Gatekeeper Systems Signs Yet Another Deal During the COVID-19 Outbreak
Gatekeeper Systems (CA:GSI – $0.23 & US:GKPRF – $0.17 & GER:1GK – €0.14) is again proving to be a leading provider of intelligent video solutions for public transport and smart cities as it announced another agreement this past week. The Company has been contracted to equip 145 school buses in Halifax, Nova Scotia with intelligent video recording solutions. It now has presence in all ten of Canada’s provinces, making it a true national company. While schools have been shut down amid the COVID-19 outbreak, this has not stopped Gatekeeper from using this time to grow.
Gatekeeper is on the correct side of government legislation, enabling its fast expansion. In February 2020, the Council of Ministers Responsible for Transportation and Highway Safety released the Strengthening School Bus Safety in Canada report from the federal, provincial and territorial Task Force on School Bus Safety.
The Task Force, for example, recommended the application of video safety measures such Stop Arm cameras to monitor and prevent dangerous incidents caused by passing motorists. In addition, it recommended the use of 360° cameras as a means of better detecting and protecting children and other vulnerable road users around the exterior of the bus.
Gatekeeper has substantial experience in supplying cameras for school bus safety. It has sold over 100,000 cameras that are being used to help protect children while riding to and from school. This is just the tip of the iceberg though, as the Council report estimates that 2.2 million Canadian school children travel to and from school every day on Canada’s 51,670 school buses. In the United States, however, where Gatekeeper also has a strong presence, the school bus market is approximately 10 times larger!
An Overview of Gatekeeper’s Platform-as-a-Service Model
Gatekeeper’s success in garnering contracts with public transportation authorities and school bus services stems from its ability to offer a comprehensive and versatile suite of intelligent video solutions through its Platform-as-a-Service (PaaS) model. Devices can record, store, and wirelessly transmit video and audio from multiple devices, serving as the “black box” to aid in accident investigations.
Clients can choose from a variety of services in order to fit their surveillance and security needs. These include Video Analytics Software, Stop Arm Cameras, 360° Cameras, Interior Cameras and the Tactical Ready Kit.
• The video analytics software enables quick and easy assembly of video evidence for the police or other authority figures. It can be used to monitor potential issues between the children, such as bullying, while riding the school bus.
• The stop arm camera automatically records license plate information of vehicles that illegally pass a school bus when the stop arm is deployed. As it is one of the leading Council recommendations, this feature is undoubtedly a key competitive advantage for Gatekeeper.
• The 360° camera provides the bus driver with real-time imaging all around the school bus. This is imperative as it allows the driver to clearly see if it is safe to operate the bus after each drop-off point.
• The interior camera records the video and audio inside the bus using adjustable vandal-resistant cameras.
• Finally, the tactical ready kit is a portable unit that allows law enforcement personnel to obtain real-time display of the internal video and audio of a school bus in close proximity, even while in motion.
Gatekeeper Remains a Rare Undervalued Tech Gem Despite Recent Run
GSI has gone on a bit of a run since it reported its Q2 financials. The stock is now $0.23 on the TSX Venture Exchange and is within striking distance of its 52-week high of $0.28. Some investors may think that the recent run means that they have missed out, but GSI is still valued at a mere $20 million market cap. Gatekeeper is trading at a 1.0x revenue multiple based on forward looking estimates of its revenue for the rest of the year. As trailing EPS is $0.01, it is trading at a 22.5x price to earnings multiple. Having any sort of price to earnings multiple is rare for a microcap technology stock, let alone one that is generally below the typical tech company listed on the NASDAQ. So there is still plenty of upside remaining.
Despite the shaky economic times we live in, market sentiment has drastically improved on GSI since its COVID-19 related pullback to $0.12 in mid-March. CEO Doug Dyment’s purchase of over 2.9 million shares for $522,000 sent a clear message to the market of his confidence in the Company. Gatekeeper has everything a small cap investor could possibly want in an investment: transparent financials, a straightforward and successful business plan, a solid balance sheet, and a strong leadership and management team led by a CEO who has laid down a significant amount of his own money to purchase more shares. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $0.69||Latest Company Report (pdf)|
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