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Penny stocks that are part of the artificial intelligence (AI) megatrend have the potential to generate multi-bagger returns for shareholders in the upcoming decade. While investing in penny stocks is extremely risky, you can allocate a small amount of your capital to “test the waters” before taking the plunge, especially if the company is positioned to benefit from a rapidly expanding addressable market.
One such AI penny stock is Airship AI (AISP), which just won a border contract with the Department of Homeland Security. So, let's see if Airship AI is a stock worth investing in right now.
Is Airship AI a Good Stock to Own?
Founded in 2006, Airship AI provides an AI-driven video, sensor, and data management surveillance platform in the U.S. It offers Airship Acropolis OS, an IP and analog video surveillance platform; Airship Command, a suite of visualization tools that allow users to view data and evidence; and Airship Outpost, for high-definition recording with user-defined low-bit-rate video streaming encoding. AISP serves the government, public sector, law enforcement, and commercial enterprises.
Valued at a market cap of $48.1 million, Airship has increased its sales from $13 million in 2021 to $23.6 million in the last 12 months. In fact, the company’s sales have almost doubled in the last four quarters. Airship increased sales by 165% to $4.2 million in Q4 of 2023, and its spectacular growth has continued in 2024, with revenue of $17 million in the first half of the year, up close to 200% year over year.
A Big-Ticket Contract
With U.S. border security emerging as a key issue, Airship AI was recently awarded a $4 million, single-year fixed-firm-price border contract to an agency within the Department of Homeland Security.
“This award represents a continuation of our support to the agency for a wide range of AI driven technical surveillance requirements along the Northern and Southern Borders,” said Paul Allen, President of Airship AI. “Due to the sheer magnitude of the challenges facing the front line agents tasked with securing the border to counter human trafficking and stem the tide of fentanyl and other narcotics flowing into the United States, technology-driven force multipliers are becoming more and more critical.”
Airship’s Acropolis platform has a backend enterprise management system where customers can manage devices and sensors across the digital ecosystem from a web-based graphical user interface, resulting in significant cost savings for agencies with sensors and devices from different manufacturers.
What's the Target Price for AISP Stock?
With only a single analyst in coverage, AISP is a “Strong Buy,” with the forecast calling for the company to double its sales to $25.5 million in 2024 and grow revenue by 33% to $34 million in 2025.
Moreover, the company is at the cusp of reporting consistent profits, with a GAAP earnings estimate of $0.04 per share in 2025, compared to a loss per share of $0.16 in 2024.
Priced at 1.5x forward sales and 26.8x forward earnings, Airship AI stock is not too expensive, and should be a part of your penny stock watchlist in October 2024.
Notably, the analyst has a 12-month target price of $12 for Airship AI, indicating an upside potential of over 400% from current levels.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
