This is favorable for investors because the revenue stream is more visible and predictable. LoJack is also a retail/online partner, but in the market, LoJack has outperformed Absolute as of late:Ī subscription model represents the majority of the solutions sold by Absolute Software.
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It is the only company that couples device management with cross-platform management for PC, Apple, Android, and Windows Phone systems. The company has a moat in device management. Considering OEM partners represents the primary sales channel, investments in marketing and sales will likely be effective.
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Absolute Software is boosting its sales and marketing unit to grow revenue and to take advantage of the growth in mobile devices. Stronger growth ahead would make Absolute Software an appealing investment. To be a leader in device management, the company marketed itself as providing "Many Devices One Solution." In fiscal 2012, sales rose 12% to $88.7M, helped by an expansion to markets ranging from government, healthcare, and corporate. This sets a floor at its current share price.Ībsolute Software offers Computrace, a theft management tool that gives customers a response system for missing devices. A restructuring in operations is lowering the impact of unforeseen headwinds. It will be reasoned that the prospects are improving more dramatically than the market realizes. LoJack, by contrast, has $14.8M in debt and $23.8M in cash.Ībsolute Software's shares may be benefiting from the attention given to LoJack, but still offers an asymmetrical reward relative to a lowered risk profile.
Not only is Absolute Software bigger by market cap ($313M), but the company is flush with $62.9M in cash, has a declining volatility in its share price (55% in 2012 compared to 69% in 2011), and is growing sales. Investors interested in an endpoint security and management software but not wishing to be exposed to as much stock price volatility should look at Absolute Software (ALSWF) instead. But going forward, it should be expected that LoJack will continue move with significant volatility: the company is small, with a market capitalization of $85M, and is speculated to be a takeover target. A number of insightful pieces from Seeking Alpha (see here and here) might explain a recent spike in shares of LoJack ( LOJN).