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Technology Stocks : Viisage Technology (VISG) -- Ignore unavailable to you. Want to Upgrade?

To: rrufff who wrote (159)	10/9/2001 3:04:34 PM
From: opalapril	Read Replies (1) \| Respond to of 536

I don't think VISG is a flash in the pan. On the other hand, I'm not exactly sure what to make of the company's history and what seems to be the several unique opportunities for hyper-growth that lie in its immediate future, either. It's just too overwhelming. A little over two years ago the new CEO began to turn this sleepy seeming company around. By early '01 it was modestly profitable, half the revenues coming from a slowly expanding base of state driver's license and corrections department facial ID contracts. Near the end of summer, VISG won what may become a very lucrative INS contract. At the time, it seemed to me this hinted at the possibility of a potentially large new field of employee and large building security ID badges, too. Meanwhile, its Face Recognition technology (licensed from Lau, which owns 65% of VISG) had some impressive performances in competition with VSNX and other Facial Recognition companies, and at the Super Bowl. Sure, false positives and facial disguises present problems, but no ID detection system is fool-proof, not even iris-ID or fingerprints. Moreover, this is the kind of technology which, it seems to me, is likely to be improved upon by quantum leaps -- similar, in a way, to chip manufacturing. Then came September 11. If the CEO is to be believed, and he seems honest to me, the airport contract announced the other day was in the works before that. Be that as it may, the WTC disaster undoubtedly will lead to many new airport Face Recognition contracts at tens or even hundreds of airports. (What airport, after all, from Portland ME to Peoria IL or Orlando FL to Olympia WA will chance being without matching security tools in this "prolonged campaign" against terrorism?) Yesterday, the CEO said the first airport contract is worth $1.5m and VISG is adding 50 new employees. (Note: the SI profile says VISG presently has 65 employees.) If the INS and one secured airport contract require 50 additional employees, or nearly a doubling of personnel, what kind of growth can be expected should VISG win, say, a quarter of the 400-500 airport contracts that are bound to be let in the short to medium term? In everything VISG does, from Face Recognition to ID badges and state driver's licenses, it sure looks like it is embarking on a period of sustained exponential hyper-growth. Yet the share float is tiny! The company clearly has need of raising cash to fund that growth. So I would expect sooner rather than later a secondary offering, maybe even a division of the company into subparts (FR, ID badges, driver's licenses). For all of that, it's difficult to deny that VISG must have pretty keen "visibility." Taking into consideration the Administration's commitment to a "prolonged" war against terrorism, the heightened domestic security consciousness which will be with us for a long while, the dramatic improvements one can anticipate in the Face Recognition and ID badge technology, a large and expanding base of potential customers from airports to office buildings and college campuses to INS border crossing points, I'm having trouble imagining an analogous situation. BA in 1974? Not quite. AOL in 1985? Nah. MSFT in 1984? Improbable. I realize the stock has had a swift run-up in a few short days. It has to catch its breath some time soon, right? Wrong? In either event, it sure looks like a long term winner to me. Still, I can't quite accept that growth can be as fast or as easy as this picture makes it seem. Something will have to go wrong, right? Wrong? I'm stumped.