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Fingerprint Cards – strong growth ahead for biometrics reports that the global market for biometrics technologies and applications will grow from about USD 13.7 billion in 2015 to more than USD 30 billion in 2021, according to market forecaster ABI Research.

The demand from within consumer electronics, particularly smartphones, will help drive this growth of 118 percent. Annual embedded fingerprint sensors are forecast to reach two billion by 2021 at compound annual growth rate over the period of 40 percent. That equates to shipments of about 266 million units in 2015 and of 372 million units in 2016.

As well as consumer demand for protection there is increased surveillance and ABI reckons that by 2021 one in three surveillance cameras will be IP-connected to open up pathways for biometrics and analysis.

The North America and Asia-Pacific regions dominate the sales of biometrics but ABI Research said that Latin America and the Middle East are expected to boom in biometric implementations for banking, personal finance, governmental and security applications.

Technologies include embedded sensors in consumer electronics and payment cards; four-finger, iris, and facial recognition in smartphones; and vein recognition in ATMs. Payment giant Mastercard is putting an emphasis on facial recognition.

According to ABI Research the market leaders in biometrics include: Gemalto NV, STMicroelectronics NV, Fingerprint Cards AB, and Precise Biometrics AB. As we have highlighted in the past, we think Fingerprint Cards sticks out in particular. Looking at consensus estimates for 2016, the Fingerprint share is trading at a PE-multiple of 12.5x. The 2016 EV/EBIT multiple is 10x. Given the tremendous growth, the equally tremendous future potential and very strong market position of the company, we cannot find the current valuation anything else but attractive.

During 2015, Fingerprint Cards estimated that they have around 45% market share. For 2016, the company expects the market to double in value and CEO Jörgen Lantto stated in a recent interview that  “we plan to gain share in terms of value and increase value by roughly 130-200%. So we grow faster than the market. We are on top of things.”

Nordic Investor

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