Casa System recovers from slow IPO start as shares pop 32%

Casa Systems Mobile World Congress booth
Casa Systems booth at Mobile World Congress in 2016. (Casa Systems)

Cable network virtualization vendor Casa Systems has seen its share price spike over 30% since its rock IPO was conducted on Dec. 15.

Shares for the cable network tech company closed at $19.04 in Wednesday Nasdaq trading. Casa initially had planned to conduct its IPO on Dec. 14, selling 8.4 million shares at $15 to $17 each. On weak demand, it scaled back those ambitions, doing the IPO a day later with 6 million shares priced at $13.

Andover, Massachusetts-based Casa closed trading on Dec. 15 at $14.40 a share, so its stock has shot up 32%. The vendor had been seeking to raise as much as $150 million through its initial public offering.

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RELATED: Casa Systems seeks to raise $150M with IPO

“As it turns out, the reduction in the IPO price has ended up rewarding Casa investors,” noted by Futuriom blogger R. Scott Raynovich. “Casa is now popping up on the screen of technology stocks that are performing well in 2018. With cable companies transforming their infrastructure to adapt to more services using virtualization techniques, Casa is an interesting new public company to watch.”

Casa also said it gets 36% of its revenue from legacy Time Warner Cable accounts, acquired last year by Charter Communications. Eleven percent of Casa’s revenue has come from Liberty Global. The company saw a 14% revenue spike in 2016 to $316.1 million, with profits increasing in its last full pre-IPO year by 31% to $88.7 million. 

According to its S-1 filing with the Securities Exchange Commission, Casa took in revenue of $233.6 million through the first three quarters of 2017, up 7.7% year over year, with a net income spike of 22% to $59.6 million. 

Casa founder, President and CEO Jerry Guo owns 15.9% of the company. 

“Casa's growth is underpinned by a structural shift in cable operators' network infrastructure, and we expect this transition to continue for a number of years as they evolve toward an all-IP based architecture and continue to upgrade their networks,” wrote Raymond James analyst Simon Leopold, initiating coverage of the tech company with an “outperform” rating.