On Wednesday, Avigilon reported its Q2, 2017 results. The company earned (U.S.) $6.7-million on revenue of 99.4-million, a 16 per cent topline bump over the same period last year.
“In Q2, we significantly increased profit, achieved strong revenue growth and continued to outpace the industry,” said CEO Alexander Fernandes. “We successfully executed our strategy, led the industry with innovative new technology and solutions, and gained market share.”
Sangha notes that although the company did not beat his topline estimate of $100.2-million, its Adjusted EBITDA number of $17.8-million was significantly ahead of the $14.3-million he had modeled. He notes that Avigilon beat the street consensus on all metrics, and says he expects more of the same from the Vancouver-based company.
“We are expecting revenue growth to benefit from strong demand for video analytics products, growing IP license revenue and product introductions,” Sangha says.
In a research update to clients today, Sangha maintained his “Buy” rating, but raised his one-year price target on the stock from $25.00 to $25.50, implying a return of 77.7 per cent at the time of publication.
Sangha thinks Avigilon will generate EBITDA of (U.S.) $68.2-million on revenue of $416.7-million in fiscal 2017. He thinks those numbers will improve to EBITDA of $88.9-million on a topline of $477.0-million the following year.