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Avigilon should hit a quarter-billion in revenue in 2014, says Cantor’s Kew

Cantor Fitzgerald analyst Justin Kew says the recent financial results of Sweden's Axis Communications are a solid indicator of the financial health of Avigilon's space.

Cantor Fitzgerald analyst Justin Kew says the recent financial results of Sweden’s Axis Communications are a solid indicator of the financial health of Avigilon’s space. The recent results of one of Avigilon’s (TSX:AVO) peers bodes well for the Vancouver-based company’s upcoming Q3 results, says Cantor Fitzgerald analyst Justin Kew.

Tomorrow, after market close, Avigilon will report its third quarter numbers. The company is following on a Q2 in which it earned $3.4 million on revenue of $39.2-million, a topline that was up 61% over last year’s second quarter.

Kew says Sweden’s Axis Communications, a pure-play, publicly-traded comparable to Avigilon, released Q3 results in October that were solid, and he believes this is a good indicator of the health of the network video space in general, although Axis does not provide a comprehensive video management software solution the way Avigilon does.

The Cantor Fitzgerald analyst says he expects Avigilon will generate GAAP EPS of $0.08 per share on revenue of $41-million in its Q3, higher than the street’s expectation of $0.05 on $40.4-million in revenue.

HIRE Technologies

Kew thinks Avigilon will become more profitable in fiscal 2013 and 2014 as it lowers operating expenses as a percentage of revenue. But he says the focus is still on the topline, where he expects the company will hit $160-million in 2013 and $250-million in 2014.

In a research update to clients this morning, Kew reiterated his BUY recommendation and $21 target price on Avigilon. His target, he says, is based on 20x his forecast for fiscal 2014’s EV/EBIITDA, a number he believes is justified by the company”s “extraordinary historic and forecast
revenue and EBITDA growth.”

Shares of Avigilon closed today up 5% to $20.95.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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