ShotSpotter Signs Multi-year US$23-million Contract with Chicago

ShotSpotter (NASDAQ:SSTI) announced on Wednesday (September 5) that it signed a US$23 million multi-year contract with the city of Chicago.

ShotSpotter, a company engaged in gunshot detection solutions, said that the contract with Chicago is for at least three years with the possibility of expanding it to five years.

The US$23 million three year contract is also set to potentially increase on contract or coverage extensions.

As it currently stands, the contract between Chicago and ShotSpotter — which was expanded in May — covers 12 police districts and over 100 square miles.

Chicago, which is now ShotSpotter’s biggest customer, credited the company in May for the decline in shooting related violence in the city.

According to the company’s press release in May, in the first four months of 2018, the city saw a 26 percent reduction in shooting incidents compared to the same period in the previous year.

“ShotSpotter has proven to be a key element of our gun violence reduction strategy and we rely on the company as a trusted technology provider to the city of Chicago and our law enforcement professionals,” Eddie Johnson, superintendent of the Chicago Police Department, said in Wednesday’s release.

ShotSpotter’s solutions works in three steps: the first is detection, where the company’s strategically placed sensors in the city filter out traffic and wind noises. From there, it looks for what the company calls it as pulses—or ‘impulsive’—sounds of gunfire.

Upon detection of the pulse, the sensors send the data which includes the location to the company’s cloud servers. Based on the preset algorithm, the company’s software determines whether the sound is a gunfire and pushes the alert notifications to law enforcements and emergency responders.

The company said that indoor gunshot alerts are pushed within 10 seconds of an incident while outdoor incidents are notified within 45 seconds.

“It is also an important milestone for our business because we now have our two largest customers, Chicago and New York City, under contract through mid-2021,” Ralph Clark, CEO of ShotSpotter, said in the release.

The company’s solutions are used in over 90 cities, claiming that officers get to the scene faster than a traditional 911 phone call.

When Chicago and Shotspotter signed the contract extension in May, Johnson said that the company’s solutions made a significant impact on minimizing gun violence in the city.

“The one technology that has made the most difference in Chicago’s reduction in gun violence in the last 12 months has been ShotSpotter – it’s a game changer,” Johnson said.

Following Wednesday’s announcement, shares of ShotSpotter were down 0.73 percent and closed the trading session at US$58.29. On TipRanks, the stock has a “Strong Buy” ranking with a high estimate of US$60 and a low estimate of US$40 based on targets set by four analysts.

Further, the stock has a “Buy” ranking on TradingView with 17 verticals in favor, four neutral and five against.

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Securities Disclosure: I, Bala Yogesh hold no direct investment interest in any company mentioned in this article.