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Avigilon Corp upgraded after another earnings beat

Avigilon Corp. was upgraded to outperform from market perform at Raymond James after the Canadian surveillance solutions company beat the Street for the second consecutive quarter

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Avigilon Corp. was upgraded to outperform from market perform at Raymond James after the Canadian surveillance solutions company beat the Street for the second consecutive quarter.

Analyst Steven Li also raised his price target on the stock to $20 from $12, as Avigilon continues a winning streak that has seen it rise more than 85 per cent since mid-November.

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Fourth quarter revenues of $102 million and earnings per share of 26 cents reflect the start of a material contribution from Avigilon’s intellectual property (IP) licensing program, while a steady flow of new products with healthy margins also helped.

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Li noted that the company now has 725 patents, so it is actively looking for monetize its IP. The analyst estimates that IP licensing currently accounts for less than 10 per cent of revenues.

“An active licensing program that is starting to make a material contribution to Avigilon’s bottom-line bodes well for potential upside surprises given the high margin nature of licensing revenues,” he told clients.

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