In a Sept. 10 research note, analyst Nick Agostino reported that Laurentian Bank Securities initiated coverage on Liberty Defense Holdings Ltd. (SCAN:TSX.V; LDDFF:OTCQB; LD2:FSE) with a Speculative Buy rating and a CA$1.40 per share target price. The company's share price now is around CA$0.70.
Commercial launch of Liberty Defense's concealed weapons detection solution HEXWAVE is expected by H2/20. "If successful, there could be further upside to our valuation," Agostino added.
The analyst reviewed the compelling parts of the story.
1. Liberty Defense's product HEXWAVE features cutting edge technology, detecting threats and providing real-time alerts to avert attacks. The company, "layering onto exclusively licensed MIT LL technology, has the potential to lead the next generation of advanced screening solutions," Agostino commented.
2. HEXWAVE differs from other similar systems. It detects metal and nonmetal threats, can be applied openly or covertly and works both indoors and outdoors.
Also, HEXWAVE employs active 3D radar imaging technology and has a non-interfering operating frequency design. This differs from other solutions that tend to use millimeter or microwave radar technology that can be affected by the environment. HEXWAVE uses artificial intelligence for the real-time detection. Additionally, the solution features "superior throughput performance and a flexible smart system design," noted Agostino.
3. The potential market for HEXWAVE is "very large," Agostino indicated, as the security solution is optimal for high-traffic, fast-paced public and private locales, like shopping centers, office buildings, sports venues, government offices and transportation hubs potentially at risk for a large-scale attack. "We estimate this target market could be greater than $3.5 billion, with upside from international expansion, expanded market applications and better unit sale economics," he added.
4. Liberty Defense has a scalable, three-pronged, recurring revenue model. At scale, the model can yield greater than 45% gross margins with 20–25% EBITDA margins based on the company's proprietary technology platform, Agostino estimated.
5. The company is led by CEO Bill Riker, who has more than 35 years' experience in the industry, and has a robust advisory committee comprised of diverse business professionals. Insiders own about 37% of the company's shares.
6. To date, Liberty Defense has signed six memoranda of understanding (MOU) with various, diverse, high-profile organizations to beta test HEXWAVE.
Agostino pointed out that near-term catalysts for the Atlanta, Georgia-based firm include the signing of additional MOUs as opportunities arise, completion of alpha testing, followed by a demonstration in Q4/19 of HEXWAVE's subsystems and subsequently, beta testing of the product by various partners.
Read what other experts are saying about:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: none. She or members of her household are paid by the following companies mentioned in this article: none.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Liberty Defense Holdings. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Liberty Defense Holdings. Please click here for more information. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Liberty Defense Holdings.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Liberty Defense Holdings, a company mentioned in this article.
Disclosures from Laurentian Bank Securities, Liberty Defense Holdings Ltd., , September 10, 2019
The analyst(s) certify that (1) the views expressed in this report in connection with securities or issuers they analyze accurately reflect their personal views and (2) no part of their compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by them in this report.
The Research Analyst’s compensation is based on various performance and market criteria and is charged as an expense to certain departments of Laurentian Bank Securities (LBS), including investment banking.
Liberty Defense Holdings Ltd.: The Analyst has visited material operations of this issuer.
Laurentian Bank Securities Inc. and/or its officers, directors, representatives, traders, analysts and members of their families may hold positions in the stocks mentioned in this document and may buy and/or sell these stocks on the market or otherwise.