NEW YORK ( TheStreet -- Ubiquiti Networks ( UBNT) is looking to become the first company brave enough to go public since August.

The hyper volatility that stocks have endured the past few months has caused many companies to postpone offering plans or shelve them altogether. Another barrier has been the lackluster performance of the IPOs from earlier in the year, which is prompting investors to undertake a more critical review of the potentially public company.

That means what was perfectly acceptable in the past may no longer be the case. For example, a growth company that won't make money for another year might have been deemed worth the risk six months ago, but now the mood has turned against that story. According to Morningstar, the backlog of potential IPOs is the highest it's been in a decade with more than 200 companies in the pipeline.

Ubiquiti Networks, a provider of wireless networking equipment, is embarking on its IPO as a cash flow positive company with increasing sales and profits. The company focuses on underserved and underpenetrated markets. It doesn't just rely on the U.S. with 70% of its revenues coming from global markets in fiscal 2011. Many emerging countries can't afford to develop a fixed line infrastructure and must rely on building out a wireless network.

The company is looking to raise around $150 million in its deal, selling 7 million shares that it expects to price within a $20-$22 per share range. The pricing is expected to occur after Thursday's closing bell. Ubiquiti will be around $50 million of that with the remainder going to selling shareholders.

In its regulatory filing, the company said it plans to use the proceeds from the sale to pay down convertible debt and for general corporate purposes. Morningstar notes that private equity firm Summit Partners will retain a 23.5% stake in Ubiquiti after the IPO, and that the stock's public float will be roughly 8% of its total shares after the sale.

Ubiquiti sells its products to distributors, not directly, and has had to institute a policy to prohibit sales to countries which the U.S. has an embargo after its products ended up being sold into Iran by a third party. Ubiquiti had to go as far as stopping sales to one distributor that continued to sell its products to Iran as recently as February of 2011.

A second distributor was informed that its shipments were ending up in Iran as well, but Ubiquiti thinks it has resolved that situation, without having to resort to cutting the distributor off as a customer. Governments are big customers for the company's surveillance products.

Revenues have triple in the past three years to $198 million in fiscal 2011 ended on June 30 from $63 million in 2009, with 2011 profits reaching $49 million. The new product line AirMax accounted for 62% of the total revenue in the June quarter. Francis Gaskins, President of IPO Desktop, thinks the company will do well in the after-market if it reports a good September quarter.

"They introduced a couple of new products in August, so we'll see how the sales of that go," said Gaskins. He doesn't see competition as a problem right now, as even the big players don't offer the complete package that Ubiquiti has.

"The other potential risk is the general worldwide economic climate," Gaskins said. "Will these countries have enough money to buy this kind of product. I would say they will, because the underserved, underdeveloped countries aren't democracies and I'm sure they would like to have cellular service as well broadband internet access."

Morningstar's take is that Ubiquiti has done well but that tougher competition lies ahead.

"We attribute much of Ubiquiti's recent success to solid execution by management," Morningstar said. "The firm has grown revenue quickly while expanding operating margins into the low-30% range by focusing on cost leadership and targeting underserved markets with low population density."

"Although we think the firm has plenty of room for continued growth, we see little evidence of an economic moat, and we expect the firm to face significant challenges as it looks to move upstream into the enterprise markets," Morningstar continued.

-- Written by Debra Borchardt in New York.

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