NexTech AR Solutions Corp (CSE:NTAR) (OTCQB:NEXCF) shares could surge in value over the next year if analysts at Starwood Research are correct.
The firm tagged NexTech with a $20 price target over the next 12-months, calling the augmented reality firm a “unicorn farm” with four shots on goal at multi-billion dollar markets, including its ARitize ad network, Capture AR, a concept it calls v-commerce and its pending acquisition of Jolokia.
The firm set that target back in January, and reiterated it on April 1 after shares dipped due to a battle with short sellers and the broad market dip due to coronavirus. The stock currently trades around US$0.90 a share in New York and C$1.30 in Canada.
“We believe NEXCF is under-valued based on it’s strong growth fundamentals,” Starwood wrote. “The stock is now even better positioned for a potential upside to $20 — as the company’s AR business is perfectly aligned with the new coronavirus theme of remote working/AR-powered “try it on” e-commerce, and training.
“The new (pending) acquisition of Jolokia — a remote work/learning has the potential to increase NEXCF valuation by an extra $300 million ($5/share), as investors start to understand NEXCF parallels to remote work/learning peer group comp Zoom Inc — which trades at 31x revenues, at recent $132/share.”
NexTech actually has added Zoom Video Communications (NYSE:ZM) technology into the mix, using Jolokia to effectively extend the range of video conferences to 100,000 people at once. Going forward, the plan is to “turbocharge” the platform with AR and hologram technology, Starwood noted.
Starwood was also impressed with NexTech’s ARitize 3D AR 360 ad network, calling it a potential game-changer for the $200 billion online ad industry.
NexTech’s technology creates interactive photorealistic 3D ads, allowing customers to view products in full 3D, which drives higher levels of engagement.
“The big idea here is that NEXCF’s AR and VR applications for commerce and online advertising are a potential game-changer for these massive markets — because they help e-commerce businesses achieve the ‘holy grail’: increasing sales while reducing product returns,” Starwood wrote.
For brick and mortar stores, NexTech is also involved in what it calls v-commerce, which Starwood believes could transform the $3.7 trillion retail sector.
The technology can create a virtual store in which customers can “try on” and buy products virtually in 3D. Its VRitize platform will include an app for both iOS and Android, which will work on VR headsets.
This would allow any store with a pair of VR goggles to create a virtual store for its customers.
Additionally, NexTech’s Capture AR 3D app will allow users to create their own 3D images in less than two hours with just a smartphone and without requiring any technical knowledge, making AR dramatically more mainstream.
The company hasn’t said how it will monetize the app, but if it charged 100,000 users $9.95 per month, it could have a $250 million annual revenue generator on its hands.
NexTech is still a relatively undiscovered stock, subject to volatile swings, Starwood said.
“The stock has captured the imagination of speculative traders, as can be seen by the recent trading action,” Starwood said. “A look at NEXCF stock chart clearly shows the stock reacting strongly to any positive news, with parabolic price jumps on high volume. This is often followed by profit taking sell-offs. For better or worse, NEXCF is becoming a trading vehicle, akin to a micro-cap version of TSLA.”
What could change the game for NexTech is uplisting to the Nasdaq, which Starwood believes is possible within the next nine months.
Furthermore, the firm has confidence in CEO Evan Gappelberg.
“Another common denominator with TSLA is NEXCF’s charismatic CEO, who brings to the table a successful track record in creating shareholder value, who has a big vision — and excels at sharing this with investors,” Starwood wrote. “For investors who are looking for a moonshot 10x+ opportunity, NEXCF is a compelling proposition.”
Contact Andrew Kessel at [email protected]
Follow him on Twitter @andrew_kessel