Versant’s Liston Says Absolute Software is an Absolute Bargain

Yesterday, Absolute Software (TSX:ABT) reported its Q2, 2012 results. Revenue was $18.4 million vs. $16.8 million for the same period last year. The Vancouver-based company earned $1.5 million, or three cents a share in the quarter, which ended December 31st.

Versant analyst Tom Liston, who already had a buy recommendation on Absolute, sees the Q2 as the latest and most convincing piece of evidence yet that the company’s stock is about to mirror the success of its balance sheet. In a research update this morning he raised his one-year target price on the stock to $7 from his previous target of $6.15.

Liston points out that Absolute has now reported six consecutive quarters of double digit year-over-year sales contract growth. Absolute’s revenue has climbed from under $37 million in 2007 to more than $66 million in fiscal 2011. Along the way, the company has made OEM deals with Acer, Dell, Fujitsu, Samsung, Toshiba, Intel and HP.

Liston says Absolute’s lifecycle management security software, Absolute Manage, solves a “major IT pain point” for PCs, Macs and mobile devices, which can tracked and recovered with Absolute’s patented solution. The company says its products are highly tamper-resistant, or “persistent”, meaning they cannot be disabled, even by wiping the device’s hard-drive.

The consumer market for laptop and mobile device security appears to be showing no signs of slowing down. At the 2012 Consumer Electronics Show in Las Vegas, Absolute CEO John Livingston noted that, according to the US security research firm Ponemon Institute, a laptop is stolen at a U.S. airport every 50 seconds. “That statistic means that more than 6,900 laptops will be stolen from airports in the United States during the four days of CES 2012,” he said.

To date, Absolute Software has recovered more than 22,000 laptops in criminal 88 cases, representing more than $100 million.

Share of Absolute Software closed today up 5.7% to $4.97.

Disclaimer: Cantech Letter’s Nick Waddell owns 5000 shares of Absolute Software.