If you’re looking for a beaten-down Canadian tech stock with the kind of long-term growth story that could reward patient investors for decades, Gatekeeper Systems (TSXV:GSI) deserves your attention right now. GSI stock is sitting about 63% below its 52-week high. But peel back the recent price action and what you find is a business hitting its stride.
Gatekeeper protects children on school buses and passengers on public transit using AI-powered video systems. It has a 22% seven-year revenue CAGR (compounded annual growth rate) and more than 200,000 devices deployed across North America, and it just landed a contract with the largest transit authority in the United States.
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The bull case for the TSX tech stock
Gatekeeper sells a full ecosystem that includes hardware, AI software, and cloud-hosted video management services, all on a platform-as-a-service model. Think of it as a SaaS company wrapped around a hardware business.
Each new vehicle installation generates recurring monthly subscription revenue.
The company currently runs a 70% gross margin on those hosted services and is targeting 90% over time. That’s the kind of margin profile that makes investors take notice.
In fiscal 2018 (ended in August), Gatekeeper had 22,000 Mobile Data Collectors deployed. By fiscal 2025, that number had grown to 65,000. More devices mean more monthly contracts, more data, and more recurring revenue.
The flywheel is spinning.
For years, Gatekeeper was known primarily as a school bus video company, and that’s changing fast.
- In September 2025, Gatekeeper was awarded a $27 million contract with the MTA’s Long Island Rail Road: the busiest commuter railroad in North America, carrying 250,000 riders each weekday. That contract alone is worth nearly as much as the company’s entire annual revenue. And it was required for compliance with a Federal Railroad Administration mandate.
- In October 2025, Gatekeeper was named the OEM (original equipment manufacturer) video provider for Alstom’s new Citadis light rail streetcar project in North America — a $7.5 million contract. Alstom spent two years qualifying Gatekeeper before selecting it. This partnership with one of the world’s largest rail manufacturers opens the door to global distribution.
Since September 1, 2025, the company has announced $46.3 million in new contracts.
Regulation is doing the heavy lifting
One of the most compelling parts of this story is what governments are mandating.
In Canada, Transport Canada announced in February 2025 that all new school buses must be equipped with perimeter visibility systems by November 1, 2027. That affects more than 65,000 school buses and represents an estimated $196 million in spending between 2024 and 2036. Gatekeeper’s 360 Surround Vision system was used in Transport Canada’s own pilot trial.
In the U.S., the Federal Railroad Administration rule requires image recording devices on all passenger trains. Estimated related expenditures are US$300 million, according to the presentation. Gatekeeper already has about 2,800 Mobile Data Collectors deployed for SEPTA in Philadelphia, one of the largest transit authorities in the country.
These contracts are regulatory requirements with dollars attached. And Gatekeeper is already positioned as a trusted, qualified provider.
The Foolish takeaway
Analysts tracking the small-cap Canadian tech stock forecast free cash flow to increase to $19.5 million in fiscal 2030 (ended in August), compared to an outflow of $10.6 million in fiscal 2026. If the stock is priced at 10 times forward FCF, it could gain almost 50% within the next 40 months.
The Canadian stock looks undervalued given the contract momentum and regulatory tailwinds ahead. The recent price drop seems more like a window of opportunity than a warning sign.
Patient investors who buy Gatekeeper today could be looking back at this entry point very fondly a decade from now.
