Pointer Telocation - New Microsoft AI collaboration
Pointer Telocation has announced a new collaboration with Microsoft Israel to create an AI-powered driver monitoring and prediction tool. We see the potential for this to give Pointer an important edge in the driver monitoring space in which it is already competing strongly. Q118 results showed a recovery in product sales from Q4 (up 29% q-o-q), but only 5.6% y-o-y growth arising from low demand for non-LTE enabled devices and Latin American (Latam) currency declines. Nevertheless, the group continued to deliver on local currency service revenues, margin gains and cash flow generation but, with Latam currencies continuing to weaken in Q2, despite expected boosts to sales later in the year, we have trimmed our current year EBITDA and EPS forecasts by 10% and 22%, respectively giving rise to a peer-based valuation of $19.1/NIS68.3, and DCF value of $18.1/share or NIS64.6/share.Pointer Telocation is a provider of mobile resource management (MRM) products and services for the automotive, insurance industries and other mobile tracking markets. Co.'s products segment Cellocator, is focused on the design, development and production of MRM products including: devices for asset tracking; fleet management and security products. MRM. Communication systems contained within Co.'s products and tracking hardware utilize either radio frequency or GPRS/GSM technologies. Co.'s services segment MRM, offers a range of services including inter alia: asset tracking; fleet management services; and stolen vehicle retrieval services.
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