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Remark Holdings stock forecast: Can the stock sustain its Reddit bump?

By William Hoffman

Edited by Jekaterina Drozdovica

08:29, 3 November 2021

Remark Holdings stock forecast
Source: Shutterstock

Artificial intelligence company Remark Holdings (MARK) was a potential pandemic stock winner in 2020 but struggled to take off despite flirting with “meme-stock” status several times.

The company was pushed on Reddit’s Wall Street Bets page because it makes thermal cameras able to detect when customers with a fever walk into a store. Investors saw the potential for this technology as a way for big corporate retailers to protect their customers and employees from Covid-19.

A year and a half later, that forecast has not panned out. There are concerns over the company’s attitude to privacy and willingness to work with China’s surveillance state. But many retail investors think the company could grow in a variety of areas, causing shares to occasionally spike, like they did in October, only to fall back.

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Remark stock analysis

Remark was trading at around $2 a share towards the end of October.

In February, the company hit a multi-year high closing price of $4.42 a share – a 140% increase over its 2020 year-end price. The company then reached new lows of just $0.75 a share in early October, losing 83% of its value.

Then from Thursday 21 October to Monday 25 October, the shares shot up by as much as 500% to an intraday price of $6.70 a share, the rise fuelled by retail investors on Reddit pumping the stock. The surge was short-lived. The stock closed down at $3.15 a share that same day – but still 320% up from its recent lows. 

Remark Holdings stock chart year-to-date

Trading volumes remained elevated in the following days but the orders switched to sell, according to Fidelity. By the end of the week, the company dropped out of the 20 most mentioned stocks on Wall Street Bets and resumed trading at just under $2 a share.

Remark shares hit their post-financial crisis highs in January 2018 just as its shift to AI started to yield results. The shares climbed to $13.41 a share, capping a 264% increase from November 2017.

The company was guiding revenue growth of 40% to at least $100m, but fell about $20m short of that goal by the end of the year, sending shares 92% lower from those highs.

Remark Holdings stock chart 2016-2021

Remark history & business profile

Much of Remark’s products run off its KanKan data intelligence platform that offers AI-based vision products to track real-time customer shopping behaviors, such as time of store entry, shelf-browsing habits and customer heat maps that detail a store’s traffic patterns.

Remark deploys these AI tracking systems not only in retail locations such as supermarkets and shopping centers, but also workplaces, construction sites, restaurant kitchens, farms and Smart City applications.

In March 2020, Remark launched its thermal scanning product in the US so that its clients can track and identify customers that register a fever, identify if people are wearing masks and provide a people count of who is entering and exiting a venue along with their age and gender.

In other MARK stock news, the company has already partnered with healthcare facilities, colleges, sports venues, hotels and casinos in the US. The Las Vegas Raiders American football team is using Remark’s scanners to check the temperatures of employees entering the facility. The Wynn hotel and casino has a similar program.

Financial outlook

Remark has a $224m (£164m) market cap valuation, but boasts that its market could grow to a multi-billion-dollar opportunity within the next five years, according to its latest earnings slide deck.

The company reported revenues of $4m in its second-quarter results for the period ending in June, which is a 74% increase year over year. However, costs and expenses eclipsed revenue, resulting in a $2.4m operating loss for the quarter.

To address these losses, Remark secured a $5m private investment from a single institutional investor back in September. The private placement included the purchase of 4.2m shares of common stock and warrants to purchase up to 4.3m more shares at $1.18 a share. Since that investment, the company’s share price has nearly doubled. 

In its quest to grow the AI business Remark has racked up significant debt. It has $1.42m of long-term debt obligations and $6.5m of short-term debts payable, as of 30 June, according to the latest filing.

China operations

Remark does not have the operations or budget that big AI labs like Google and Microsoft do, but it has carved a niche by bidding for Chinese contracts that the big corporations won’t touch because of privacy concerns, Wired reported back in 2018.

One of Remark’s many Chinese subsidiaries built technology for the police in China’s fifth-largest city Hangzhou to identify when banned motorcycles drove.

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Remark also announced partnerships with Chinese telecom Hanvon to install its technology in 17,800 stores, as well as Tongyue Technologies to monitor kindergarteners for childhood illnesses. Remark is partnering with the Chinese Ministry of Education and State Council to install its AI technology in China's 400,000 secondary school campuses

Additionally, Remark is working with the Bank of China on a range of AI solutions through the bank’s many retail locations.

Media operations

Remark came up as a media company, but that is increasingly taking a backseat to the AI operations.

Remark Holdings sold Vegas.com in 2019 for $45m of enterprise value, $30m of which went to repay the company’s debts.

Its luxury swimwear brand, bikini.com, generates some amount of revenue but the company does not break that out in earnings.

Remark Holdings was also a co-founder of personal healthcare management portal Sharecare, which went public through special purpose acquisition company (SPAC) Falcon Capital Acquisitions in July. 

The SPAC is backed by long-time investment banker Alan Mnuchin, whose brother Steve Mnuchin was US Treasury Secretary under the Donald Trump administration and is a former vice president of Goldman Sachs and the founder of New York-based investment bank AGM Partners.

Sharecare was valued at $3.9bn, debuting at around $10 a share. The stock rose as high as $12.81 a share but has since fallen to around $7.23.

Remark still holds a 4.4% ownership stake in the company, according to its latest earnings deck. However, Remark shares did not benefit from the SPAC deal as some investors anticipated. Instead, Remark shares fell by 51% from July until the end of October, just before its latest Reddit-fired surge.

MARK stock forecast

Roth Capital was the only major brokerage giving the Remark stock prediction, and even invited Remark to present at its annual conference earlier this year. However, Roth Capital dropped its coverage in September, a company spokesperson told Capital.com.

Before coverage was dropped, analyst Darren Aftahi set the MARK stock price target at $7 with a buy recommendation, representing a more than 200% price target upside, according to MarketBeat data.

However, Roth advises that its prior estimates, rating and opinions should no longer be relied upon.

The algorithm-based forecasting service Wallet Investor gives a bearish MARK stock outlook. The forecasting company sees the price reaching $1.449 by the end of December 2022, then falling to $0.47 by the end of December 2023. 

WalletInvestor’s long-term forecast on MARK stock

Note that stock predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.

 

FAQs

Why did Remark Holdings stock rise?

Artificial intelligence company Remark Holdings (MARK) might have looked like a possible pandemic stock winner, but struggled to take off despite flirting with “meme-stock” status several times.

Will MARK stock go up?

Before Roth Capital dropped its MARK coverage, analyst Darren Aftahi set the MARK stock price target at $7 with a buy recommendation, representing a more than 200% price target upside, according to MarketBeat data. 

However, Roth advises that its prior estimates, rating and opinions should no longer be relied upon for coverage.

Meanwhile, the algorithm-based forecasting service Wallet Investor gives a bearish MARK stock outlook. The forecasting firm sees the price reaching $1.449 by the end of December 2022, to then fall to $0.47 by the end of December 2023. 

Note that stock predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.

Is Remark stock a good buy?

This depends on a number of variables. It’s crucial to do your own research to form an opinion of a company’s performance and likelihood of achieving analysts’ targets. Remember that markets are volatile and past performance of the stock does not guarantee future gains.

The difference between trading assets and contracts for difference (CFDs)

The main difference between CFD trading and trading assets, such as commodities and stocks is that you don’t own the underlying asset when you trade using a CFD.

You can still benefit if the market moves in your favour or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.

CFDs are leveraged products, which means that you will only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.

CFDs attract overnight costs to hold the trades (unless you use 1:1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also need to pay a broker’s commission or fees when buying and selling assets directly, and you’d need somewhere to store them safely.

Read more: Upstart (UPST) stock forecast: Can the fintech lending firm keep the momentum?

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