Mobotix Stock Plummeting

By John Honovich, Published Aug 18, 2014, 12:00am EDT

Much like the company itself, Mobotix' stock has hit hard times, dropping more than 60% in the past 12 months.

In this note, we examine what is happening and why.

Of course, given their unceremonious firing of their CEO and subsequent departure of the head of their America's division, following years of declining competitiveness (as we first examined in 2009), this should not be surprising.

Stock

Here's their stock chart for the past year:

Worse, the stock's descent has accelerated in the last 4 months, losing half its value in that time.

Mobotix's market capitalization is now ~$120 million USD, down from ~$320 million USD last year.

Financials

Mobotix's growth has been poor (sub 10% annual) for the past 3 years, with the most recent 6 month period under 4%.

Equally concerning for investors, Mobotix profitability was sharply down in that period, at just 4% net margins versus 12% in the previous year. This was driven by a decrease in gross margins for their products.

Outlook

Mobotix incremental product enhancements are too little, too late. While they have some new cameras and are improving their historically difficult to use software, their prices remain far too high, and they refuse to adopt basic requirements such as H.264 and ONVIF.

A reasonable executive would connect these issues to the plummeting stock price, but Mobotix has shown determination to their contrarian approach, perhaps to the bitter end.

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