Investment firm Maxim Group has initiated research coverage of Brand Engagement Network (NASDAQ: BNAI), also known as BEN, with a buy rating and a price target of $6.00 per share. BEN, a provider of conversational generative AI technology, offers human-like avatars designed to enhance consumer interactions.
Conversational artificial intelligence (AI) is capable of recognizing, translating, predicting, and responding to customers' written or spoken inputs. BEN has emerged as a leader in creating personalized AI experiences, according to Jack Vander Aarde, a senior equity research analyst at Maxim Group. In a research report dated July 25, 2024, Maxim highlighted BEN's full-stack turnkey offering aimed at boosting productivity, performance metrics, and consumer experiences for businesses.
The report emphasizes the growing importance of generative AI, driven by cost reduction, value enhancement, differentiated customer engagements, and operational efficiency. Citing various sources, Maxim estimates the total addressable market (TAM) for generative AI to exceed $30 billion by 2030. Additionally, 94% of large companies using generative AI anticipate incorporating voice technology within the next two years.
BEN's growth outlook is bolstered by a significant infusion of capital from existing investors, further supporting the company's expansion plans. Maxim's research report identifies substantial market opportunities for BEN in both the automotive and healthcare sectors.
In the automotive industry, BEN has secured a five-year exclusive partnership with Automotive Financial Group (AFG), giving it access to over 450,000 auto dealers, service centers, and insurance carriers worldwide. Maxim estimates this deal could generate up to $45 million in recurring annual revenue for BEN. AFG has also committed to investing approximately $6.5 million in BEN over the next four years, reinforcing confidence in BEN's AI technology and leadership.
In the healthcare sector, BEN has achieved compliance with the Health Insurance Portability and Accountability Act (HIPAA) and SOC 2 Type 1 certification, demonstrating its capability to securely handle sensitive patient data. The company has also launched three healthcare pilot programs with OSF HealthCare, Weill Cornell Medical Center, and MedAdvisor Solutions, based in Camberwell, Australia. Maxim notes that these pilot programs could represent about $1 million in annual contract value and provide BEN access to some 37,000 pharmacies worldwide. The healthcare vertical encompasses over 145,000 potential customers, including hospitals, outpatient and urgent care facilities, physician group locations, and dental offices.
Maxim's report suggests BEN's stock trades at a discount to its peers based on enterprise-value-to-revenue multiples. The firm argues that BEN's stock should trade at a premium due to its significant early-stage TAM opportunities and robust growth outlook. Maxim projects that BEN will achieve strong growth and positive adjusted EBITDA by 2027, with annual recurring revenue ramping up next year and accelerating through 2028. Currently, BEN's stock is trading around $3.00 per share.
However, the report also highlights investment risks associated with BEN, noting that it is still a pre-revenue company. As a result, Maxim has assigned it a "Speculative Risk Profile," indicating that the stock may not be suitable for all investors. For those with a well-diversified portfolio and appropriate risk tolerance, BEN could be a compelling opportunity.
