Infinera Corp (NYSE:INFN) shares soared more than 50% on their first day of trading as many early stage investors enjoyed a quick flashback to the dotcom days. The company's IPO raised more than $182 million for the company, giving it an initial valuation of $108 billion. However, whether or not the company deserves such a high valuation remains a subject of great debate.

Investors are watching the company carefully as it aims to disrupt an established market: optical networks. Specifically, the company said that it could produce chips containing optics technology to greatly simplify the translation of analog optical signals that travel over fiber optic networks into digital signals. This would eliminate the need for all-optical networks.

Infinera was founded in December of 2000 and began shipping its products in November of 2004. The company posted a loss of $66.5 million in 2004, $64.8 million in 2005 and $89.9 million in 2006. However, the company has experienced a surge in revenues which have climbed from $4.1 million in 2005 to nearly $53 million in 2006. Interestingly, the company also has an accumulated deficit of $333.9 million.

So, is the company worth the price? Well, by comparing the revenue and costs trends we can expect the company to become profitable around 2009 with a high growth rate. However, in the dynamic telecommunications network, it is difficult to say whether or not they will be able to sustain their revenue growth rates. Moreover, any competing technology could greatly impair the company's growth. Combined, the stock may not be the best investment at this point, but it is certainly a stock worth watching over the next few years!

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