• by Joe Mandese  @mp_joemandese, September 16, 2013

Rocket Fuel has lived up to its name on Madison Avenue, expanding at ballistic speeds, and now it is poised to do the same on Wall Street, according to one top analyst. “We can envision a $1.5 billion valuation for Rocket Fuel as [a] realistic trading level in the period following its IPO this week,” Pivotal Research Group analyst Brian Wieser writes in a report to potential investors on the eve of its initial public offering.

While Rocket Fuel initially will have a market capitalization of about $1 billion based on its IPO, Wieser predicts a potential “50% upside, depending on where the IPO eventually prices.”

That should come as good news for the publicly traded ad technology sector, which has generated tepid investor reactions to a spate of IPOs over the summer, including some big video exchanges such as Tremor Video and YuMe.

"As a pure-play public company in a ‘hot’ advertising sub-sector, Rocket Fuel reminds us of Millennial Media at the time of its IPO in early 2012,” Wieser recalls, adding, “On the positive side, in May 2012 Millennial was one of the only public pure-play sellers of mobile media, vs. Rocket Fuel which is now to become one of the only pure-play seller of programmatic online advertising.”

That said, Wieser isn’t exactly long on Rocket Fuel’s stock, noting that, “our medium to longer-term view of the company is somewhat more negative given the challenges such a company will face in generating and sustaining the cash flow growth necessary to justify such a valuation, let alone maintain its strategic positioning within the industry.”