RE:Why is this a surprise?I'm not sure what analysts are basing their valuations on, but they don't seem to have a clue what a company like Avigilon is worth.
Here I go dragging the Axis takeout by Canon again, but Canon thought fair value was 43x EPS for a company that had barely managing to grow earnings at 20% Y/Y, which is the lowball estimate of the projected annual growth rate for the industry.
Avigilon comes out with 42% Y/Y EPS growth for 2014 and it closes the day after the report with a 27x trailing P/E which makes absolutely no sense in comparison.
There's obviously something wrong with this picture.
A company growing EPS at 42% should command roughly a 42x P/E and a takeout premium should push that even higher.
And they're about to gain access to an even greater potential share of the U.S. market, where they have been doing extremely well, once the new plant comes online in Texas later this year.