There is no stopping Vuzix (VUZI) right now. The maker of smart glasses is on the rise, with shares increasing by 518% in the last 12 months.
However, Jack Vander Aarde, an analyst at Maxim, believes there is more to come. The 5-star analyst expects 2021 to “mark a turning point for significant growth”.
Vander Aarde bases his optimistic thesis on several factors.
First, the company has just released a positive preliminary update for the fourth quarter. The company expects 4Q20 revenue of more than $ 4 million, representing an increase of more than 100% year on year. After the update, the analyst increased his fourth quarter revenue estimate from $ 3.8 million to a corresponding $ 4 million.
In addition, in the past 30 days, the company’s balance sheet has been boosted by an increase of $ 28.6 million, after triggering nearly 6 million warrant exercises.
The company is also being recognized by the sector; its state-of-the-art smart glasses (NGSG) recently received 3 CES 2021 awards.
Most important of all, however, Vuzix continues to announce an “increasing number of positive updates on product launches, new customers and new vertical markets and product applications”.
On Wednesday, the company announced a collaboration with virtual care company Hippo Technologies and, earlier this month, medical technology company BioSig Technologies, said it plans to use Vuzix’s smart glasses to remotely service some of its devices.
January wins follow a plethora of new customer additions in December. The list includes Pixee Medical, European resellers, general merchandise retailers from the U.S. and “a major undisclosed international defense contractor”.
The abundance of good news results in brilliant criticism from Vander Aarde.
“We believe that VUZI’s long-term potential will be limited only by investment in sales and marketing and by expanding production capacity, which will likely take time to develop on the scale necessary to capitalize on the huge long-term opportunity,” said analyst.
Besides that, “[We] we believe it would be reasonable for VUZI to negotiate with a prize for peers, based on our view that VUZI is well positioned for 100% + multi-year revenue growth (which we consider rare) and we believe its technology and product commercially ready portfolio is ahead of competitors, which we hope will make VUZI a dominant share in the nascent and rapidly expanding market for AR / VR wearables. “
To this end, Vander Aarde reiterated a Buy rating for VUZI shares, while doubling his target price from $ 6.5 to $ 13. (To watch Vander Aarde’s track record, click here)
Most Street analysts, however, still need to board. The stock currently has only one other revision, also classifying it as Buy. The additional purchase means that VUZI qualifies with a moderate purchase consensus rating. Still, the two analysts expect the shares to remain in the same range for the time being, as indicated by the current average price of $ 12.50. (See VUZI stock analysis at TipRanks)
To find good ideas for trading stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all of TipRanks stock insights.
Disclaimer: The opinions expressed in this article are exclusively those of the analyst presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.