Finding investment comfort can be challenging in turbulent markets, especially for those choosing to stay invested. But it doesn’t need to be. A little due diligence can go a long way to protect portfolio value by mitigating downside risk. Those that found Alarum Technologies (NASDAQ: ALAR) (TASE: ALAR) in 2022 prove that point. Year-to-date, ALAR stock is higher by over 39%*. And that’s against a smallcap backdrop that has been decidedly bearish for much of the year, a fact shielded by investors paying sole attention to the broader NASDAQ 100 index, a measure that excludes top smallcap performers like ALAR. (*share price change calculated from market open 01/03/23 – 10/23/23 market close, Yahoo! Finance)
While that index can exclude winners based on market cap size, the excellent news for investors searching for value is that it can’t hide them. In fact, ALAR has done plenty to keep its name in the light by building an asset arsenal to provide internet access and web data collection solutions worldwide. And through its NetNut solutions, included in its Enterprise Internet Access arm, ALAR’s growth pace speed is shifting from hyper to warp from offering some of the fastest and most advanced and secured hybrid proxy networks. Its value extends further as one of the few comprehensive solutions enabling customers to collect data anonymously at any scale from any public sources over the web, leveraging the strength inherent to its network supported by its proprietary reflection technology and hundreds of servers at ISP partners worldwide. That’s not all.
ALAR is unique in that it provides a robust solution through an infrastructure optimally designed to guarantee the service’s privacy, quality, stability, and speed. That totality and value from other compelling assets do more than distinguish ALAR in the competitive landscape; it supports the thesis that the path of least resistance for ALAR shares is higher.
Compelling Asset Portfolio Drives Impressive YoY Growth
Keep in mind that ALAR is no stranger to having its shares trend in that direction. ALAR stock traded as high as $6.00 during the past 52 weeks, 79% higher than its current price. Here’s the interesting part of that equation: ALAR is better positioned for growth today than when it scored that high. In fact, realizing the value expected from accretive revenue-generating acquisitions and strengthening its balance sheet by matching higher revenues to a significantly lower cash burn, ALAR looks better positioned than at any time in its history to capitalize on and maximize target market opportunities.
They prove that point. Earlier this month, ALAR provided preliminary financials and guidance for the nine months ended September 30, 2023. Highlighted in the preview, ALAR said it expects accumulated revenues from the beginning of 2023 until the end of Q3 to reach $19.3 million, which will not only exceed the entire revenues of 2022 but also demonstrate impressive 45% growth compared to the same period last year. The quarterly breakout is also noteworthy. ALAR expects to post Q3 revenues of approximately $6.6 million, a 37% increase over the $4.8 million in the same period in 2022. Here’s the better news- during Q3, ALAR achieved over $1.5 million in positive cash flow from operating activities, compared to negative cash flow of $1.4 million in Q3/2022. Going forward, ALAR expects to provide more of the same.
Entering Q4 with cash and cash equivalents of roughly $7.7 million, ALAR guided investors to expect substantial improvement in its positive cash flow, resulting from cost-cutting initiatives facilitating revenues to fall faster toward its bottom line. The company’s shifted operational focus contributes as well. The company implemented a scale-down of investments into the consumer segment to optimize revenues and focused instead on its enterprise business. That decision was a good one, evidenced by NetNut continuing to earn greater revenue-generating traction, accelerating its path toward profitability.
Targeting Enterprise And Consumer Markets
That trend is expected to continue. And NetNut remains the value driver by uniquely providing a global web data collection cloud service based on proprietary traffic optimization, routing, and network technology. Since 2022, ALAR doubled its network’s infrastructure, enabling it to support and process billions in client requests. The scaleup in capabilities resulted from onboarding several strategic customers and expanding NetNut’s network by partnering with other Internet Service Providers. NetNut continues to earn its place in key markets.
Earlier this month, ALAR announced that NetNut launched its most advanced product to date, a Search Engine Results Page (“SERP”) and Scraper Application Programming Interface (“API”). The product debut marks NetNut’s entrance into the data collection and labeling market. SERP Scaper also puts ALAR in the right space at the right time by putting revenue-generating potential from an estimated $2.22 billion market opportunity in play. And that was 2022 numbers. The opportunity is forecast to compound at an annual growth rate of 28.9%, increasing the market potential to $17.1 billion by 2030.
ALAR intends to earn its share. Differences are advantages to make that happen by introducing the power within SERP Scraper to clients as a next-generation data collection solution that serves enterprise customers’ growing needs and demand worldwide. While it’s common knowledge that search engines are a valuable resource to virtually any situation for their obvious capabilities, it’s also essential to point toward their value for data extraction and how that data gets used relative to SERP. It’s there where ALAR’s new product can shine by providing users a means to overcome the tedious task of manually extracting massive amounts of data through its SERP Scraper API that allows businesses to obtain SERP data from search engines automatically in real-time from global search engines tailored to enterprises’ needs.
Leading The Technology Revolution
Those following technology evolution already understand the benefits. Specific to NetNut’s product, users benefit from automated retrieval and analysis of SERP data for search engine optimization and market research. It’s also scalable with unparalleled speeds that seamlessly access all search engines to gather real-time SERP data and keyword rankings. Perhaps its most significant advantage is that it’s compatible with multiple devices with an emphasis on compliance that provides search results from any location, language, and device. Best of all, web scraping opens a massive market of opportunity for ALAR’s subsidiary to capitalize on.
And it’s just part of the company’s ongoing commitment to provide cutting-edge solutions to data market clients. Still, it’s a big part. SERP Scraper is one of the company’s most innovative developments. It utilizes its robust network to provide customers with on-demand data access. Through its API-led approach to data delivery, the solution empowers businesses with seamless access to Search Engine Results Page data, enabling them to enhance their products with reliable, accurate, and real-time data. The best news is that it’s more than good; it’s attracting interest from existing and new customers wanting to enhance their data spread and volumes.
Better than just attracting them, it’s leading to new deals. And it should. NetNut’s robust network allows customers to efficiently handle vast amounts of information and facilitate cross-referencing data from many databases without the need to develop complex data collection solutions. This enables the vendor to focus on running its core business operations. In other words, it offers a win-win-win proposition for ALAR, NetNut, and its clients.
A Bullish Thesis Supported By Tangibles
Investors are winning as well. In fact, ALAR stocks’ over 39% YTD increase could be the precursor to more appreciable gains. That bullish presumption is supported by consecutive quarterly growth that often surpasses guided expectations. As importantly, entering Q4 with a fortified products arsenal, a strengthening subsidiary, and a growing client list, ALAR is earning its recognition. Better still, it’s scoring new business, blowing past 2022 revenues with three months to spare.
Thus, in challenging markets, resilient companies should be the investments of choice. Alarum Technologies checks all the right boxes to be on that list. In fact, with soaring revenues, a commitment to enhancing profitability, excellent and innovative products, and a management team that knows how to cross finish lines, they have earned a spot high on it. Summing those parts and despite its bullish run, ALAR stock may still present a valuation disconnect too compelling to ignore.
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