HI Richard,
Also wish you a happy 2021 - it is off to an interesting start!
I was not familiar with AY so had to do a little bit of research. Looks like an interesting little company that operates in two segments - CapitalCube and Workforce Optimization. It also owns 49% interest in Market Wall.
CapitalCube provides AI analytics to Refinitiv (one of the largest providers of market data in North America) and its been working on an a robo-advsisor ETF tool. Very interesting stuff from this area - AI is certainly the future and it operates in a niche market and expanding to rapidly growing nice markets (robo advisors).
Worforce Optimiziation is all about using data and AI to improve work efficiency, with a focus on the field service management (FSM) industry. Once again, this is a niche market but the exiting part is that if it proves the concept here, there is no reason why its platform can't be expanded to other industries.
I've said it a few times before, but I am a big fan of companies that disrupt the status quo. ALY seems to be one of those companies. One of the issues however, is does it have a viable business model? The company is not yet profitable, and there are no signs of that occurring in the near future. So let's turn our attention to sales. Revenue has been quite spotty over the past few years. In fact, it has dropped from $4.8M in 2018 to $3.6M in 2019 and is now at $3.1M over the past twelve months. Granted, this past year has been impacted by the pandemic so it is a tough comparison to make.
To be honest, I am not seeing any reason why the company's stock price has jumped so much over the past couple of weeks. There has been no news of note, nothing since third quarter results. I did however, find that Robert McWhirter spoke positive about the company on BNN yesterday which is likely why its stock price jumped by 18% today. Companies that move to such a degree on no news, but are influenced by a single analyst make me nervous. That means, the company's stock is highly volatile and has the potential to be easily manipulated. No single analyst should have that type of effect on share price.
The company is now trading at 25 times sales, and since there are no analysts that cover the company it is hard to get a handle on future growth rate. Based on its history , it hasn't been great and i see nothing from the company in the past little while that states growth is going to pick up in a meaningful way in the near to mid term.
I am not saying it is a bad company - I quite like the industry in which it operates and its focus on AI and machine learning. I'm just not convinced it has a proven business model. It is worth noting that Market Wall does appear to be growing at a much faster rate, but since it is not a publicly listed company we don't get to dig into that company in any great detail. All we get is the brief financials provided by ALY.
Overall I like it, but it is one I'd caution on given how quickly it moved as a result of one BNN appearance. Certainly one to watch, but not one I'd be jumping into here and would be ok with missing out on near term upside to get comfortable with their execution of there CapitalCube and Workforce Optimization segments.
Mat