NexTech AR Solutions Corp (CSE:NTAR) (OTCMKTS:NEXCF) shares jumped Wednesday after a bullish analyst note from Starwood Research called the augmented reality company a “veritable unicorn farm” of potential billion-dollar businesses.
The firm upped its 12-month price target to US$20 just months after initiating coverage in November with a US$5 target but said NexTech has done enough since then to justify a major bump.
“Since our initial report, less than 3 months ago, [NexTech] has delivered strong results with rapidly increasing revenues,” Starwood wrote. “However, our key impetus for increasing the upside target to $20, is NEXCF’s launch of three new AR initiatives – which we believe can be transformative for NEXCF’s revenues and valuation of the stock, over the next 12 months.”
Investors responded quickly on Wednesday, boosting shares 5.9% to C$2.86 on the CSE and 7.9% to US$2.21 on OTC Markets.
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The three verticals at the center of the valuation are NexTech’s ARitize 3D-AR-360 Ad Network, its Capture AR 3D app and “V-Commerce,” an in-store virtual reality experience.
The big idea, the firm said, is that AR and VR help businesses achieve the holy grail of increasing sales while also reducing product returns. With the addressable market opportunities for online advertising, e-commerce, and brick-and-mortar retail ringing in at US$200 billion, US$684 billion and US$3 trillion, respectively, companies that provide even modest improvements can become billion-dollar business.
“As investors start to understand the full scope, and upside potential of each of the businesses in NEXCF’s ‘AR portfolio’ – this stock will become increasingly a ‘must own’ for forward-thinking tech investors,” the firm wrote. “Add in some FOMO/Momentum, and the fuse is lit for explosive upside potential.”
—Updated to include stock movement—
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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