Veritone VERI Stock Analysis: Veritone Inc. is a cloud-based cognitive software company. In other words, it is a developer of artificial intelligence (AI) platform. It develops an exclusive artificial intelligence platform for numerous markets, not only in the US, but also globally. Artificial intelligence is perceived by many as the future solution to a majority of daily or more permanent problems.
However, some ethical dangers loop by creating intelligent machines. In any case, this industry provides great potential and it is always interesting following the future trends in technology since technology affects all of our lives intensively nowadays. Personally speaking, my investment philosophy is risk-averse and my buying power small to medium. For people similar to my profile, but not limited to, VERI can be a risky stock selection, with rating BUY (4) and a 30-day volatility reaching 241.12.
Forecasts from Financial Times indicate a possible drop on VERI’s price by almost 66% in the following year, while revenues are expected to rise by almost 99%. Clearly, there is a big discrepancy here. But where does this come from? Here is the IDDA approach to developing an investment strategy for Veritone VERI Stock.
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1- Fundamental Points: Veritone VERI stock
Who are they?
Veritone’s primary objective is to transform unstructured data into structured data. To achieve that, they use their cloud-based open platform equipped with powerful cognitive computing applications. The data pool can be comprised of audio, video or information in general. In other words, their goal is to imitate human cognitive functions, such as perception, reasoning, problem-solving and prediction and integrate them into machines (computers). Due to their expertise in data analysis and processing, their services extend to providing solutions to organizations or corporations that need to analyze and organize big sets of data (audio, video, structured data). The company was founded in 2014 and their corporate headquarters are located in Newport Beach, California.
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Veritone’s key executives are its CEO, Chad Steelberg, along with the President and Director, Ryan Steelberg. Moreover, CFO Peter Collins’ work has been significant for Verizon’s evolution the last 2-3 years. The company’s revenues have been almost $9 million in 2016 and its price on NASDAQ is currently at $45.45.
Veritone’s New Product:
aiWARE: Veritone’s AI operating system provides to its clients natural language processing, face and object recognition, sentiment analysis anomaly detection and prediction, and pattern construction derived from data. They promise process speeds that exceed human brain. The AI operating system also expands to data verification and data tracking.
Who are their competitors?
Veritone’s top competitor is Quantum Corporation (NYSE: QTM), global experts dealing with scale-out storage, archive and data protection. They were founded in 1980, located in San Jose, California. Quantum Corporation generated $505 million in 2017 and is traded on NYSE at $6.12. Both companies are integrated into the Software/IT industry and their clients are quite diversified, comprising from government agencies to financial corporations.
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Important Dates: The outcomes of Veritone’s trading and operating will be known on November 15th, 2017, when the next earnings announcement will be made by the company.
|Price as of 9/29||$ 45.45|
|52 Wk Range||$ 7.76 – $ 74.92|
|Market Cap||$ 679,809,000|
Veritone was Initially Public Offered on May 11th, 2017. The number of shares offered was 2.50 million, at a price of $15.00 per share. There is no debt on the capital structure of this company, making the forecast of huge revenue growth more reasonable. Its Enterprise Value reaches $640.9 million. Due to the fact that VERI is public traded only for about 4 months, beta cannot be calculated and it’s not applicable yet. One can find a beta on Bloomberg, characterized though by a significantly high Standard Error due to the limited time the stock has been publicly traded.
The stock gained 146% since its May IPO. However, it is really early to make a judgment if this stock is volatile or not. Veritone has announced a relationship with CBS Radio to license its ad and content tracking platform and it is highly possible that has numerous radio and TV broadcasters in its sales arsenal for similar deals in the future. The industry of software and technology is definitely a growing one, if not the most growing. When it comes to artificial intelligence it can be seen that there is enormous potential. AI forms one of the most promising technology sectors. The outcomes of Veritone’s trading and operating will be known on November 15th, 2017, when the next earnings announcement will be made by the company.
2- Technical Points: Veritone VERI Stock Analysis
There is not much of a history for VERI price as they went public very recently. However, based on technical analysis on other similar tech companies, we could expect the share price to drop to all key Fibonacci retracement levels before it can make a correction. At the time of writing, the price has broken below both the 50% and 61% Fibonacci levels at $36.85 and $30.14 respectively. VERI has remained above the Ichimoku cloud. However, the Kijun line has broken below the Tenkan line on Ichimoku Kynko Hyo‘s daily setup.
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Veritone VERI Stock Analysis – Daily Timeframe
3- Market Sentiment
Rising global cyberattacks make agile IT systems necessary, and protection is vital for organizations and corporations, so there is going to be significant demand for products related to infrastructure software. Moreover, infrastructure software companies that have adequate amount of cash (Veritone has no debt, estimating 99% revenue growth) greatly outperform S&P 500, that is, VERI has significant chances to raise its price in the short-term future.
However, viewing the shorter-term time frames such as the 4-hour chart, we notice that the price has broken below the Ichimoku-cloud. This could indicate a short-term bearish sentiment in the market. A break below the pivot level of $30.14 could open doors to further drops towards the 78% Fibonacci level at $20.53.
Veritone VERI Stock Analysis – 4-hour Timeframe
Veritone VERI Stock Analysis – Investing Strategy
Concluding, VERI is a recent IPO stock, with the potential to rise. Its industry signals growth, and the company has fields to improve. It could be a great choice for people with medium-high capital available, and for people seeking risk and, ultimately, profits. Since the stock is not traded for a long period and there is no adequate historical data to analyze, the volatility may be significant, meaning that on the positive side of results the profits can be boosted.
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