 billion transactions. CyberSource is poised to capture a significant portion of this revenue opportunity," Preissler gushed in his report.
The company generates revenue from installations of its software, and transaction processing. Preissler estimates revenues of $2.2 million for the second quarter of 1999 on expenses of $7.4 million for an EPS estimated loss of 45 cents a share. PaineWebber's model also predicts revenue of $10.5 million for 1999 and $21.1 million for 2000, up 100 percent. Expenses are expected to grow from $28.6 million in 1999 to $41.4 million "as CyberSource continues to develop and market its products and services," accordong to the report.
Shares had slowed down 5 5/8 to 35 5/8 by mid morning.