Why Shotspotter Stock Price Chart Has Soared

As school and campus shootings make headlines and violence soars in cities like Chicago, law enforcement officials face a massive challenge in solving crimes: 80% of gunshot incidents are never reported to 911!

When a mass shooting occurs like the one in Las Vegas in 2017, another obstacle for detectives is the conflicting stories from eye-witnesses about where gunshots originated.

Finally, a company has taken on the challenge of gunshot detection, location, and forensic analysis to help law enforcement. That company is Shotspotter Inc [SSTI] and it designs, builds, and operates gunfire sensing technology for communities and buildings worldwide.

Its success so far in winning the trust of law enforcement has catapulted its valuation higher. Although it has generated just $23 million in revenues last year, its market capitalization soared to nearly half a billion dollars. A price/sales ratio that high means the market is expecting Shotspotter [SSTI] to grow fast in the coming years.

It’s obvious why expectations are high among investors when you see the value Shotspotter Inc is providing. First, gunshot detection allows police to reply when someone fires a gun versus not responding because they are unaware of the incident.

Another reason Shotspotter stock has soared is the company’s data provides intelligence to dispatching officers, who can better identify threats and locations where the public and law enforcement officials are at risk.

High gunfire areas also take a toll on local residents who are more likely to suffer from psychological trauma and post-traumatic stress disorder.

For homeowners in Shotspotter cities, the technology helps to revive local economies that would otherwise be suppressed by lower house prices, limited employment opportunities, and businesses that may otherwise shut down due to high crime levels.

Shotspotter stock price [SSTI Chart] has powered higher since its IPO as word has spread among smart investors. And as ever more elected officials and campus security companies choose Shotspotter microphones, infrared sensors and the Shotspotter app, the momentum favors more upside even if profits are as yet non-existent.

For investors a key consideration is whether the technology is actually effective in reducing crime and how easy it is to adopt by law enforcement. On those two counts, Shotspotter Inc earns high marks.

According to the company, Shotspotter cities enjoy an average 35% decrease in gunfire volume in the first 2 years. And Shotspotter technology extends to mobile, so law enforcement personnel receive real-time mobile alerts on smartphones and tablets.

For first responders, the ability to pinpoint precise locations is critical to better assisting victims, scouring for evidence, and interviewing witnesses.

For cities who do adopt the SaaS technology, the Shotspotter cost is reported to be $189,000. Clearly that’s a price tag which causes revenues to soar for each city that chooses it. And for investors the business model is attractive because revenues are likely to recur year after year.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.