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Boingo Wireless [proposed ticker (NASDAQ:WIFI)] is scheduling a $75 million IPO with a market capitalization of $423 million at a price range mid-point of $13 for Wednesday May 4, 2011. The IPO calendar includes seven others for this week.

SUMMARY -- Based in Los Angeles, Calif., WIFI provides 211,000 Wi-Fi locations (hotspots) in over 100 countries. Revenue increased 21% to $80 million for 2010 from $66 million in 2009. Profits were up 258% after adjusting (eliminating) a $10 million tax credit.

CONCLUSION -- Because WIFI provides the world's largest commercial Wi-Fi network, the IPO is "in demand" so you should try to get stock on the IPO, even though it is priced at 98 times adjusted 2010 earnings.

Be careful buying in the after market for several reasons, among them:

  1. Top line revenue growth should have been higher than 21% for 2010 compared to 2009, because WIFI's target market includes smartphones. And the December quarter was only slightly profitable, excluding the $10 million tax credit.
  2. Future growth may be impacted by increasing competition including T-Mobile, Cablevision (NYSE:CVC), Comcast (NASDAQ:CMCSA) and local operators, who have targeted WIFI's market.

WIFI Valuation Metrics

BUSINESS -- WIFI provides the world's largest commercial Wi-Fi network, consisting of over 211,000 Wi-Fi locations, or hotspots, in over 100 countries at venues such as airports, hotels, coffee shops, shopping malls, arenas, stadiums and quick service restaurants.

WIFI's solution includes easy-to-use software for Wi-Fi enabled devices such as smartphones, laptops and tablet computers, and WIFI's sophisticated back-end system infrastructure that detects and enables one-click access to its extensive global Wi-Fi network

COMPETITION -- Many of the competitors are also partners and include a variety of telecom operators and network operators, such as T-Mobile, Cablevision, Comcast and local operators.

WIFI relies on several of competitors as partners in roaming agreements. If WIFI's telecom partners decide to terminate WIFI's roaming agreements, then WIFI's network of Wi-Fi hotspots may be reduced, which may result in a significant disruption to the business.

USE OF PROCEEDS -- $41mm sale of 3.8mm shares for working capital and other general corporate purposes. Shareholders intend to sell 1.9mm shares.

Source: IPO Preview: Boingo Wireless