Shares of NextCard Inc. rose 38% last week, to $43.125, on favorable ratings from several investment banking firms.

The Internet credit card specialist has "first mover" advantage, said Stephen C. Franco, an analyst at U.S. Bancorp Piper Jaffray, who initiated coverage Wednesday with a "strong buy" rating.

Donaldson, Lufkin & Jenrette Inc. and Thomas Weisel Partners, NextCard's underwriters along with U.S. Bancorp Piper Jaffray, also initiated coverage that day-DLJ with a "buy" and a $70 price target and Weisel with a "buy."

Three-year-old NextCard, which raised $120 million May 14 in an initial public offering priced at $20 a share, offers credit cards using an automated, on-line approval system. It also is refining a proprietary data base designed to weed out less profitable customers, said Mr. Franco.

He predicted that NextCard would "emerge as one of the category killers that redefine the rules of an established and highly profitable industry."

He said he expects revenue to grow at a compounded annual rate of 280% for the next five years, reaching $940 million by 2003. He also predicted NextCard would break even in 2002.

In the first three months of 1999, NextCard's interest income was $660,000, up from $33,000 a year earlier. The net loss of $11 million was up from $1.3 million in the 1998 period.

Credit card consultant Michele Turkel, president of Spectrum International Consulting Corp. in Scarsdale, N.Y., said NextCard's numbers are not "terribly negative" because credit card portfolios are typically not profitable until the second or third year.

She said traditional card companies have costs that range from $60 to $80 per account but NextCard's are "virtually free."

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