TOP IDEAS: AirIQ Inc. (TSXV: IQ) looks to compound growth with release of new vehicle and video data in one fleet management solution, providing camera surveillance for trucking and delivery vehicles.

Investorfile's share price accumulation target of $0.20 for AirIQ Inc. was reached on July 5th, 2019. For the record, we do not revise share price targets for our Investorfile Top Ideas - Small Cap Value Stocks. We have positioned our blog to be one of the first providers of a pragmatic perspective of a small cap company stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community.

Last summer Investorfile was bullish on the prospects for AirIQ'S fiscal 2020 (See: AirIQ is set to deliver strong growth for the upcoming fiscal 2020 results). Since that blog post, the Company has delivered.

For the year ended March 31, 2020, AirIQ’s total revenues topped C$5 million, up 37%, of which about C$3 million was recurring. Equally impressive is that earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDAS) increased by 88% to over C$900,000 which lead to net income of over C$713,000, an increase of 209%. The Company also generated earnings per share (EPS) of C$0.02.

AirIQ Inc. (TSXV: IQ – C$0.32) operates in the growing telematics industry and, for over 20 years, the Company has been providing Global Positioning Service (GPS) solutions to customers throughout North America. With its intuitive web-based platform, AirIQ utilizes GPS devices to provide fleet operators and vehicle owners with a suite of asset management solutions to reduce costs, improve efficiency and monitor, manage and protect their assets. Services are available online or via a mobile app and include instant vehicle locating; boundary notification; automated inventory and maintenance reports; security alerts; electronic logging; and vehicle disabling and unauthorized movement alerts.

Typically, when AirIQ wins orders for its suite of asset management solutions, it has two distinct revenue components. The hardware component is revenue which is earned on delivery, while the GPS and video surveillance monitoring is recurring revenue.

Earlier this month, AirIQ announced a next-generation solution to its product offering to address what the Company’s Management says is a huge and under-penetrated market poised for growth. The Company says its new product IQ-CAM offers a new combination of vehicle and video data in one fleet management solution, allowing its customers to see what is happening on the road while continuing to monitor and manage their commercial vehicle fleets for safety, maintenance and performance.

According to AirIQ, the IQ-CAM offers live video streaming from a dual-camera system with both road-facing and in-cab-facing cameras. Its features include real-time video; distracted driving detection, risky driving event alerts such as harsh braking and sharp turns; tampering and vibration alerts notifying you of possible break-in attempts; night vision and historical video reviews; as well as vehicle tracking and a full suite of fleet-management reports. The Company says IQ-CAM is easy to install and operate, and provides enhanced vehicle and driver monitoring, improved safety for both drivers and vehicles and video evidence to support theft, accidents and insurance claims.

Investorfile is very encouraged by the future sales opportunities of AirIQ’s entry into the mobile camera surveillance market from existing and new customers. We are also encouraged by the Company’s Q1 financial report for fiscal 2021 which ended June 30, 2020 and would have been impacted by a slowing economy due to COVID-19. Despite the pandemic, a key financial metric for the Company is its growth in recurring revenues, which was up 11% compared to last year’s Q1 and also up sequentially from the preceding quarter. Recurring revenues generate strong gross margins for the Company which then has positive impact upon its profitability. AirIQ’s net income for fiscal Q1 2021 was up 12% to C$181,000 generating C$0.01 EPS for the quarter.

The growth in profitability has contributed to the Company’s strong balance sheet. AirIQ has over C$2 million in cash and is debt-free.

We acknowledge that AirIQ’s stock price is already up 300 % in value since Investorfile first recommended the Company as one of its Top Ideas (See: AirIQ is a technology company small in size but the stock is big in value). But the Company’s new camera surveillance solution for commercial trucks may be a significant growth opportunity. Also, we would be remiss to not mention that one of Investorfile’s other Top Ideas: Gatekeeper Systems (TSXV: GSI), which is a provider of camera surveillance solutions for school and transit buses, has seen significant growth in its business and that stock is currently up 464% since we first launched coverage as well. This provides some validation as to the growth potential in the mobile surveillance marketplace in general.

AirIQ has approximately 29.8 million shares outstanding.

The Company's website: www.airiq.com

Author's share ownership disclosure: IQ - Yes

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This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

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