The Best and Worst Performing Security Stocks of 2017

SSI’s annual summary takes a look at the strong performance of publicly-traded electronic security companies in 2017. The solid run follows a comparable ascending market sector posted the previous year.

The Best and Worst Performing Security Stocks of 2017

Underperforming Security Stocks

Anixter (NYSE: AXE)

  • 6.2% stock price decline, $81.05 to $76
  • EV/EBITDA declined from 10.6x to 9.5x
  • The company expects 2017 revenues to increase by 3.5%, with EBITDA to climb by 4.7%

Ascent Capital Group (Nasdaq: ASCMA)

  • 29.3% stock price decline, $16.26 to $11.49
  • EV/EBITDA remained relatively constant for the year moving from 6.1x to 5.9x
  • Revenues fell by an estimated 2.3% to $557 million. EBITDA fell slightly from $311 million to $309 million. At the end of 2017, Ascent had debt of approximately 5.6x EBITDA.

CyberArk Software (Nasdaq: CYBR)

  • 9% stock price decline
  • EV/EBITDA declined from 30x to 20.6x
  • Revenues grew by 18.6% to $257 million, and EBITDA by 32.8% to $56 million.

F5 Networks (Nasdaq: FFIV)

  • 9.3% stock price decline
  • EV/EBITDA declined from 14x to 8.7x
  • Revenues grew in 2017 by just 3.2% while increasing EBITDA by 35.8% to $829 million.

Gunnebo

  • Stock price decline, $4.25 to $4.12
  • EV/EBITDA increased from 7.2x to 8.7x
  • EBITDA declined by 15.4% to $50 million. For the year revenues increased by 9.3% to $733 million.

IndigoVision (LON: IND)

  • 25.2% stock price decline, $2.05 to $1.53
  • EV/Revenue decline from .2x to .1x
  • Revenue declined from $46 million to an estimated $43 million as EBIT-DA turned negative in 2017 as well.

Johnson Controls (NYSE: JCI)

  • 7.5% stock price decline, $44.19 to $38.11
  • EV/EBITDA multiple decreased from 14.7x to 10.4x
  • On the heels of its 2016 merger with Tyco, JCI estimates 2017 revenues of $30.1 billion
  • Reported EBITDA grew by 27.4% from $3.8 billion to $4.8 billion

2017 Security M&A OVERVIEW

In 2017, mergers and acquisitions activity remained robust in the security industry. What follows is a selection of notable transactions by industry sector.

Access Control

Fire/Life Safety

Video Surveillance

Identity

Systems Integration

  • Private equity backed Convergint Technologies continued its system integrator consolidation effort as it completed its 14th acquisition within 24 months in December 2017 with the purchase of Genesis Security.
  • ADT acquired three security systems integrators in 2017, including Gaston Security, MSE Corporate Security and Protec, as it built out its integrated solutions division.

Cybersecurity

  • ID Watchdog was acquired by Equifax (NYSE: EFX) for $63.5 million in a consumer identity theft protection sector deal. This transaction came on the heels of the acquisition of consumer identity theft protection provider LifeLock by Symantec (Nasdaq: SYMC) for $2.5 billion.
  • Honeywell acquired cybersecurity company NextNine in a deal high-lighting the convergence of physical and IT security.
  • ADT continued to build out its portfolio of IT security services with a deal for Datashield, a company that now operates under the brand ADT Cybersecurity.

Alarm Monitoring

Canadian telecommunication and media company BCE acquired AlarmForce for $202 million or 3.9x revenue.

Home and Building Automation


Thomas McConnell is Managing Director of Capstone Headwaters, an independent, middle market investment banking firm based in Denver.

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!

Subscribe Today!

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Newsletters