Veritone ( VERI ) bounced back Friday as one analyst raised his price target on the stock after a two-day sell-off tied to a researcher that panned the company's artificial intelligence prowess.
Veritone soared 23.2% to 45.45 on the stock market today . In raising his price target on the stock, Roth Capital Partners analyst Brian Alger said Veritone aims to use its analytical software, developed for media advertising clients, in other areas. He took Citron Research to task for questioning the company's ability in artificial intelligence.
"Citron's opinion that Veritone is not an AI company knocked the stock down 50%," Alger said in a note to clients. "We believe the data scientists who built and are refining (Veritone's) AI Ware Conductor would strongly disagree with this statement. Based on what we have seen over the past three weeks, we have no doubt that what Veritone is delivering is unparalleled and transforming businesses through the orchestration of third-party (artificial narrow intelligence) engines."
Costa Mesa, Calif.-based Veritone went public in May, pricing shares at 15 and raising $37.5 million. Shares hit a low of 7.87 in mid-August but began moving up after a favorable Barron's article. Alger, who on Friday hiked his price target to 62, initiated coverage on Aug. 10 with a price target of 13.
In its IPO filing, Veritone said its artificial intelligence software analyzes audio, video and other "unstructured" data. Alger says customers include broadcaster NBC and CBS, with other radio and TV broadcasters interested in the technology. He adds the company is likely to make acquisitions. The company may need to in order to expand the areas where they can use artificial intelligence.
"From day one, Veritone has been clear in its intentions to utilize (mergers)," added Alger. "Prior to going public the company had identified more than a dozen companies that met its target criteria. We believe that list is now over 30."
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Alger says Veritone has identified industries, such as radio advertising, where its analytical software can generate reports faster than trained staff.
In the June quarter, the company said revenue rose 103% to $4.1 million. The company said it lost $2.94 per share vs. a $3.20 per share loss in the year-earlier period.
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