Market Overview

2 Microcap COVID-19 Growth Stocks With "Buy" Ratings From Analysts

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As the world begins to embrace the “new normal,” some companies and their respective industries will not survive. The unprecedented economic impact of the “Great Lockdown” will continue to be felt for some time.

For some industries, the “changing of the guard” was just what was needed to re-awaken growth. Others like technology, which already had a strong outlook prior to the outbreak, could see even greater demand and attention as society adapts. 

According to the Pew Research Center, 53% of Americans surveyed said that the internet has been essential to them during the lockdown. The pandemic has expanded our digital lives and made our reliance on the internet much more pronounced. From ordering essential items and groceries to telehealth appointments and Zoom conferences, technology continues to be a key area of growth.

Mohawk Group Holdings, Inc. (NASDAQ: MWK) and Intellicheck, Inc. (NASDAQ: IDN) are two microcap technology stocks that have seen strong growth during the COVID-19 pandemic and also have strong support from analysts.

Mohawk Group

Mohawk is a technology-enabled consumer packaged goods company, which utilizes its proprietary artificial intelligence platform, AIMEE, to help locate emerging trends within the consumer goods arena. Currently, Mohawk has five active e-commerce brands, after recently launching its latest, Holonix, which will focus on personal protective equipment and wellness products.

Despite COVID-19, Mohawk has steadily seen expanding growth and sales over the past several months. Just recently, the company disclosed that preliminary May 2020 net revenues increased by approximately 105% compared to the same period in 2019.

As a result of the continued strong growth and results, management increased its full-year 2020 outlook, which now estimates net revenues to come between $170 million and $180 million. Furthermore, Mohawk now estimates to report positive adjusted EBITDA during the second quarter of 2020, compared to original estimates of later in 2020. 

Mohawk Group’s growth has not gone unnoticed with analysts. According to TipRanks, there are currently four analysts covering Mohawk. All four have a “buy” rating on Mohawk and list price targets in a range between $8.00 and $12.00. Assuming a conservative average price target of $8.50 from the analysts, which implies a 66.67% upside from current levels. 

Mohawk’s five-star analyst, Tom Forte of D.A. Davidson, has a price target for Mohawk set at $9.00, which gives further upside potential to over 76%. According to Forte, revenue could grow by 36.7% per year from 2019-2022, and its EBITDA margin could expand from 16.2% to this year.

The company’s most bullish analyst is Brian Kinstlinger of Alliance Global Partners, who holds a $12 price target, which represents over 135% upside from current pricing. 

Intellicheck

Intellicheck, Inc. is focused on developing and marketing technology solutions that help stop fraud and identity theft. Through the company’s proprietary technology, Intellicheck aims to stop digital fraud by implementing real-time identification authentication and age verification services. 

The company says that its technology helps companies improve operational efficiencies, as well as revenues, customer service, etc. Currently, Intellicheck is working with banks, financial institutions, retailers, government agencies, and defense companies to implement its technological safeguards.

In late June 2020, the company announced that “a top financial institution” signed an agreement with Intellicheck to implement its anti-fraud protections. Although the institution could not be named presumably due to the nature of their agreement, management did note that the bank is Midwest-based and has around 1,200 branches across 26 different states.

Bank tellers at this Midwest bank will now be equipped with tablets outfitted with Intellicheck’s authentication technology to approve IDs in real-time, accelerate financial transactions, and maintain AML/KYC compliance.  

According to TipRanks, Intellicheck currently has four analysts covering its stock, with three "buy" ratings and one "hold" rating. Currently, the analysts have an average price target of $11.00 for the company, which implies a potential upside of over 38% from current levels.  

Just two weeks ago, four-and-a-half-star analyst, Michael Grondahl of Northland Securities, placed a “buy” rating on Intellicheck with a price target of $10.00. The company’s most bullish analyst, Scott Buck of B.Riley, maintains a "buy" rating and a $12.00 price target, which implies an upside of nearly 51% from current levels.

Disclaimer:

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