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Avigilon gets price target cut at PI

Avigilon, says PI analyst Pardeep Sangha, is beginning to establish a track record of beating consensus estimates, making the company’s stated goal of reaching $500-million in revenue by fiscal 2016 more and more believable as time goes on.

A disappointing quarter has PI analyst Pardeep Sangha cutting his price target on Avigilon (Avigilon Stock Quote, Chart, News: TSX:AVO).

Yesterday, Avigilon reported its Q1, 2015 results. The company earned $11.06-million on revenue of $75.4-million, a 35% bump over last year’s Q1 topline of $55.8-million.

“Avigilon delivered strong revenue growth and record gross margin in the first quarter, a testament to our competitive differentiation and proven business model,” said CEO Alexander Fernandes. “We also continued to make substantial investments in the business to drive ongoing growth, as we remain committed to achieving our stated goal of $500-million in annual run-rate revenue by the end of 2016.”

Sangha says he continues to like Avigilon, but notes that the quarter missed both his and the consensus estimates. He notes that the company continues to aggressively increase its operating expenses to support future growth. Longer term, the analyst says he does not doubt Avigilon can reach its lofty goals.


“Management continues to be confident that Avigilon can achieve a $500M revenue run rate by the end of 2016, and does not see any softening or weakness in the business,” said Sangha. “Q2 is a seasonally stronger quarter than Q1; hence, we are forecasting record revenue of $85.4M. We are forecasting overall revenue growth of 31% in FY15 and 24% in FY16.”

In a research update to clients today, Sangha maintained his “Buy” rating on AVO, but reduced his one year price target from $32.00 to $29.00.

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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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