Maxim Group Initiates Coverage Of Brand Engagement Network (NASDAQ: BNAI) With Buy Rating, Sets Over 100% Higher Price Target
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August 14, 2024 08:35 AM Eastern Daylight Time
By Anthony Termini, Benzinga
Investment firm Maxim Group initiated research coverage of Brand Engagement Network (NASDAQ: BNAI), or BEN, last week. BEN is a provider of conversational GENAI technology that provides human-like avatars that interface with consumers for enhanced experiences.
Conversational artificial intelligence (AI) has the ability to recognize, translate, predict and respond to a given customer’s written or spoken input. BEN is regarded as a leader in creating personalized AI experiences.
Maxim Group Analyst Sees Unique Opportunity In Marketplace And BEN’s Business Model
According to Jack Vander Aarde, a senior equity research analyst at Maxim Group, “BEN has emerged as a pure-play conversational AI company.” In its research report dated July 25, 2024, Maxim initiated coverage of BEN with a buy rating.
The report notes that BEN delivers a full-stack turnkey offering to businesses looking to improve productivity, performance metrics and consumer experiences. It goes on to say that, “The proliferation of generative AI is being driven by the pursuit of cost reduction, value enhancement, differentiated customer engagements, and operational efficiency benefits.”
Citing various sources, Maxim notes that the total addressable market (TAM) for generative AI is expected to exceed $30 billion by 2030. It also says that 94% of large companies using generative AI anticipate integrating voice into it within the next two years.
Maxim’s growth outlook for BEN is further supported by a recent infusion of significant growth capital from existing investors.
Research Report Provides Detail On BEN’s Operating Strengths
Maxim Group’s research report focuses on BEN’s significant market opportunities in two specific verticals; the automotive industry and healthcare.
In the automotive space, Maxim points out that BEN recently signed a five-year exclusive partnership with Automotive Financial Group (AFG). The deal leverages AFG’s ability to put BEN’s AI technology in front of more than 450,000 auto dealers, service centers and insurance carriers around the world.
Maxim believes the deal could represent up to $45 million in recurring annual revenue for BEN. The firm also noted that AFG has made a commitment to invest roughly $6.5 million in BEN over the next four years.
This “serves as a stamp of credibility and reinforces our confidence in [BEN]’s AI technology, capabilities, and leadership team,” the report said.
The other sales channel noted in Maxim’s report was the healthcare industry, where BEN has recently made significant operational strides.
The company recently achieved compliance with the Health Insurance Portability and Accountability Act (HIPAA) and SOC 2 Type 1 certification, which demonstrate its ability to meet the highest requirements for the secure handling of sensitive patient data.
The report also points out that Brand Engagement Network recently entered into three healthcare pilot programs. They include OSF HealthCare, Weill Cornell Medical Center and MedAdvisor Solutions, which is based in Camberwell, Australia.
Maxim says that the pilot programs could represent about $1 million in annual contract value and that the affiliation with MedAdvisor Solutions gives BEN access to some 37,000 pharmacies worldwide. More broadly, the healthcare vertical represents more than 145,000 potential customers, including hospitals, outpatient and urgent care facilities, physician group locations and dental offices.
Maxim’s Valuation Metrics And Revenue Expectations Offer Insight To Price Target
According to the Maxim Group research report, BEN’s stock trades at a discount to its peers based on enterprise-value-to-revenue multiples. It suggests that the stock should trade at a premium, which it justifies by BEN’s “significant early-stage TAM opportunities and our robust growth outlook.”
The investment firm projects BEN will achieve strong growth and positive adjusted EBITDA by 2027. It expects BEN’s annual recurring revenue to ramp up next year and that growth will accelerate through 2028.
Brand Engagement Network’s common stock has recently traded around $3.00 per share. Maxim set a price target of $6.00.
Investment Risks Discussed By The Analyst
The report notes that BEN is still “a pre-revenue company.” As a result, the firm assigned it a “Speculative Risk Profile” based on fundamental criteria. The risk rating applies to early-stage companies with minimal to no revenues, lack of earnings, balance sheet concerns and/or a short operating history.
Speculative stocks may not be suitable for a significant class of individual investors. But for those with an otherwise well diversified portfolio and appropriate risk tolerance, BEN might be worthy of further review.
Featured photo by TreptowerAlex from Pixabay.
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