Gatekeeper Stock Reaches All-Time High Thanks to Sequence of New Contracts
Investors who bought shares of Gatekeeper Systems (CA:GSI – $0.39 & US:GKPRF – $0.29 & GER:1GK – €0.26) when we first recommended the stock in September 2018, are now smiling all the way to the bank. The stock this week reached a new all-time of $0.46, more than four times the price at which we first featured the Company.
Although the stock had already doubled about a year after first recommending it, it doubled again in recent weeks as the Company announced one contract after another. The pace at which Gatekeeper is gaining new business is simply overwhelming and the market has finally noticed this fast growing Artificial Intelligence (AI) & Video Analytics provider.
This week, Gatekeeper first announced that it received purchase orders from several school districts in Florida to install or retrofit video solutions on 260 of their school buses. Two days later, investors found out that Gatekeeper sold 70 intelligent video recording solutions, which are to be installed on brand new buses of a US transit agency.
Noteworthy is that these two latest deals make it even more obvious that Gatekeeper is getting traction in different regions in the US. Just last week, the Company signed an impressive deal with the 436th Airlift Wing at Dover Air Force Base. And two weeks ago, GSI announced a $270,000 CDN contract in the state of Virginia to install or upgrade intelligent video solutions for school bus interiors in four school districts. This is all in addition to its already nationwide presence in Canada, where the Company does business in all ten provinces.
Also noteworthy about Gatekeeper’s most recent deal is that the 70 systems will be factory-installed by a transit bus manufacturer. Although the exact manufacturer wasn’t mentioned by Gatekeeper, it is an important step to become the original equipment manufacturer (OEM) of intelligent video recording solutions to a transit bus manufacturer, as it opens the door of possibility that the transit bus manufacturer could select Gatekeeper for their other transit customers.
“Being an OEM supplier is an important milestone for us and we are very encouraged by the increasing adoption of our PaaS platform for Smart Cities in the transit market” commented Doug Dyment, President and CEO. “We are seeing increasing interest from transit authorities as they seek technology solutions that improve passenger safety and transit efficiency, as cities reopen following COVID-19 lockdowns.”
Gatekeeper’s Platform-as-a-Service (PaaS) business model is centered around its intelligent video devices that the Company is actively installing for transit authorities on multiple transportation modes. The intelligent devices collect vehicle data such as video, audio, GPS, time, door open/close, and will also serve as the AI-based intelligence platform for future applications such as thermal camera sensors, passenger counting, and video enforcement to capture the license plates of vehicles driving in the bus lane or illegally passing streetcars while passengers are loading or unloading.
Gatekeeper’s PaaS units are WiFi enabled and mobile connected, allowing public transit assets to become part of the intelligent transportation system in the Smart City ecosystem. The PaaS units also serve as the “black box” to aid in transit accident investigations.
Not the End of the Ride
Is it too late to buy shares of Gatekeeper Systems now that its stock has quadrupled? We feel it isn’t. Knowing that in about a month, the Company will publish its third quarter financials for the three months ended May 31, 2020. We have every reason to believe that these will be very solid numbers.
Remember that during the first six months of the fiscal year, ended February 29, 2020, Gatekeeper’s revenue grew 53% from $4,538,297 to $6,931,041. Moreover, its net income turned from a net loss of $1,142,904 to a net profit of $90,219. In fact, Gatekeeper has recorded positive net income in three of the last four quarters with a narrow loss in Q1 2020. Its net income for those last four quarters combined is $856,000.
On top of that, the outlook for the Company remains outstanding. Gatekeeper’s Platform as a Service (PaaS) strategy provides its customers with multiple services from Mobile Artificial Intelligence (MAI™) for smart city applications to end to end high definition video and data management solutions. This strategy is getting more and more attention of transit authorities throughout North America.
The valuation measure for Gatekeeper is beginning to change as it builds out its PaaS platform for intelligent transportation solutions. For example, Tesla is now valued as a data company, not a car company. Likewise, Facebook is now valued as a data company, not a social media company. We believe that Gatekeeper will be valued as data company, not a camera company, as it builds out its PaaS platform.
Currently, we have a price target on Gatekeeper’s shares of $0.69. This number could very well increase when third quarter financials are as positive as we expect them to be. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $0.69||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|