Seeking Alpha

Control4 adds to gains with Dougherty's help, Echelon retreats

  • Control4 (CTRL +16.9%) is now up 62% since Google announced its $3.2B acquisition of Nest on Monday afternoon, as hopes grow another tech giant will decide to acquire the home automation hardware/software vendor in response to Google's move.
  • Today's gains are coming with the help of a bullish coverage launch from Dougherty: The firm argues Control4's broad product line and affordable pricing are "designed to move home automation from a niche market of high-end homes into the mainstream."
  • Control4's market cap ($674M) remains barely 1/5 of the valuation assigned by Google to Nest, and its price/sales multiples are doubtlessly much lower (shares currently go for 4.5x 2014E sales). But its growth rate is also likely much lower than Nest's (sales are expected to rise 17% in 2014).
  • While Control4 continues surging, age-old home/industrial automation play Echelon (ELON -8.8%) is giving back a chunk of yesterday's big gains.
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