02 Feb 4 Technology Stocks to Buy for Higher Returns!
Technology Industry has been focused on minimizing the impact of COVID-19 and marching ahead with its innovations and breakthroughs, be it critical components for semiconductors, cutting-edge data analytics or medical devices.
We take a look at some tech companies that are impervious to the scare and offer a very attractive upside in the long run. These companies not only have an excellent potential for growth and returns but have major upcoming catalysts such as contract awards, new products and services, growing client base or even global expansion plans lined up for the future.
Market Cap: $2.10B; Current Share Price: 34.12 USD
Data by YCharts
Lemonade offers AI-powered insurance services that encompass renters, homeowners, car, pets and life insurance. The Company’s insurance carriers in the U.S and EU use bots and machine learning to provide quick and efficient services with minimal paperwork. The Company is leveraging its expertise in Artificial intelligence and machine learning to revolutionize the insurance industry. Lemonade also donates leftover premiums to charities of the customer’s choice through its annual Lemonade Giveback event. The aim is to build a transparent and conflict-free business model that changes the negative image associated with insurance.
As per its Q3,2021 financial results, the Company reported an 84% YoY increase in In Force Premium (IFP) at $347 million, while premium per customer increased by $254, denoting a growth of 26% YoY. The Company’s customer base increased to 1,363,754, growing by 45% YoY and the gross earned premium grew by $80 million from $43 million in Q3,2020 to $80 million in Q3,2021. The Company achieved $ 50 million sequential increase in IFP, marking the third consecutive record quarter attributed to increase in advertising investment. The business is also witnessing increasing prevalence of bundling and improving loss ratios in its new businesses. There was a record volume of gross new renters’ business, which increased by more than 25% when compared to Q2,2021. Non-renters’ share in the Company’s business mix is up to 47%, while life insurance is at 2% and homeowners’ at 30%. The pet business grew by 15%.
The guidance for Q4,2021 expects In force premium of $380 – $384 million, Gross earned premium of $88 – $89 million, revenue of – $89 million, while full year 2021 In force premium is expected to be $380 – $384 million, Gross earned premium of $291 – $292 million and Revenue of $126 – $127 million. The Company has reduced the FY 21 EBITDA guidance range by $12 million due conservatism on marketing efficiency and costs associated with the launch of Lemonade Car.
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The Company launched Lemonade CAR, an automotive insurance business and acquired Metromile (NASDAQ: MILE), a pay-per-mile insurer, marking its first acquisition to bolster its nascent auto-insurance business. The deal will see shareholders of Metromile receiving common shares of Lemonade at a ratio of 19 to 1. The deal is valued at $500 million. Lemonade expects the deal to be transformational for its car insurance business as it believes that it has the potential to have significant impact on three major parameters namely collapsing time, flattening risk, and increasing efficiency.
Amesite Inc (NASDAQ: AMST)
Market Cap: $18.49M; Current Share Price: 0.8409 USD
Data by YCharts
Amesite, is an educational technology firm that is leveraging the power of Artificial Intelligence, to create leading-edge learning solutions for businesses, higher educational institutions and K-12 education. The Company offers a platform for compliance and testing that aims to increase individual productivity and provides best-in-class analytics to measure performance. Amesite also offers the latest certifications and enables companies to overcome the limitations of conventional learning and development programs.
Amesite’s solutions help organizations offer a fully-managed enterprise learning platform, along with customized courses that cater to job-specific certifications, essential for employee efficiency. In addition, the platform allows companies to make informed decisions about the upskilling requirements of their employees by offering in-depth analytics and customizable dashboards. The Company delivers up-to-date content in a fun and engaging manner that promotes engagement.
The Company’s social media inspired interface helps attract and retain student interest, without the need for intensive training for teachers or out-dated multi-check platform solutions thereby improving speed and efficiency. Amesite ensures the highest level of compliance and security for user data and is committed to providing best-in-class K-12 Education tools that require minimal administration work and training.
In addition, the platform also provides an on-demand AI powered article feed that offers the latest content and also enables institutions to set automated reminders and notifications. There is a provision for skills-base grading and easy assessment through sophisticated grade books and customizable histogram and advanced data analytics that offer actionable insights and trackable performance.
Furthermore a report by Grand View Research estimates that the smart education market will reach $680.1 billion by 2027, growing at a CAGR of 17.9 percent from 182.8 billion in 2019. The emergence of a need for distance learning tools owing to COVID-19 will provide further impetus to the market.
The growth in the market will primarily be driven by population growth, with an estimated 2.7 billion students worldwide by the year 2035. The educational needs of such a large population cannot be addressed through conventional learning institutions, due to scarcity of resources to accommodate a large population.
STEM (Science, Technology, Engineering and Mathematics) is rapidly evolving into a very lucrative market opportunity and will be the driving force behind a potential $132.21 billion growth opportunity in the online tutoring market according to a report by Technavio. The Company is well poised to leverage its collaboration in the C2 Pipeline initiative to create and deliver courses that require hands-on, project-based learning activities in the field of STEM.
Market Cap: $2.80B; Current Share Price: 26.34 USD
Data by YCharts
C3.ai is a leading provider of enterprise software that enables digital transformation and building of enterprise-scale AI applications. The Company offers prebuilt, configurable, high-value AI applications that can be utilized in varied industries and areas such as energy management, customer management, supply network optimization among others.
As per its Q2,2022 financial results, the Company’s revenue increased by 41% YoY to reach $58.3 million, while subscription revenue grew by 32% to reach $47.4 million. Gross profit grew by 35 percent at $42.3 million. The subscription revenue constituted $47.4 million or 81% of the total revenue, while professional services revenue brought in $10.9 million or 19 % of the total revenue.
Image Source: Company
Revenue guidance for Q3,2022 pegs the revenue at $66 – $68 million, YoY growth at 34-38% and the Non-GAAP Loss from Operations at ($30) – ($26) million. The estimates for financial year 2022 expect the total revenue to be $248 – $251 million, YoY growth to be 35%-37% and the Non-GAAP Loss from Operations to be at ($108) – ($100) million.
Artificial Intelligence is witnessing burgeoning demand and gaining wide scale acceptance owing to the humongous amount of data being generated by new age organizations. There is a growing need for tools that enable advanced data interpretation, and offer valuable insights, that can be used for serving both internal as well as external customers better. According to a report by Markets and Markets, the artificial intelligence as a service market is expected to reach USD 10.88 Billion by 2023, growing at a CAGR of 48.2%, from USD 1.13 Billion in 2017.
The Company has expanded its relationship with Baker Hughes Co, increasing the contract value by $45 million to $495 million, revising its term to 6 years from five, with an assurance of minimum $357 million of revenue over the next 3.5 years. The Companies had originally formed a joint venture in June 2019 for marketing and deploying C3.ai’s AI technology into oil and gas businesses. The restructured deal enables the company to obtain a guaranteed revenue and realign their sales efforts.
C3.ai’s Remaining Performance Obligations (RPO) increased by 74% YOY to reach $529.3 million on a non-GAAP basis which indicates that the business is growing, however there are concerns that the new business is entirely driven by the expansion of contract with Baker Hughes.
The Company is helmed by an experienced management team with the founder Tom Siebel having previous experience working for oracle and founding Siebel Systems. This experience will prove valuable in handling the challenges posed by a burgeoning market.
SaaS (Software-as-a-service) is making inroads and revolutionizing the idea of how business is conducted. Information storage and access remains a very crucial requirement for the success of any entity, hence the need for a faster, convenient and cost-effective solution is the need of the hour. This is especially true in case of utilities management as data that they generate is humongous. According to a report by Fortune business insights, the global SaaS market size is expected to reach $716.52 billion by 2028, growing at a CAGR of 27.5% from $130.69 billion in 2021.
Market Cap: $140.86M; Current Share Price: 5.61 USD
Data by YCharts
iCAD, a premier medical technology Company providing cutting-edge cancer detection and therapy solution is leveraging its supporting ProFound AI platform, an FDA-cleared, CE marked world-class AI powered breast health solution that is revolutionizing screening and detection of breast cancers. ProFound AI Risk, a first-in-class clinical decision support tool that leverages data from a screening mammography to offer a highly accurate short-term risk estimation based on specific individuals.
In January 2022, the Company’s breast artificial intelligence (AI) platform that includes ProFound AI®, was granted an authorized to operate (ATO) status from the U.S. Department of Defense (DoD). This will enable iCAD to offer its technology at more than 500 DoD hospitals, inpatient facilities, ambulatory care and occupational health facilities worldwide.
Profound AI is revolutionizing Digital Breast Tomosynthesis by offering a concurrent-read, cancer detection solution that can quickly analyze tomosynthesis images and spot malignant soft tissue densities and calcifications with great precision. The tool, previously known as PowerLook Tomo Detection 2.0, uses deep-learning and artificial intelligence, to improve clinical reading for radiologists, and in turn improves cancer detection and reduces false positives. The algorithm can be easily integrated with existing digital breast tomosynthesis systems and has been cleared by the FDA, is CE marked and has been awarded a Health Canada license as well.
The technology provides unmatched clinical performance benefits such as 8.0% average increase in sensitivity, 6.9% average increase in specificity, 7.2% average reduction in recalls and 5.7% average improvement in radiologist AUC. Furthermore, it also reduces reading time by 52.7% and helps prioritize caseloads by using Certainty of Findings scores. Certainty of Finding and Case Scores are computed by the algorithm and range from 0% to 100%.
The Company’s range of AI-based clinical decision tools include Profound AI for Digital Breast Tomosynthesis (DBT), the first AI cancer detection software for DBT cleared by the FDA, along with ProFound AI for 2D Mammography and PowerLook Density Assessment that provide breast density assessment solutions.
The system is trained using a large DBT database that can accurately analyze each image or slice and offer information such as Certainty of Finding and Case Scores, thereby improving clinical decision-making. The algorithm is continually updated and is compatible with leading DBT and digital 2D mammography systems.
The Company intends to leverage its two core technologies to address a large Total Addressable Market for Clinical AI as well as Radiation Therapy. The demand for advanced cancer screening and therapy solutions offers lucrative opportunities for growth and expansion. iCAD sees a huge market for expanding its IORT applications globally, besides advancing and expanding its core technologies to serve newer indications and geographies.
iCAD is part of major national accounts like HCA Healthcare, Acurity, Premier, Tenet Health and Northwell Health among others and has a promising reimbursement landscape that focuses majorly on value-based care.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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References
https://www.icadmed.com/assets/dmm252_profound_ai_for_breast_tomosynthesis_revb.pdf
https://www.xoftinc.com/xoft-system.html
https://s24.q4cdn.com/139015699/files/doc_financials/2021/q3/Q3-21-Shareholder-Letter.pdf
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