Initiating Coverage on Gatekeeper Systems, Time to Buy This Undervalued Technology Pearl

Gatekeeper Systems (TSXV: GSI – $0.10 & OTC: GKPRF – $0.08 & Frankfurt: 1GK – €0.06) has a simple philosophy: It uses the latest in smart digital video technology to keep people safe and secure whether they are taking transit to work or riding a school bus to classes. Gatekeeper designs innovative, high-definition end-to-end video safety, and security solutions for mobile applications including, transit and school buses, light and heavy rail, ambulances, firetrucks, law enforcement vehicles, and airborne digital recording systems for military applications.

The Company has installed more than 100,000 cameras on school and transit buses and serves more than 3,500 customers all across North America.

Gatekeeper has also developed a high-speed license plate reading system, which is attached to the outside of a school bus and records video evidence required to prosecute stop arm violators. With that, the Company developed a cloud-based software application with the trade name TIM (Ticket Infraction Management) System that connects to the vehicle owner database to match the vehicle’s tag with its owner and manages the entire citation cycle for stop arm infractions. Recent legislation in some US states and Canadian provinces allow authorities to use video from a school bus as evidence to issue a citation for stop arm violations.

The litigation market should become a powerful growth area for Gatekeeper. The Company has marketed its school bus stop-arm violations solution to school boards and law enforcement districts under a recurring revenue sharing model. The average citation is between $250 USD and $500 USD. The Company anticipates recurring revenue streams from its stop-arm business to grow substantially in the coming years.

Moreover, the increasing demand for Video Content Analytics (VCA) and Video Surveillance as a Service (VSaaS), incorporation of artificial intelligence in video surveillance systems, and increasing demand for intelligent transportation systems in smart cities have been identified as key opportunities expected to significantly accelerate Gatekeeper’s growth.

With a clean balance sheet and attractive growth potential for both 2018 and 2019, Gatekeeper is a fundamentally solid Company in the tech industry. When the Company’s cash is subtracted from its current market cap, the entire business is valued by the market at a little over $4 million, or about half of its annual revenue.

We initiate coverage of Gatekeeper Systems with a buy recommendation and a price target of $0.28, which is 180% above today’s stock price.

Download the third quarter 2018 Gatekeeper Systems Company Report. Advice: BuyPrice Target: $0.69Latest Company Report (pdf)
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