We came across a bullish thesis on Locafy Limited (LCFY) on Ahead of the Curve’ Substack by Sam McColgan. In this article, we will summarize the bulls’ thesis on LCFY. LCFY Technologies, Inc. share was trading at $6.95 as of Sept 27th.
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Locafy Limited founded in 2009 is a software-as-a-service (SaaS) company that specializes in search engine marketing, its services are powered by AI that allows businesses to rank at the top of search engine results organically, without the need for paid ads. Locafy’s financials have recently stabilized and are now showing signs of recovery and improvement, it is expected that Locafy’s business could gain momentum leading to quarter-over-quarter improvement enabling it to turn profitable this quarter. Additionally, they have secured enough cash to sustain operations until they reach breakeven, which removes immediate concerns around liquidity.
Locafy is exploring opportunities with diDNA publishers that could help it grow beyond its current core business, offering the potential for significant upside. Even if this expansion doesn’t happen as quickly as hoped, Locafy is still expected to do well over time. Overall, Locafy’s current valuation seems attractive as the company is positioned for strong growth in a rapidly shifting digital environment, where frequent algorithm changes by search engines, especially Google, present a significant opportunity. With its technology being highly relevant in this evolving landscape, the company is well-equipped to capitalize on market shifts. This momentum in both fundamentals and price minimizes downside risks, making the company an attractive investment. Its improving financial performance, combined with a favorable market backdrop, suggests potential for sustained growth.
Locafy Limited is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held LCFY at the end of the second quarter which was 2 in the previous quarter. While we acknowledge the risk and potential of LCFY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LCFY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.