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Small-Cap Confidential
Undiscovered stocks that can make you rich

February 19, 2021

Everbridge (EVBG) reported Q4 results yesterday that exceeded expectations on both the top and bottom lines and have sent shares soaring over 20% to a new all-time high this morning. Part of the reason is that the stock has been consolidating forever and is one of the few high-growth software stocks that has not traded at a crazy valuation. Today’s move may be the beginning of a reset to a sustained higher valuation (hopefully).

Everbridge (EVBG) reported Q4 results yesterday that exceeded expectations on both the top and bottom lines and have sent shares soaring over 20% to a new all-time high this morning. Part of the reason is that the stock has been consolidating forever and is one of the few high-growth software stocks that has not traded at a crazy valuation. Today’s move may be the beginning of a reset to a sustained higher valuation (hopefully).

The headline numbers are that revenue was up 32.4% to $3.1 million while adjusted EPS of $0.03 beat by $0.01. For the full year, 2020 revenue was up 35% and adjusted EPS loss for the year was -$0.01. The company ended the year with $467 million in cash, 5,613 global enterprise customers (up 12%) and sent 5 billion interactions over its platform, up 40%. For 2021 management’s initial guidance is for revenue growth of 26% to 27% ($342 million to $344 million), modestly above expectations, though ongoing investments will drive an adjusted EPS loss of around -$0.20 versus expectations of a modest profit. Of note here, investors have generally looked favorably upon companies that are investing in growth these days.

Management also announced a statewide deal with Oregon for the CEM platform, the company’s seventh statewide deal. There were also 18 new CEM deals in Q4 bringing the total up to 128, a nearly 70% increase over 2019. CEM also launched in Europe a few months ago and the pipeline there should be building.

The bottom line here is things look good and it is increasingly probable that Everbridge is getting back in the groove and 2021 could be better than expected. I’ve had the stock at buy and think there’s a good chance EVBG can move up toward 200 in the coming months. That said, we have seen the stock pop after other earnings releases only to fizzle afterward. All things considered right now let’s enjoy the gains and sit back and see how this earnings report is digested. Our remaining position is now up over 1,000%. Moving to hold. HOLD