Maxim Group Initiates Coverage of Brand Engagement Network with Buy Rating, Sets Price Target Over 100% Higher

Investment firm Maxim Group has begun research coverage of Brand Engagement Network (NASDAQ: BNAI), or BEN, a provider of conversational GENAI technology known for creating human-like avatars to enhance consumer experiences. BEN is considered a leader in personalized AI experiences, which recognize, translate, predict, and respond to customer inputs.

Jack Vander Aarde, a senior equity research analyst at Maxim Group, highlighted BEN as a pure-play conversational AI company. In a research report dated July 25, 2024, Maxim initiated coverage with a buy rating, emphasizing BEN's full-stack turnkey offerings aimed at improving productivity, performance metrics, and consumer experiences. The report cites the growing generative AI market, projected to exceed $30 billion by 2030, and notes that 94% of large companies using generative AI plan to integrate voice capabilities within the next two years.

Maxim's positive outlook for BEN is bolstered by a significant infusion of growth capital from existing investors. The report details BEN's market opportunities in two key verticals: the automotive industry and healthcare. In the automotive space, BEN has signed a five-year exclusive partnership with Automotive Financial Group (AFG), potentially representing $45 million in recurring annual revenue. AFG has committed to investing approximately $6.5 million in BEN over the next four years. This partnership serves as a validation of BEN's AI technology and leadership.

In healthcare, BEN recently achieved compliance with the Health Insurance Portability and Accountability Act (HIPAA) and SOC 2 Type 1 certification, demonstrating its ability to handle sensitive patient data securely. BEN has entered into three healthcare pilot programs with OSF HealthCare, Weill Cornell Medical Center, and MedAdvisor Solutions. These programs could yield about $1 million in annual contract value, with the affiliation with MedAdvisor Solutions providing access to 37,000 pharmacies worldwide. The healthcare vertical includes more than 145,000 potential customers, such as hospitals, outpatient and urgent care facilities, physician group locations, and dental offices.

According to Maxim, BEN's stock currently trades at a discount to its peers based on enterprise-value-to-revenue multiples. The firm believes the stock should trade at a premium due to BEN's significant early-stage market opportunities and strong growth outlook. Maxim projects that BEN will achieve strong growth and positive adjusted EBITDA by 2027, with annual recurring revenue expected to ramp up next year and accelerate through 2028. BEN's common stock has recently traded around $3.00 per share, with Maxim setting a price target of $6.00.

However, Maxim also notes that BEN is a pre-revenue company and has assigned it a speculative risk profile. This rating applies to early-stage companies with minimal to no revenues, balance sheet concerns, and a short operating history. While speculative stocks may not be suitable for all investors, BEN might be of interest to those with a well-diversified portfolio and appropriate risk tolerance.