Avigilon’s (TSX:AVO) run is nearly unprecedented in the recent history of Canadian tech, but PI analyst Pardeep Sangha says there is still upside.
Yesterday, Avigilon reported its fourth quarter and fiscal 2013 results. The company earned $21.6-million on revenue of $178.3-million, a topline that was up 78% over the same period last year.
CEO Alexander Fernandes characterized the quarter.
“These results reflect the impact of the growth investments we made in prior periods to expand our operations, particularly within sales, marketing and product development,” he said. “The year was also highlighted by two strategic technology acquisitions, which add complementary products and technology to our industry leading, end-to-end HD surveillance solution, and allow us to expand our business into other segments of the global security market.”
Sangha says he believes Avigilon is well positioned to continue to grow its revenue. He notes that the company’s products are now seeing adoption on a global basis and there is huge runway in the space. The PI analyst cited data that suggests the global video surveillance systems market is expected to grow from (U.S.) $12.6 billion in 2012 to (U.S.)$23.3 billion in 2016.
In a research update to clients this morning, Sangha maintained his BUY rating on Avigilon, but raised his one-year target on the stock to $40.00, up two dollars from his previous $38.00 target. His new target, he explains, represents a 4.5x EV/Sales multiple and a 17.5x EV/EBITDA multiple of our FY15 estimates.
Sangha says Avigilon deserves a premium valuation given the Company’s strong growth profile. He expects the company’s topline will grow 50% in fiscal 2014 and 35% the following year.