Versant Partners analyst Tom Liston says Avigilon’s revenue growth might actually accelerate because the company’s new HD PTZ (Pan-Tilt-Zoom) cameras will soon begin shipping in volume.Avigilon (TSX:AVO) yesterday reported its Q2, 2012 results. The company earned $1.31-million on revenue of $24.4-million, which was a 52% increase ove the $16-million topline the company posted in last year’s Q2.
“Effective execution of our growth strategy has led to record revenues in the second quarter,” said Avigilon CEO Alexander Fernandes, adding: “We have been expanding our global sales team, building awareness of our brand and investing in product innovation. I expect all these activities to continue to drive strong growth.”
Versant Partners analyst Tom Liston says Avigilon is a rare bird. He points out that a select few profitable companies can deliver revenue growth in excess of 50% and have a real opportunity to deliver substantial growth over multiple years. The 52% revenue growth Avigilon posted yesterday, he notes, is its sixth consecutive quarter beyond this benchmark. In a research update to clients today, Liston maintained hs BUY rating on Avigilon and raised his target price to $9.50 from the $8.75 he initiated coverage with late last month.
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Founded in 2004, Avigilon designs and sells next-generation surveillance systems. Management says the surveillance market is fragmented because to date there has been no integrated supplier of equipment, meaning the majority of end users do not have high definition systems due to compatibility issues and a lack of industry standards. Avigilon allows clients operating mission critical environments such as prisons and casinos to have install a high def system that is reliable as analog, and has the added benefit of providing video resolution that is standing up in courtrooms, which reduces legal costs. Avigilon has sold over 210,000 camera and software licenses that have been installed at more than 12,000 customer sites.
Liston says Avigilon’s revenue growth might actually accelerate because the company’s new HD PTZ (Pan-Tilt-Zoom) cameras will soon begin shipping in volume. What’s more, adds the Versant analyst, investments the company made into sales and marketing and research and development earlier this year should soon start to yield dividends.
At press time, shares of Avigilon were down 6.7% to $7.21.
Related: Cantor Fitzgerald’s Tom Liston shares his top Canadian tech picks for 2013