A Technical & Fundamental review of an emerging AI company

28 apr

PRESIGHT
PRESIGHT is a data analytics company with seemingly a niche in sports analytics but the majority of its money comes from doing digital ID services for the government of Kazakhstan. They do use the name "Generative AI" in many of their releases but it is not clear yet how that's different from what used to be called "Algorithmic" just a couple of years ago.
Either way, it is the trend for many countries in the region to use more and more of such intelligence services or "Data Analytics" as they call themselves.
See below image of PRESIGHT fundamentals overview posted on their chart.


So what explains the recent rise in stock price as much as 60% before PRESIGHT's earnings announcement? It was an expectation of revenue and income increases which drove the stock price up. The good news, is that this did happen. PRESIGH has announced their earnings for Q4 of 2023 on April 24th. They have indeed grown their yearly revenue for 2023 by 14% and increased their net income by 34% for the same year.
The bad news is that their gross income is actually much less (-33%) and their pretax income is almost the same (+5%). Translation, the difference in net income is largely accounting.
Meaning that their profit is still basically the same.
Their Quarterly EPS YoY is not useful because they went public in 2023 their earnings per share are extremely low (12 fils per share compared to 231 AED when private).
But their QoQ earnings are telling and they are down -39% for the quarter. So there is no secular growth story here.
This company is growing in business YoY but the cost of new acquired revenue is much higher which is reflected in their pretax income being almost the same. A couple of flashy stories about the UFC business and Sports Cycling here and there but nothing major changed.
The Trade:
This company is just a trade for me. I would buy it at the shown TA level by (Cyan arrow) for a bounce back up. Once I own it, I will sell some at a 20% gain and hold the rest for the stock to hit the Magenta arrow. If however it hits the magenta arrow before it dips to the cyan arrow then I will just buy at the cyan arrow and then sell at 20% gain. As for the yellow arrow, that is where some major resistance lies. It's for that small chance that the stock explodes higher because the general public drinks the Kool-aid of AI stocks and might squeeze them higher. I would ride only 10% of my position to that level with a stop loss.
Anyway this is what I am doing with my money. You do you.

29 mag

Trade attivo

Alright, entry has triggered earlier today. My level of 2.07 AED (cyan arrow) was hit as the stock made a low of 2.05. So far this is great and inline with the plan. I expect the stock to bounce back up at the next market open.

11 giu

Trade attivo

First target reached at 2.45 AED. From here I would place a breakeven stop and ride half the position to see if we can get to 2.87 AED next. At 2.87 I will sell half of my open position again and then look for the stock to hit 3.71 with the remaining shares. It's a long shot but these are the kind of moves that really build accounts. Lets see what happens. Good luck to any who took my trade.