Investment in the booming artificial intelligence (AI) sector is more than warranted; it's advised. And that's no longer a secret. If it was, investors wouldn't be paying up to hundreds of percent more for companies like NVIDIA (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Palantir (NASDAQ: PLTR) compared to where they could have bought just a few months ago. But even at these higher levels, many analysts still call many of these high flyers bargains, with forward-looking revenue models supporting their bullish sentiment. But there's excellent news for investors who missed taking advantage of the presumed sector leaders.
Compelling value investment opportunities still exist. And better yet, can be taken in companies that are also pioneering change fueled by AI-empowered assets. LZG International Inc.(OTC Other: LZGI), also known as FatBrain AI, is one of them. And at roughly $1.18 a share on Monday, it presents a valuation disconnect between assets and share price worthy of more than consideration; it's actionable. In fact, investors won't find many stocks that posted FYQ4 revenues of over $24 million trading at its levels. Moreover, LZGI's 155% increase over its Q3 comes with something else- momentum.
LZGI Posts Significant Q Over Q Revenue Increase
That matters. And current prices indicate the window of opportunity is wide open. But likely not for long. FatBrain AI, the leader in powerful and easy-to-use AI solutions for the enterprise stars of tomorrow, is posting very impressive revenues. They are indeed much better than one would expect for a roughly $1.00 stock. Preliminary revenues for its FYQ4 are estimated to be $24.5 million, an over 155% increase to the $9,563,004 published in Q3. On a comparative same-quarter basis, growth is stunning, with that difference scoring an 18,852% increase from the $129,272 recorded last year.
The full year didn't disappoint, either. Revenue for the entire year ended May 31, 2023, is expected to reach upwards of $44 million compared to $216,166 during the prior year. That's an over 20,254% increase. Moreover, revenues are increasing consecutively, a measure often watched by savvy investors. That's just one number attracting the LZGI bulls. Gross margins are expected to be in the 80% range, significantly higher than its prior fiscal year, where margins were compressed from a legacy contract. In other words, revenues will fall faster toward the company's bottom line. And with organic growth scoring revenue records combined with a large number of potential new clients and potential accretive acquisitions in play, there could be a lot more of them.
Growth is no coincidence. LZGI is creating value from new initiatives to commercialize the regional cloud and small and medium-sized enterprises (SMEs) marketplace in specific geographies. That includes creating and releasing products for SMEs to protect, predict, and increase cash flows using peer intelligence and market data to bridge the technical divide. They provide what clients need: an ability to improve business decisions and strategies informed by data analytics. Providing that difference to clients can be invaluable to driving revenue and success. Much more supports the Fatbrain AI value proposition.
New Products That Are Game Changers For SMEs
Fatbrain innovation is further exemplified through the soon-to-be-launched FatGPT™, a product offering SMEs the ability to do, in seconds, what used to take hours, including getting critical insights across all their SaaS data. This will enable more efficient and timely business decisions using small, private data. The offering is built upon the demand highlighted by Open AI's ChatGPT, so expect it to be a significant value driver.
There are others, and they are keeping the company bullish on its near-term prospects. Peter B. Ritz, co-founder and CEO of FatBrain AI, said, "Our revenue ramp and order flow make us optimistic about the future. The platform we continue to build positions FatBrain AI as the preferred solution for the enterprise stars of tomorrow. We are focused on accelerating growth supported by the industry tailwinds and our suite of products. We remain on track to continue the momentum." FatBrain's AI 2.0 technologies and advanced data services fuel that proposition.
The differences provided are advantages. As importantly, FatBrain AI is in business to deliver its robust AI solutions to the masses and level the competitive playing field by providing AI solutions once reserved for the industry behemoths. As evidenced above, that opens the door to no small revenue-generating proposition. On the contrary, already impressive LZGI revenues could surge exponentially by focusing on and earning business from the millions of companies needing what they sell.
Thus, in addition to LZGI becoming a bigger company faster, investors may also benefit from higher valuations that would likely follow. Considering current valuations neglect a portfolio filled with intrinsic and inherent value, those gains could be appreciable.
Fatbrain AI Brings AI Solutions To The Mainstream
That's not an overzealous presumption, considering few, if any, arguments can be successfully made against the AI sector being one of the most significant technological revolutions ever. And, of course, those companies leading parts of the revolution can and likely will be the most rewarded.
In other words, individual businesses can shine in different focus areas, and those blazing their own trial certainly will be better positioned to capitalize on and maximize market opportunities than those in the herd. That's precisely what FatBrain AI is doing by designing, integrating, and implementing AI solutions, enabling organizations of any type and size to simplify decision-making and effectively harness data to grow, save, and do better business. By the way, those thinking that LZGI has put itself into a crowded, competitive landscape by targeting the small and medium-sized business sectors have it wrong. The more accurate assessment may be that LZGI is focused on monetizing opportunities where others aren't.
That's excellent news for LZGI, its clients, and investors. The critical component to making things "excellent" for all is the FatBrain AI clients. And it doesn't appear that LZGI is focused elsewhere. In fact, clients already appreciate FatBrain AI because it equips them with simple-to-use AI solutions that help them reclaim time, save money, and boost their bottom lines. Moreover, while providing an immediate impact on their performance today, leveraging FatBrain AI solutions empowers them to become the star enterprises of tomorrow (aka mSMEs) and to grow, innovate, and participate in a connected global economy.
Hence, a winning proposition for LZGI clients can be a direct value driver for investors. That makes sense. Higher revenues while keeping costs and capital structures in check typically help increase share prices. And those companies, like LZGI, selling compelling technology paving the way for how global business connects to facilitate a borderless economy, will likely see that result. And there are plenty of opportunities.
LZGI Targets No Shortage Of Opportunity
It's estimated that over five hundred million mSMEs need what LZGI sells. In fact, getting those solutions could eliminate many, even most, of the business challenges and problems that have troubled business owners for decades, including having too much data to process, too many variables to decipher, and insufficient time to do it. Those limitations cost small businesses money and lengthen the distance between themselves and competitors using AI. But that no longer needs to be the case or the norm. Thanks to FatBrain AI 2.0, client companies are provided an opportunity to solve these once-restrictive problems by harnessing the power of AI and maximizing insights learned from individual behavior and market data.
The potentially better news for clients is that they don't need to understand the technology, so to speak. FatBrain AI does all the heavy lifting. Its AI 2.0 technologies and advanced data services transform continuous learning, narrative reasoning, cloud, and blockchain technologies into auditable, explainable, and easy-to-integrate AI solutions. Simply put, it's "next-generation" AI, a more explainable, robust, open, and general AI that can effectively integrate data-driven machine learning approaches (bottom-up) with knowledge-guided methods (top-down). It's also accessible and affordable.
FatBrain AI's company-specific business model allows clients to deploy its advanced AI solutions quickly and easily, securely utilizing them on-premises behind their firewalls or via the cloud. Its growing global footprint is already helping businesses grow more efficiently and profitably worldwide. That's shown by LZGI's business presence in the U.S., India, Kazakhstan, and the UK, utilizing FatBrain AI Peer Intelligence that connects to existing SaaS products, where all business data lives, and aligns it with millions of relevant market signals. That includes collating different data sources, mapping against thousands of market data, and providing industry-specific data and insights.
That impressive start on the world stage is helping pave a road to more significant expansion. Few argue that LZGI's business footprint won't grow considerably in the coming quarters.
Momentum Into The New Fiscal Year
Quite the contrary. Scoring massive growth during its last fiscal year has positioned LZGI ideally to continue its record-setting performance. Better yet, focusing where others aren't allows them to price more aggressively to maintain their expected 80% margins. And keep in mind that much more may contribute to the company's growth. Acquisitions are always in their crosshairs, and with revenues now in the tens of millions per quarter, they may be much easier to come by.
Thus, plenty supports the case that LZGI is entering a growth spurt that can deliver significant gains for itself and much higher sustainable value for shareholders. They, indeed, have found a recipe for success. More importantly, they are capitalizing on opportunities that can transform them from a micro-cap into a small cap faster than many expect. That means a market cap of $250 million or more could come sooner than later. It's a speculative and tall order that won't happen overnight.
However, on pace to score many millions in revenues in its new fiscal year justifies the bullish expectation. It also supports the proposition that at current price levels, LZGI stock is more than cheap; it presents a value too good to ignore.
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