Shares of ShotSpotter (NASDAQ: SSTI) have soared this spring, and for good reason.
ShotSpotter is a gunshot detection business headquartered in Newark, California. The company provides gunshot detection products through a SaaS-based subscription model to clients around the globe.
At the moment, ShotSpotter has clients located in the United States and South Africa. Company executives are adamant it will not be long until Shotspotter products are used in other regions of the world. The company’s share price has double since last summer’s initial public offering. The question is whether the stock will continue to climb, or if it will cool off in the short-term and possibly bounce right back up after profit-taking.
This security company has been in the news for all the right reasons of late. The company recently announced a couple new cities will make use of its gunshot detection technology in the years ahead. ShotSpotter also announced that current clients have plans to expand their use of the company’s technology. Company executives recently gave a Roth Capital Conference presentation that sent ShotSpotter shares even higher. Company executives should be lauded for setting forth a clear vision for their technology’s use to make cities around the world that much more safer.
This past March, the city council of Pittsburgh announced the expansion of its use of ShotSpotter’s technology. Sacramento recently announced it will use the company’s gunshot detection device service. The city of Bakersfield in California put ShotSpotter’s tech to work on March 9.
Roth Capital reiterated its “buy” rating for ShotSpotter a couple week ago, raising the price target to $36 from $27. The stock is currently priced around $32. It is quite interesting this small-cap business with a valuation of a mere $300 million has caught the attention of investors around the world as well as Wall Street analysts. The relatively small size of this company is part of the reason why its stock swings so wildly in response to news coverage and analyst ratings alterations.
ShotSpotter is in a good position. More and more cities are embracing the company’s gunshot detection products. In fact, ShotSpotter is the industry leader in this category. Those who pay close attention to the company’s news releases are well aware of the fact that there is plenty of potential for sales expansion. Look for more and more cities to purchase ShotSpotter’s gunshot detection products as time progresses. The only caveat is that a considerable amount of growth is already priced into the stock. Furthermore, shares are trading at about 10 times the anticipated revenue for 2018.
ShotSpotter has become a Wall Street darling of sorts in about a year’s time mainly because it is the leader in gunshot detection technology. The company’s solutions assist law enforcement officials and security workers in their push to identify, pinpoint and deter the use of guns.
The timing could not be more on the company’s side. Guns are undoubtedly a point of contention in the United States, and have dominated media coverage in recent weeks. This means ShotSpotter will likely have a steady stream of domestic customers right here at home.
It is worth noting ShotSpotter announced the appointment of a new Vice President of International Sales for Latin America earlier this month. ShotSpotter also appointed a new Senior Vice President of Marketing and Product Management, Sam Klepper. Klepper’s promotion is meaningful as he has experience with IoT marketing and platform product sales.
ShotSpotter is held in high regard amongst financial analysts. The company forecasts a 58 percent increase in profits for 2018. However, those who have been on the sidelines area challenged with the task of determining how much anticipated growth is already factored into the stock’s price. Prospective investors might be better served by sitting on the sidelines until the company’s next round of financials are released.
If you owned ShotSpotter during this incredible rise, consider selling a portion of your investment and re-analyzing your stake in the company after its next financials are released.
Regards,
Ethan Warrick
Editor
Wealth Authority
