Avigilon’s (TSX:AVO) recent rise has been virtually unparalleled in the recent history of Canadian tech, but CEO Alex Fernandes says the company is only scratching the surface.
On November 5th, Avigilon announced it had earned $0.23 a share on revenue of $51.1-million, up 101% over the same period a year prior. The street had been expecting earnings of $0.05 on $40.4-million in revenue. Shares of the Vancouver-based company spiked following the news, but Fernandes says the company is barely scratching the surface.
Fernandes says what will spur his company’s continued growth is the fact that the market for video surveillance is actually still 95% analog. This video, he says, is “grainy, pixelated and virtually unusable”. Avigilon’s solution, meanwhile, was built from the ground up to be high-def, and the company has built, among other things, its own custom lenses because standard lenses, its own cameras, and its own compression algorithms.
The runway Avigilon is looking at is not only about the low penetration of its current market, but its overall growth, says Fernandes. Recent stats suggest the video surveillance market will grow from $12.6-billion in 2012 to $23.2-billion by 2017. Avigilon’s goal, says Fernandes, is to reach $500-million in revenue by 2016.
Following Avigilon’s Q3, upgrades came from Cantor Fitzgerald Canada, Raymond James, PI Financial, RBC Capital, CIBC and TD, who raised their one-year price target to a street-high $39.