The resurgence of Security First Technologies Corp.'s stock highlights a growing confidence that consumers will embrace Internet banking.

"I think 1999 will be a very big year for Internet banking," said Stephen C. Franco, an analyst at Piper Jaffray Inc., Minneapolis. "I think there is a tremendous amount of pent-up demand for high-quality Web-based banking services."

Such appraisals are bidding up shares of the Atlanta-based provider of Internet banking software. Security First's stock price has soared 145% in nine weeks, closing Friday at $26.9375.

Piper Jaffray and ABN Amro Inc. recently began coverage of Security First, issuing "buy" ratings on the stock. Both cited the company's prominent and growing customer base, including BankAmerica Corp., Citigroup, and State Farm Financial Services.

Security First's stock price hit a low of $11 in October. Its all-time high of $45 was reached May 23, 1996, the day of its initial public offering.

Mr. Franco said Security First "cleaned up" its financial house in September by selling its showcase Security First Network Bank to Royal Bank of Canada, making the company easier to evaluate from an investment standpoint.

Robert Stockwell, Security First's chief financial officer, said banks are embracing the Internet as a way to improve relationships with customers-not simply as a way to cut expenses. Increasingly, they see it as a way to develop "better and deeper relationships with their customers," making Internet deployments more effective, he said.

"Internet banking is simply a new channel which should be used to its maximum extent to extend and expand the relationship with existing customers," he said. "There is a possibility of reversing some of the disintermediation that occurred in the early 1980s."

Mr. Stockwell said his company is seen as a leader in the Web banking business, having gained significant market share among the country's largest banks. Security First has sold its services to 84 financial institutions. Though only 35 banks are already using the software, the balance are in various stages of installing and testing it.

"From a financial perspective," Mr. Stockwell said, "it is our sense that we are beginning to see the light at the end of the tunnel."

So are analysts.

Buoyed in part by the multimillion-dollar marketing campaign Citigroup is expected to put behind a rollout of Security First's on-line banking and brokerage software, analysts have high expectations for the stock.

Piper Jaffray, which initiated coverage Nov. 24, when the stock price was at $18.75 a share, set a 12-month price target of $26 and will stick with it for a few months, Mr. Franco said. ABN Amro, which began covering Security First last week, was even more bullish, giving the stock a 12- month price target of $35 a share.

In the third quarter, Security First lost $5 million on revenues of $6.5 million. Mr. Franco predicted revenue growth of 57% a year for the next four years, from a projected $22 million this year to $134 million in 2002. He said he expects the company to turn a profit in 2000.

Apart from directly licensing its software, Security First offers an outsourcing option, which it expects to supply a stable source of revenues.

Sixteen bank customers have opted to use the software through an outsourcing arrangement. When the company's data center has 225,000 end- user customers, it will become profitable, Mr. Franco said. By the end of this year, it will have 123,000 users, he said, up from 32,000 a year earlier.

Security First also has helped itself by parceling out equity to major customers, including Citigroup, State Farm, Wachovia Corp., and Huntington Bancshares.

In all, outside institutions hold a 20% equity stake in Security First, said Neeraj K. Vohra, an analyst at Friedman, Billings, Ramsey & Co., Arlington, Va.

"It had some near brushes with cash levels, so it had to find creative ways to fund itself," said Mr. Vohra, who also has given the stock a "buy" rating. "Now they are on the threshold of something big."

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