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As the broader equity market rout continues amid the coronavirus pandemic, Everbridge (NASDAQ:EVBG) – the company that offers software to manage and mitigate emergencies – has emerged as a rare winner for investors.
The company’s stock price rose by 1 percent on Wednesday, reaching an intra-day high of $116.21 even as the S&P 500 index plunged by 4.9 percent. Based on Wednesday’s closing price, Everbridge’s stock is up around 22 percent over the past three weeks. Year to date, the stock has offered an astonishing return of 42 percent!
As per the stock’s latest closing price, Everbridge is currently trading at a multiple of 18.1x its revenue versus a historical multiple of around 11.2x, as per FactSet data. The company’s annual revenue grew by a healthy 37 percent in 2019 which, in turn, was reflected in the stock’s 38 percent gain for the year, outperforming the S&P 500’s annual gain of 29 percent.
Everbridge’s market gains are even more impressive when investors look at the carnage that has engulfed the broader market. As an illustration, trading in the U.S. stocks has been halted twice in the current week, triggered by a 7 percent decline during the opening session on Monday and Thursday (today). Yesterday, the longest bull market in history came to an end as the Dow Jones Industrial Average plunged by 1,400 points or 5.8 percent, amassing cumulative declines of over 20 percent relative to the most recent high touched back in February 2020.
What makes Everbridge attractive to investors?
The company was formed in the aftermath of the 9/11 attack and offers a comprehensive notification system that ensures that “messages are received without fail when life safety is at risk”, as per its website.
Everbridge’s software aggregates threats gleaned from multiple data sources – including the CDC, the World Health Organization (WHO) and local and state authorities. It then provides real-time updates to the company’s clients. This functionality can be used by hospitals to prepare for emergencies and the attendant flood of patients. It can also be used by airports and local authorities to tailor disaster management plans in the event of an emergency.
Everbridge secured its largest contract back in October 2019, signing a $25 million 5-year deal with the state of California to overhaul the 911 emergency system in the western state. Recently, the company has also secured contracts in Australia, Singapore and Peru.
As far as the coronavirus pandemic is concerned, Everbridge’s solution amalgamates historical data and the pattern recognition ability of its software with a real-time alert system that publishes timely notifications, allowing local authorities to respond to emerging health crises. In recent weeks, the cities of New York, San Francisco, New Orleans, Houston and Tampa (Florida) have all deployed Everbridge’s messaging system, allowing residents to receive updates by sending a text message to a designated number. The system also sends messages through location-based targeting. So far, Everbridge claims to have sent around 15 million coronavirus-related messages on behalf of its customers.