Little known Remark Media stock (MARK) is on the move. Over the last few days it has quietly ratcheted up gains. Can the momentum continue for Remark Media stock? Well, we believe the volume indicates it could move higher, but we would NOT chase the stock here. However, there are legitimate reasons to be excited about the prospects for the name. What do we mean?

Well the recent quarterly report is what really started driving the momentum in Remark Media stock. Here are the highlights:

Three Months Ended September 30th:  2017 Compared to 2016

  • Net revenue was $19.4 million, compared to $15.1 million.
  • Total cost and expense was $25.4 million, compared to $19.3 million.
  • Operating loss was $5.9 million, compared to $4.2 million.
  • Net loss was $13.3 million, or $0.58 per diluted share, compared to $15.3 million, or $0.75 per diluted share.
  • At September 30, 2017, the cash and cash equivalents balance was $16.0 million, and total restricted cash was $11.7 million, bringing the total combined cash position to $27.6 million, compared to a total combined cash position of $18.5 million at December 31, 2016.

Nine Months Ended September 30th:  2017 Compared to 2016

  • Net revenue was $52.0 million, compared to $44.4 million.
  • Total cost and expense was $68.0 million, compared to $57.2 million.
  • Operating loss was $16.0 million, compared to $12.9 million.
  • Net loss was $17.6 million, or $0.77 per diluted share, compared to $23.1 million, or $1.15 per diluted share.

 

Looking Ahead For Remark Media Stock

For 2018, company management expects to generate consolidated net revenue in excess of $100 million. Kankan’s Artificial Intelligence Platform will be the primary driver of the growth as its revenue rapidly increases. For the year ended December 31, 2018, company management expects KanKan to generate more than $30 million in net revenue, representing approximately a quintupling of the amount of expected revenue during 2017.

Remark Holdings management also indicated it expects its travel & entertainment segment to generate gross revenue of more than $325 million and net revenue between approximately $65 million to $75 million, with an EBITDA margin approximating 10% to 13% of net revenue, during 2018.

Remark Media Stock-Management commentary

“I am proud to announce record revenue growth for the third quarter. We began development on our proprietary KanKan Data Intelligence Platform almost four years ago and have now become a leader in the Artificial Intelligence field. Due to our accomplishments in AI, Remark is currently beginning to reap the rewards. We are well positioned to enter into the next phase of hyper-growth. By leveraging our AI competitive advantages, we have established meaningful partnerships with global corporations like Acxiom and Sina Weibo. Acxiom, one of the world’s largest data service companies, has selected the KanKan AI Platform to provide data-rich, actionable intelligence and targeted solutions for its client base. Meanwhile, Sina Weibo has deployed the KanKan 3D Facial Feature Tracking technology in the recent launch of its 3D augmented reality mobile app with the goal of driving sales by vastly enriching the shopping experience. The app uses our industry leading 110-dot 3D Facial Feature Tracking to provide Sina Weibo’s users the most accurate and interactive 3D AR experience possible.

Additionally, we have entered into two important contracts for our KanKan AI Platform.  First, Sefon, a leading solution provider, has awarded a multi-million-dollar contract to KanKan that utilizes our powerful computer Object Recognition technology to combat intellectual property piracy. This technology can automatically tag and index live and archived video content via real time object recognition. Second, the China Food and Drug Administration will deploy KanKan’s Facial Feature Tracking and Object Recognition technology to ensure restaurant industry compliance with food safety regulations. Initially, it will be rolled out in Shanghai and subsequently expanding to other cities to target the approximately eight million restaurants throughout China. As a result of our positive business momentum and strong sales pipeline, we are currently expecting upwards of $100 million in 2018 consolidated revenue, to which KanKan’s AI Platform will contribute over $30 million in net revenue. We view this as only the beginning,”

Quad 7 Capital rates Remark Media stock a hold at this time.

What do you think of Remark Media stock at these levels?

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