ShotSpotter (SSTI) can help reduce the risk of dying from gun violence and make some money at the same time, explains Ian Wyatt, growth stock expert and editor of Million Dollar Portfolio.
The company offers gunshot detection systems that can detect a shot fired on a full city block or a college campus. The advantage there is that, instead of waiting for someone to call 911, the system can alert law enforcement in real time, improving response times and saving lives.
ShotSpotter recently reported strong fourth-quarter earnings; revenue was up 49% year-over-year to a record $9.7 million. Net income also came in at $302,000 ($0.03 per share), compared to a net loss of $2.5 million (-$0.26 per share) in the same period last year.
For 2019, the company expects revenue to fall between $45 million and $47 million and to post its first full-year profit. Driving that positive outlook is growing deployment of ShotSpotter’s technology.
By the end of the year, the company’s technology had been deployed across 640 square miles, up 35% from 2017. ShotSpotter systems are now used in 95 cities and on 10 college campuses, in addition to other sites.
The recent border wall debate also bodes well for companies like ShotSpotter. A contract might not be huge in relative terms, but for a young company like ShotSpotter, it would make a big difference to the bottom line.
Aside from a national security contract, the company is still trying to make it easier for localities to take advantage of its technology. The company has partnered with Verizon (VZ) to offer its technology in conjunction with the telecom’s Light Sensory Network (LSN).
An internet-of-things platform, LSN uses an equipment bundle on light posts that provides lighting control, traffic analytics and parking solutions. By bundling ShotSpotters’ acoustic sensors in with Verizon’s technology, it will be easier and cheaper for cities to deploy gunshot detection technology and cover a larger area.
ShotSpotter doesn’t expect to begin seeing a benefit from the partnership until late this year — there’s a lead time between making first contact and getting a system installed — but it believes it will contribute towards meeting its sales goals. ShotSpotter is a terrific long-term play on public safety.
