Money managers trying to prevent portfolio explosions ought to tread carefully near

Vivid Technologies

(VVID:Nasdaq).

The Woburn, Mass.-based company, which went public Wednesday, makes sophisticated inspection equipment that checks airline luggage for hidden bombs. The company has benefited from increased security at airports around the world, but analysts say Vivid remains too dependent on a single client and hasn't gotten approval in the world's largest market ¿ the U.S.

After being priced at $12-a-share late Tuesday, Vivid finished the session unchanged. IPO analysts had predicted that Vivid would likely edge higher on its first day of trading.

But analysts may have underestimated the intensifying scrutiny surrounding recent IPOs. Vivid does boast solid revenue growth. Revenue has more than tripled to $15.6 million in the last five years. But nearly 80% of those revenues come from the British Airport Authority, which plans to complete outfitting U.K. terminals with scanners by the end of next year.

If the company's technology, which X-rays travelers' bags twice, hasn't gotten the Federal Aviation Administration's imprimatur by that time, Vivid might have trouble maintaining its growth rate.

"In the U.S., the FAA is still looking into other technologies," said Steven Tuen, an analyst at

IPO Value Monitor

. "And it looks like a competitor has the upper hand."

Among the competitors:

InVision Technologies

(INVN:Nasdaq). The Foster City, Calif.-based company was the first to receive FAA approval for such a scanning device and was mentioned by name in a Clinton Administration proposal to boost airport security in the wake of the Trans World Airlines 800 tragedy.

With the most extensive airport network of any country in the world, the U.S. market is crucial for any airport bomb-detection company. In 1996, only 5% of the company's total sales were to American airports.

Lehman Brothers

was the deal's lead underwriter, with

Cowen & Co.

and

Needham & Co.

also in on the deal.

By Andrew Morse