Avigilon "Probably Going To Zero Within The Next Two Years" Charges Analyst

By: John Honovich, Published on May 18, 2016

The analyst who blasted Avigilon 2 weeks ago as being a Cash Strapped, Commodity Company is not backing down one bit.

Indeed, the original target was a drop of ~40%, the stock is already down 15% since her post was published, largely due to Avigilon's weakest quarter ever, and now the analyst is projecting zero.

In this note, we examine why the projection is completely wrong but why it hits on a critical strategic weakness for Avigilon.

*** ******* *** ******* Avigilon * ***** *** ** ***** * **** Strapped, ********* ******* ** *** ******* **** one ***.

******, *** ******** ****** was * **** ** ~40%, *** ***** ** already **** **% ***** her **** *** *********, largely *** **********'* ******* ******* ****, *** *** *** analyst ** ********** ****.

** **** ****, ** examine *** *** ********** is ********** ***** *** why ** **** ** a ******** ********* ******** for ********.

[***************]

Going ** ****

*** ******* *** *****:

 **** **** ** *** when ***** ** * seemingly ******* *** ** unexplained *** ************ ********** quitting?

******** ********:

** **** *** *******'* probably ***** ** **** within *** **** *** years. 

Completely *****

***** ******** ** ************* possible, ** ** ************* unlikely **** ******** **** to **** ** *** next *** ***** ** even *** **** ******.

******** *** ***** ******* to ********* ******** *********,*********************. **** ***** ** enough *** **** ** be * ********** ******* (obviously *** ** ********** as *** *** **** hoped) *** ****** ** near **** *********** **** go ** ****.

*******, *** *******'* **** ** claim underscores * **** ******* for ********.

Weakness - *** ** **********

******** ********** (****** *** ***) is **** *** ** persuading ******. 

* *****. ** ******** prospective ******** **** ** ***** a ******* **** ********'* CEO *** ***. *** CFO **** ****** ****** the ******* *** *** CEO ******* ***** *** ********* wardrobe. *** ******** *** puzzled *** *** *********, to *** *** *****.

******, ****'* ***** ******* for ********. ****** *** portfolio ******* *********** ** **:

"*** ******* **** [********] ** the *** *** **** the ******* ** * bit *****."

******** *** ***** *** approach ** ********** **** sheer *******. *** **** works ************* **** *** are ******** ********. ****** will **** *** *** next ***** ****. *** when *** ****** ***** dramatically ******* *** **** execs ********** ****** / retire / *********, ******* any ******* ** ******** or *****, *** ******* is ******.

Worse - ******** ** ******** *********

******** ** ********** ********* of ******** **********. ** should **** ***** *** **** standing ************ **** **** even ***** ** *** IPO. *** ** **** seen **** **** ****** who **** ********** ****.

******** ****** ***** **** communication **** ***** *** criticize ****. *** **** ** ok ** *** **** legions ** ********* ********** *** will ****** *** ****** you ** *** *****, like *****. ******** **** not. 

****** ******, *** ******* at *** **** ** this *******, ** *** the *** ** *** to *** **** * critic **** **** *******. Make *** **** ******, help *** *** ***********, tell *** **** **** of *** *****, ********* her ** ****** *** can ****.

************* ********* ******** ******** reviews, *** ** ********** this ****** ***, *********** that *********:

** *** **** **** meeting [********'* ***] **** a speech about *** ** *** are *** * **** fit *** *** ******* you ****** *****. *** that ****** **** ***'* fit *** ******* (******** **** is) *** ****** ***** probably ** **********.

********** ** ********* ***** negative ***** **** *******. Rather **** ****** ** the ******** ***/** *** to **** *** *********** their ******** *** ** try ** *** *** comments ** ********* ** telling ********* **** **** to ** **** ******** reviews.

********* ********* ** ***** and *** **** * company *** ******. ********* criticism ** ***** *** a ******* *** **** ****** by ****** *** ******* explaining ***** ****. ******** does *******.

Horrible *********** *** * ****** *******

**** * ****** ******* ** bad at ********** *** **** worse ** ******** *********, unless **** ***** ***** ******* ************, they *** ***** ** face * *** ** self-inflicted ****. *** ******** has ***** ****, ** spades.

**** ** *** ******* reason *** ** ***** most *****, ***********, ************, competitively, *** ******** ** sell ** *** **** 2 *****, ** * premium ** ***** ******* stock *****.

Comments (32)

I'll buy at zero!

I think she is wrong, Hikvigilon is going to crush the market with their new low cost cameras and rich software packages coming out after they get bought out. wont go to zero though..... question should be how much hikvision is going to offer them. I say $500

$500 million*

Yes, highly disagree with zero, they have too much substance for that, so the BoD would revolt and force a sales before that.

However, they are beginning to sound a lot of what I hear about the decline of Pelco, someone who once was seen as a leader, rested on their laurels, mixed with some degree of arrogance and entitlement.

Sad, because once the market starts realizing Hikvision "has no clothes on" and they possibly carry more baggage than benefits, Avigilon could release a few low cost products that might have saved the mid to upper end of the business from itself.

Actually, they do have some fairly low cost product. The H3 (2014/2015 models) line was reintroduced back into production at a lower cost point. Are they $100 cameras? No. Honestly though, take a look at the $100 fixed focal length cameras -- is that really Avigilon's target customer?

take a look at the $100 fixed focal length cameras -- is that really Avigilon's target customer?

But can any manufacturer not have low cost fixed focal length cameras? While they most appeal to low level deployments, lots of larger scale projects routinely use a substantial amount of fixed focal length cameras. And given that Hikvision is selling good quality ones at ~$100, does not every major manufacturer (Avigilon and Axis included) need such options in their portfolio?

I think a lot of manufacturers which focus more on the higher end miss a shift that occurred due to the low cost integrated IR cameras of the past couple years:

Is a $100 fixed lens the greatest ever, best for the application, easiest to install? No.

But can it do the job at 1/4 the price or less in a lot of cases. Fixed lenses aren't ideal, but they're not that hard to design around. And the integrated IR on those $100 models often isn't the greatest, but it does the job.

So I think the answer to the question is maybe that Avigilon's target camera market isn't $100 fixed focal length, but $100 fixed focal length cameras' target market is the entire market.

When your numbers look like Avigilon's, you may want to broaden your idea of "target customer".

Hard to say, but based on the reviews I scanned thru, sounds like its ran by a bunch of schmucks, and this analyst could be very well right.

I would never buy or sell avigilon just because I don't like to deal with companies who have an internal circus as bad as avigilon.

Seriously- bragging about a personal wardrobe. That screams narssacist! That investor had to be severely disgusted and banging his head against the wall.

Avigilon is a company with some really good products and some really good people. A few top level changes, some stable leadership, and corporate communications that won't piss off the investment community, and they could really be a great company or addition to an existing company. They have some image issues because of a small minority of people that have worked at various levels of the business.

Looks like a prime target for acquisition - good products, crappy people.

Yeah, the overall culture there seems to be the main cause of all of their issues, and that comes from the top. A few years ago I was interviewing and near the offer stage with Avigilon and my current company, and I specifically chose not to go to Avigilon even though their technology is pretty cool and they offered more money. It came down to their attitude and how they treat people, which was the exact opposite of my current company. It's really, really hard to change the culture of a company (for the better) once it is set, let alone if the leadership doesn't even want to change it. I've met amazing people that worked at Avigilon, but they almost all leave because of the environment.

I think a fair number of people in the sales team stay because they believe in the product. There are some folks that have been working in the regional/national sales teams that have been selling that product at a high level for a pretty long time.

My experience with Avigilon is that of arrogance and aloofness. Some of their "senior" sales people really need to go back to Sales 101 class and re-learn how to listen to customers and not go off on their own feature-dumps or catch up with their other Avigilon buddies and their sales stories while in a meeting with a client.

In one meeting (we are an OEM/integrator client) I recall trying to ask a question about a specific application for a client and really couldn't get a word in edge-wise --- they brought something like 6 people to our office who gaggled amongst themselves like little kids who just got back to school after Labor day and had to catch up on everything.

I had to walk-out of the meeting and leave our other folks in there with them since I had specifically carved out some time in an already busy schedule to present what I thought could be a joint business opportunity.

Avigilon has a good VMS. I won't go so far as to say they have great cameras because of the price. We are an avigilon dealer and we've stopped using their cameras unless something really demands a complete end to end solution. FWIW Exacq's VMS plays better as an open solution and their access control product is only half baked.

7, what are you normally using for cameras with Avigilon's VMS?

Mostly Arecont because we have a pretty good Arecont discount due to volume so they can be somewhat competitive with the Asian invasion cameras. The problem with Avigilon is that the Hikvision connection is only ONVIF rather than native. With the way things are trending with our large enterprise customers, they are looking for more coverage for the same or less money which means cheaper cameras on an open enterprise vms.

It's a lot easier to continually upsell a customer by adding Hik/Arecont/open cameras and continually adding 5-10 a month to their system than coming in with an end to end and only being able to do 1-2. The cost to add additional cameras on the Avigilon end to end is what turns a lot of those maybes into no's when budgeting rolls around. We've just found that Exacq/Milestone have embraced the Asian cameras which Avigilon has shut much of it out since they intend to push dealers/customers into the total end to end.

The problem with Avigilon is that the Hikvision connection is only ONVIF rather than native.

What features are you missing with Hikvision/Avigilon (ONVIF) compared to Arecont/Avigilon (direct)?

If you connect a full profile S compliant camera to an ACC server, you should expect a full feature set. HIK vision cameras running profile S work great on ACC in my experience.

Agree!

HIK plus Avigilon=killer combo :)

An Avigilon prospective investor told us about a meeting with Avigilon's CEO and CFO. The CFO feel asleep during the meeting.

Though I bet he's wide awake at three in the morning...

It's all just a Barduan Conspiracy, according to the peanut gallery

Brad Bardua left two years ago this may/2016. Have you been sleeping this long, and all of a sudden, you wake up and and say, oh Brad Bardua left AVO, let me check their numbers!

You seem to know a lot about BB, is he on board with this? Uhmmm.
You seem to put your respondents on alert regarding your lawyers, would you be surprised to have a call from AVO,s lawyers as well?

Actually, they do have some fairly low cost product. The H3 (2014/2015 models) line was reintroduced back into production at a lower cost point. Are they $100 cameras? No. Honestly though, take a look at the $100 fixed focal length cameras -- is that really Avigilon's target customer?

This is correct. Those of you having issues with pricing should look at the latest pricelist as Avigilon has significantly dropped the pricing on H3 cameras.

Unless I am looking at the wrong price a fixed H3 is more than double a fixed Hik same for the varifocals. Hell, a varifocal 4mp Hik is still cheaper than a 1mp varifocal h3 avigilon.

...look at the latest pricelist as Avigilon has significantly dropped the price...

My internet is busted at the moment, can you just put it in your reply? :)

Internet is busted, but you put in a reply here online, lol?

No, it's me that's busted, not the internet. I was just trying to get my hands on that there price list. And I would have, if it wasn't for you meddlin' kids!

Undisclosed 7 Integrator: You might what to get the new pricelist as the H3 cameras are not $100 but they way closer than they used to be.

I just don't understand why it's so hard to sell Avigilon's end-to-end solutions. The advanced search features (pixel and classified object search), easy of install and maintenance plus the 3 year advanced replacement warranty make it easy IMHO.

"Avigilon is completely incapable of handling criticisms"

Worked for Dedicated Micros.

Avigilon hires new VP of Investor Relations. Ground work?

Technically, Vice President, Capital Markets & Communications. I spoke with him today, working on a post, will update.

He hasn't been banned by Alex. Now I know something is up ;)

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