LZG International (OTC: LZGI), also known as FatBrain AI, is an under-the-radar AI sector investment opportunity not to be ignored. That’s no exaggeration of fact. Quite the contrary, noting that this roughly $0.90 stock and the company behind it are already positioned as leaders in providing powerful and easy-to-use AI solutions for the enterprise stars of tomorrow. In other words, LZGI is doing today what others still hope to do in the future: provide industry-best targeted AI-empowered solutions that enable better decision-making to meet desired outcomes.
FatBrain AI most recently announced launching its powerful AI SaaS for independent property-casualty insurance agents, IntellAgent Advisor™. That product does more than support a steepening revenue curve; it further exposes a significant valuation gap between share price, its products and services portfolio, and proven revenue growth. In fact, this product and interest alone tap into an independent agency channel that places 62% of $765 billion P&C insurance written in the US. While presenting enormous opportunities there, the revenue-generating potential will also include those from this channel placing nearly 88% of all commercial lines, comprising almost half the total P&C written premium, through the estimated 628,000 P&C agents.
Most important to earning its share of that enormous opportunity is having the right suite of products to serve demand. FatBrain AI does.
IntellAgent: A Powerful Sales Enabling Tool
Targeting this opportunity, they leverage the power inherent to its portfolio asset IntellAgents to launch IntellAgent Advisor™, a sales enablement tool for agents’ rapid growth and productivity boost. It personalizes the exclusive underwriting knowledge from Rough Notes, Inc., a trusted leader supporting independent agents and underwriters since 1878. Value comes from automating 145 years of insurance expertise and delivering it at the “point of sale” using FatBrain’s FatGPT™ private data model technology, similar to the popular large language models or LLMs. In its simplicity, the IntellAgent Advisor aligns and enhances the underwriting knowledge, the agent-client experience, and FatBrain’s existing innovation ecosystem, continuously scoring industry and region-specific business risks.
From an LZGI, clients’, and investors’ perspective, the better news is that IntellAgent Advisor is a sales tool that fills a substantial technological gap for Independent agents. Moreover, with a few simple clicks, IntellAgent Advisor allows the agent to analyze, in minutes, not days, thousands of variables across specific commercial risks, contrasting the coverages they have with those they should have, and then benchmarks results with those comparable companies have. Its best feature is that it enables industry-wide productivity, personalization, and industry intelligence boost that supports the steepening of independent agencies’ growth trajectory.
Better still, it does most of the heavy lifting. IntellAgent Advisor does more than target deep industry knowledge to help agents win new clients; it handles all the data gathering so the agent can focus on ensuring the client’s optimal coverage at the same time simplifying decades of complex industry knowledge and relevant risk behaviors into an easy subscription delivering a personalized agent-client experience.
Think of it as the “Netflix (NASDAQ: NFLX) experience” to the insurance industry, an on-point comparison noting IntellAgent Advisor automates specific processes that then deliver to the client what they want and need. The most significant part of this asset is that LZGI expects quick adoption of this technology, leading to new revenues from thousands of agents during the next twelve months.
New revenue will add to already established momentum.
FatBrain AI Enjoys Rev-Gen Momentum
LZGI reported estimated preliminary revenues for its FYQ4 of $24.5 million, an over 155% increase to the $9,563,004 published in FYQ3. While that consecutive quarterly increase is impressive, results get better. Much better. In fact, it’s fair to describe LZGI’s year-over-year comparative revenue increase as an exponential beat.
In the same release, LZGI highlighted preliminary revenues soared 18,852% from the $129,272 posted the prior year. If that growth doesn’t pique interest in a company trading at roughly $0.90*, here’s another dose of exceptionalism. LZGI’s full-year revenue, which ended May 31, 2023, is expected to reach upwards of $44 million compared to $216,166 during the prior year. Doing the math, that represents a 20,254% increase. Yes, those numbers are preliminary. However, LZGI isn’t a penny stock security that reigns in expectations. LZGI is the real deal, and while audited numbers may change, it won’t be by a statistically significant amount higher or lower. In other words, at current levels, LZGI represents a bargain-basement investment proposition. (*share price on 8/01/23, Yahoo! Finance, 11:54 AM EST)
It’s fair to question how a company, growing at the pace of LZGI, trades under a dollar. The answer, in part, is a simple one. The first part- LZGI trades as an OTCQB company, which tends to keep institutional money away from the stock. The second part- LZGI is entirely under-the-radar of investors. That one-two punch can take a toll. And it has.
In fact, despite being better positioned than at any time in its history to generate record-setting performances in its new fiscal year, shares are lower by roughly 41% from a week ago. Of course, the sell-the-news folks take credit for that. But did they play that hand too quickly, not recognizing that LZGI’s path of least resistance is higher? Many say yes. And despite recent weakness allowing some gloating by sellers at $1.51, more likely than not, LZGI will reclaim that mark sooner rather than later.
LZGI Share Price Deserves A Raise
The bullish sentiment is warranted. In addition to soaring revenues, LZGI, in its new fiscal year that started June 1, expects revenues to be supported by gross margins in the 80% range, a robust level allowing income to fall faster to its bottom line. And with organic growth contributing to revenue records combined with an expected surge in new client accounts and accretive acquisitions, there is likely to be more of it. That expectation is not the result of coincidence.
It results from LZGI accruing value from new initiatives to commercialize the regional cloud and small and medium-sized enterprises (SMEs) marketplace in specific geos. More specifically, from creating and releasing products for SMEs to protect, predict, and increase cash flows using peer intelligence and market data to bridge the technical divide.
In the most basic sense, LZGI provides clients with the ability to improve business decisions and strategies informed by data analytics. Providing that difference to clients is a value driver, which, if last fiscal year results are an indication, will help transform FatBrain AI from a micro-cap solutions provider into a powerful AI engine that will fuel the growth of thousands of client companies. That’s something not many other companies can do. Yes, there are mega AI companies like NVIDIA ( NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Palantir (NASDAQ: PLTR) that are capturing the most headline attention. While helping usher in AI, they don’t do what FatBrain AI does. And they target revenues from different client types.
Differences Are AI-Fueled Advantages
FatBrain AI is focused on providing products enabling SMEs to do, in seconds, what used to take hours, including getting critical insights across all their SaaS data. This allows more efficient and timely business decisions using small, private data. The offering is built upon the demand highlighted by Open AI’s ChatGPT. Hence, as it earns traction, expect it to be a significant near-term value driver. There are plenty more of those as well. And it’s a result of FatBrain AI differences being advantages.
Remember, FatBrain AI doesn’t target micro markets. Instead, they intend to deliver robust AI solutions to the masses that will level the competitive playing field by providing AI solutions once reserved for the industry behemoths. That focus, and the inherent potential from it, open the door to a massive revenue-generating opportunity that could cause already impressive LZGI revenues to surge exponentially higher again, an assumption justified by LZGI focusing on and earning business from the millions of companies needing what FatBrain AI sells.
That’s not an overly aggressive presumption, considering few, if any, can successfully argue against the emergence of mainstream AI continuing to be one of the most significant technological revolutions ever. And, as they should, the companies focused on the right opportunities can and likely will be rewarded most. In other words, the sector is a more than one size fits all proposition. Individual businesses, like LZGI, can maximize opportunities in different focus areas, and those blazing their own trail will certainly be better positioned to capitalize on market opportunities than those in the herd.
Enabling Better Decision-Making Processes
That’s exactly what FatBrain AI is doing by designing, integrating, and implementing AI solutions that enable organizations of any type and size to simplify decision-making and effectively harness data to grow, save, and do better business. 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.
Happy clients are the primary value drivers. And it doesn’t appear that LZGI is focused elsewhere or letting them down. On the contrary, company growth indicates that clients appreciate FatBrain AI for equipping 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 clients 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 is also a direct value driver for investors. That makes total sense. After all, higher revenues while keeping costs and capital structures in check typically help increase share prices. Companies like LZGI that sell compelling, innovative technology will likely enrich themselves and pave the way for how global business connects to facilitate a borderless economy. Specific to LZGI, plenty of new client opportunities exist.
Targets Business From Millions Of mSMEs
Current estimates support that millions of mSMEs need what LZGI sells. And their using FatBrain AI solutions could eliminate many, even most, 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.
FatBrain AI is helping them close that gap by providing the means to solve these once-restrictive problems by harnessing the power of AI and maximizing insights learned from individual behavior and market data. The better news for clients is that they don’t need to understand the technology. 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 helping businesses grow more efficiently and profitably worldwide. Currently, LZGI’s clients in the U.S., India, Kazakhstan, and the UK utilize FatBrain AI Peer Intelligence to connect to existing SaaS products, where all business data lives, and align 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 presence on the world stage is helping pave a road to more significant expansion, with faster global market penetration expected this fiscal year. Again, this is not a coincidence but a result of LZGI laying the groundwork to help create a more globally-dependent, reliant, and connected business chain.
A Valuation Disconnect Worthy Of Consideration
All told, the groundwork completed by LZGI positions them ideally to continue its record-setting performances. Moreover, with an expected return to 80% margins and focusing where others aren’t, revenues earned this year should fall faster to its bottom line. Combining top and bottom-line growth is indeed a recipe for higher valuations, two boxes LZGI expects to check. That’s not all.
Investors following LZGI know that organic growth isn’t the only value driver; accretive acquisitions are also a part of its strategy to grow bigger faster. That’s happening, evidenced by its completed ones leading to a revenue surge this fiscal year. Thus, factoring in the potential for others, likely to happen based on management commentaries, the growth announced could be the precursor to significantly more. If so, the value proposition at current prices is more than compelling; it may be far too attractive to ignore. Savvy investors, especially those that appreciate undervalued, fast-growing companies, won’t.
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