The Long Case for Identity Security Via ActivIdentity (ACTI, RSAS, SCUR, VDSI)

by: Envoy Global Research

ActivIdentity (ACTI), at its current price of about $4.37, represents a low-risk investment, with substantial upside price potential in the next two to three years, as the company capitalizes on new growth opportunities in the digital identity assurance market, under the guidance of the new CEO, Jason Hart.


The current stats on ActivIdentity are as follows:

  1. Share Price at time of writing: $4.37
  2. Shares Outstanding: 45 million fully diluted
  3. Market Cap: 197 million
  4. Net Cash: 145 million
  5. EV (Enterprise Value or Market Value of company minus cash + debt): $52 million
  6. Last Year Sales: $42 million
  7. Last Year Free Cash-Flow: Negative $32 million
  8. Last Year Cap-Ex: $1 million
  9. EV/Sales: 1.25
  10. EV/FCF: N/M

Description of Business

ActivIdentity is a global leader in digital identity assurance solutions that allow customers to issue, use and manage trusted digital identities to enable secure transactions, communication and access to information. Our solutions include secure remote access, enterprise single sign-on, enterprise access cards, and multi-channel identification and verification. We provide software and hardware products that authenticate the user to a network, a system, applications or a facility. Our products provide authentication through different security devices, such as smart cards, tokens, biometric devices, mobile phones, and personal digital assistants. This enables organizations to confirm identities before granting access to computer networks, applications, and physical locations. Globally, over ten million users at corporations, government agencies, and financial institutions use our solutions to safely and efficiently interact electronically.

The company´s website at: provides a good summary of all the company´s products. However, we think it is most important to understand that the company is targeting the online identity assurance market, which is clearly a huge growth market given the tremendous security threats of identity theft both within businesses and in sales directly to consumers. We think that this quote from the company pretty much sums up the value proposition of the business:

"ActivIdentity will provide individuals with the same level of confidence in electronic interactions as in face to face transactions by integrating identity assurance services into the infrastructure,