ShotSpotter stumbles as top-rated analyst moves to sidelines

Soundthinking

15/07/2019 18:52

(Updates, adds Northland's comments on corrected research note)
    ** ShotSpotter Inc  SSTI.O  down 8.5% to $39.48 in Mon
afternoon trade after Northland Capital Markets downgrades
seller of gunshot detection systems to "market perform", saying
potential customer churn heightens downside risk
    ** Northland cuts PT by $13 to $47, 10% below Street median
(Refinitiv data)
    ** Analyst Tim Klasell garners 5 of 5 stars from Refinitiv
StarMine for both estimate accuracy and recommendation
performance on SSTI
    ** In early Mon research note, Klasell pointed to media
reports from early Jul confirming Sacramento County, CA, will be
ending its SpotShotter program due to budget cuts
    ** In corrected note, he writes, "The Sacramento City
Council voted to continue its SpotShotter deployment. The
Sacramento  County  Sheriff's  Department  (a  smaller, 3 sq
mile customer) will churn however"
    ** Klasell adds there is no change to revised thesis or
rating/PT as "we nonetheless believe customer churn is
increasingly a concern"
    ** On May 10, SSTI plunged 19% after co blamed 2019 forecast
cut on loss of a major customer and delays in contract
negotiations with two potential customers  urn:newsml:reuters.com:*:nL3N22M4AP
 urn:newsml:reuters.com:*:nGNX7N51SJ
    ** 7 of 10 covering analysts rate SSTI "buy" or stronger,
rest have "hold" equivalent
    ** With today's decline, SSTI carving YTD gain to 27%.
Still, stock is more than triple its Jun 2017 IPO price of $11

 ((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 646-223-5017))