Windward (LSE: WNWD) is a growth company with a market cap of £85m and a share price of 96p, making it a penny stock. Despite this, it has seen fast-growing revenues and is on the verge of profitability. The company utilizes artificial intelligence (AI) technology in its products, which is a key reason why investors are bullish on its future.
Windward is a software firm that specializes in using AI to track ships and analyze data. Its platform, powered by machine learning models, helps companies understand risks, optimize routes, and ensure efficient transportation of goods by sea. Although the stock has seen a 75% increase over the past year, it is still down 52% since its late 2021 listing.
The firm’s marine tracking technology is highly sought after, especially with the increasing number of sanctions on regimes and vessels. With ongoing chaos in the Red Sea due to piracy, there is a growing demand for companies and organizations to track ocean freight for safety and regulatory compliance.
Windward boasts a growing blue-chip customer base that includes BP, Shell, and HSBC. Its non-executive chairman is Lord John Browne, former CEO of BP. The company also has contracts with the US Department of Homeland Security and INTERPOL, adding to its credibility.
The company operates on a software-as-a-service (SaaS) model, with nearly all revenue being recurring through annual subscriptions. By the end of 2023, its annual contract value had increased by 35% year on year. While the business is still loss-making, it is on track to reach EBITDA break-even this year, with profits expected to follow.
Analysts predict strong revenue growth for Windward, with a consensus one-year price target of 143p, representing a potential 49% increase from the current price. The stock is trading at 3.8 times sales, indicating that it may not be overvalued. Overall, Windward presents an attractive investment opportunity for those looking to capitalize on the growth potential of AI technology in the maritime industry.