ValuationAt ~$20 / share, we are trading ~16-17x trailing cash flow. If AVO can achieve their $500 mm run rate, we'd be trading somewhere in the range of 6-7x cash flow. So, based on management's internal targets, if we achieve them I'd venture that there is about 200% upside (~$60 / share target) from friday's close. That is assuming that, by achieving management's internal revenue targets, the market rewards management with a similar multiple to the one where we are trading that. I'd note that it is entirely feasible that, by achieving that revenue run rate, we could trade in excess of 16-17x trailing earnings, as achieving a $500 mm run rate is quite an impressive feat and would indicate further growth in AVO's business is likely.
Actually what I think would be the game changer for AVO is being able to bring some of the Video IQ software to market ASAP. I don't entirely understand what they are developing since I don't think they've come out and clearly explained what they are trying to develop, but from what I have heard, it will help companies who employ AVO hardware and software perform analytics on their customer base shopping in their stores. That is actually a huge deal since a lot of large companies spend tens or hundreds of millions trying to learn more about their customer base. Information like this would be highly prized by them. Look no further than Google's recent acquisition of Skybox or whatever it's called which had next to no revenue for billions .. image analytics are a big deal.