EVBG Stock Leading in the Critical Event Management Space

everbridge stock
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Everbridge Stock Gains on Ensuring People and Business Safety

Today’s stock represents one of our preferred strategies of investing in growth stocks. It is called the picks-and-shovels method and it involves investing in the stocks of companies that produce solutions catering to a rising technology trend. Enterprise safety has become a critical area of late and there are a few companies that are riding this trend and stand to deliver substantial gains to their investors. 

One such company is Everbridge Inc (NASDAQ:EVBG), which is a global provider of Software as a Service (SaaS)-based critical communications and enterprise safety solutions. Its Critical Event Management (CEM) software helps in gaining an integrated view of threat data, quickly locate and notify any impacted people, rapidly initiate incident response, and manage the resolution.

The company’s software applications automate and accelerate the operational response to critical events in order to keep people safe and businesses running. Given the growth in the company’s business, the prospects for Everbridge stock look brighter in the coming days.

There are various public safety threats like active shooter situations, severe weather conditions, or terrorist attacks and critical business events like cyberattacks or IT outages. In these and many such incidents, Everbridge’s SaaS-based platform enables its customers to quickly aggregate and assess threat data and automate the execution of pre-defined communications processes.

The significance of what the company is trying to achieve for CEM becomes clear given the recent incidents of school shootings in the country. Everbridge just released its annual report this week and it mentions the research by United States Department of Homeland Security.

The research indicates that the average duration of an active shooter event at a school is about 12.5 minutes but the average response time to such an event is 18 minutes. Hence, the ability to rapidly organize a response is of utmost importance.

The company’s applications enable the delivery of messages in almost real-time to more than 100 different communication devices, in more than 200 countries, in 15 languages and dialects—all simultaneously. In 2017, the company delivered about two billion communications. Given the growing significance of this space, the demand for CEM solutions is expected to continue growing and positively impacting EVBG stock.

There is a significant market for CEM solutions. Based on the data from Frost & Sullivan, presented in an independent study commissioned by Everbridge, together with data from MarketsandMarkets Research Private Ltd., the company’s addressable market is expected to grow at a CAGR of 17.5% to $41.1 billion in 2020. (Source: “Annual Report,” Everbridge Inc, March 12, 2018.)

And Everbridge is well-positioned to capitalize on this growing opportunity. With the increased adoption of CEM solutions across a variety of organizations and industry verticals, Everbridge stock is likely to see higher gains in the coming years.  

The company announced its fourth-quarter and full-year 2017 financial results last month, which exceeded the high end of the company’s guidance for revenue and adjusted earnings before interest tax, depreciation, and amortization (EBITDA). Total revenue reported was $29.2 million, an increase of 37% year-over-year. (Source: “Everbridge announces Fourth Quarter and Full Year 2017 Financial Results,” Everbridge Inc, February 21, 2018.)

It was a strong year for the Critical Event Management company with 36% year-over-year growth in revenues, which came in at $104.4 million. The company expects the revenue for full-year 2018 to be between $135.6 million to $137.1 million.

Everbridge ended the year with 3,711 global customers as compared to 3,205 at the end of 2016. It was also selected by the New York City Emergency Management Department as the new mass notification platform for its “Notify NYC” program. The company also announced the offer to acquire Unified Messaging Systems to enhance its product portfolio as well as expand its geographic footprint.

CEO Jaime Ellertson said, “During the fourth quarter, we continued our momentum in signing multi-product deals, increasing our average selling price, and expanding our customer base with significant new client wins.” 

The business improving was reflected in EVBG stock as well, which has gained more than 100% in the last one year. The phenomenal rise has been shown in the stock chart below.

evbg stock chart

Chart courtesy of StockCharts.com

Analyst Take

The Critical Event Management platform of Everbridge comprises a comprehensive suite of software applications that help organizations deal with critical events and includes mass notifications, incident management, IT alerting, secure messaging etc. It is a leading player in critical communications and delivers solutions to corporations around the globe.

Given the increasing complexity of current times, the demand for solutions by Everbridge will likely continue to go higher, which is a positive sign for Everbridge stock. Investors who want to play the enterprise security space should consider the opportunity in this picks-and-shovels stock.