The CAMP stock price prediction article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

• The Telematics Industry is not pandemic resistant. Cal/Amp saw its Q4 2020 Telematics revenue drop almost 20% year-over-year to $52.4 million.
• COVID-19’s headwind on Telematics is why CAMP has not yet recovered to its February highs of $10 price levels. 
• CalAmp’s stock will continue to linger below $9 this year because there’s no COVID-19 vaccine coming soon. This is good for value investors looking for a cheap bet on the fast-growing Telematics industry.
• Go long on CAMP while it still trades at just 1.23x Forward EV/Sales valuation. This company can survive pandemics. Its Telematics business will recover after COVID-19 gets neutralized.
• CalAmp will again return to profitability after companies starts adapting efficiently to a pandemic-affected business climate.

The stock of CalAmp Corporation (CAMP) is now trading at $7.50. However, this is still way below its 52-week high of $12.32. CAMP’s 1-year price return is still very painful at -29.62%. CalAmp’s stock has not yet recovered from its pandemic sell-off beating last March. CAMP’s YTD return is still -19.62%. CalAMP is certainly headed more downside because its Telematics business has a headwind from COVID-19 pandemic. The company’s Q4 2020 earnings report showed its core Telematics business saw a 19.8% year-over-year decline to just $52.4 million. Continuing travel restriction and quarantines around the world will keep Telematics solutions provider like CalAmp struggle for the rest of 2021. 

What Investors Can Expect

The COVID-19 headwind on trucking and goods transportation means CAMP will likely suffer one or two more quarters of net losses. The pandemic handicap convinced me that CAMP will have a hard time bouncing back to $9.50 this year. On the bright side, CAMP’s beaten-down valuation could be an opportunity for value investors looking for affordable Telematics-related stocks to buy. The global pandemic should not put wool in our eyes. Telematics is a fast-growing industry that will be worth $320.60 billion by 2026. This industry is growing at 26.8% CAGR from 2019 to 2026. It is a window to the future multi-bagger potential of CalAmp. 

CAMP is a good value play for the long-term. Exploit this stock’s current affordability. Going forward, bulls will go on parade behind CalAmp Corporation again after this pandemic gets a vaccine solution. CAMP will bounce back to above $9 early next year if it can get back to profitability. The best thing to do now is to be bold and take advantage on the low valuation ratios of CAMP. 

Seeking Alpha’s AI algorithm gives CAMP a Value Grade of B+ because of its lower-than-industry-average forward EV/Sales (1.23), Price/Sales (0.82), and Price/Book (2.19) valuation ratios. Any company that has lower valuation ratios than its sector peers automatically qualifies as a value-bet. 

CalAmp Can Prosper

Yes, CalAmp Corporation is small player on Telematics. However, small companies can grow bigger once more industries adopts Telematics not only for their transport vehicles but also for their employees. Employee monitoring will help companies monitor the productivity of their employees. This can help companies weed out and replace recalcitrant employees. CAMP is a buy because it can really grow its revenue faster if only more corporations and government agencies starts implementing Telematics technologies to improve their human resources pool. 

We should bet on CAMP because the future scenario says it can improve its annual sales within the next 2 to 3 years.

Investors are still down on CAMP because COVID-19 is making it more difficult for the company to achieve $500 million in annual sales.

On the other hand, CAMP is still worth buying if it still focus on just connected cars and transportation logistics. CalAmp is at the forefront of connected cars and smart goods transportation. These two nascent industries will eventually be the biggest growth drivers for Telematics. Yes, the Telematics industry is crowded and competition is very stiff. However, the global telematics industry is big enough to let a small firm like CalAmp Corporation prosper. 

Conclusion

It is not risky to invest in a beaten-down stock like CAMP. It is more like investing cheap on a company that has obvious growth potential. If it was not for COVID-19, CAMP would still be trading at above $10 today. CalAmp Corporation deserves our support in its time of difficulty. We help this company overcome this pandemic by going long while the general investing public is avoiding it.

CalAmp Corporation also has a healthy balance sheet. It can overcome a two or three quarters of net losses. Its total cash & short-term investments is $107.4 million. This is far greater than CAMP’s total debt load of $11.9 million. The TTM free cash flow is $12.9 million. 

My buy recommendation for CAMP is also largely influenced by its super bullish one year forecast score from I Know First. The AI stock-picking algorithm of I Know First also has a high 0.68 predictability score for CalAmp Corporation’s stock trend over 12 months duration. We better heed what I Know First is telling us. CAMP is a buy right now. 

EMA analysis also points to a buy signal for CAMP. We can bet on the EMA momentum of CalAmp’s stock. CAMP is a swing trader buy right now because its 5 day EMA price has crossed above its 13 day and 20 day EMA. 

Past I Know First Success with CAMP Stock

I Know First produced a bullish CAMP stock forecast on April 26, 2020. The I Know First algorithm issued a bullish one month forecast for CAMP with a signal of 1.42 and a predictability of 0.40, the algorithm successfully forecasted the movement of the CAMP share.  After a month, CAMP shares rose by 31.97% in line with the I Know First algorithm’s forecast. See chart below.

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