AITX - AITX stock price sits at a record low: is it safe to buy the dip?
2023-10-20 12:49:00 ET
The Artificial Intelligence Technology Solutions (OTCM: AITX) stock price continued its remarkable sell-off as demand for the shares evaporated. The shares crashed to a low of $0.0032 on Friday, a few points above its lowest level on record. They have dropped by almost 100% from the highest point on record, giving it a market cap of over $22 million.
AITX is growing but risks remain
AITX is a technology company that manufactures robots used by companies across several sectors like manufacturers, logistics, and security providers. The company’s RAD business builds stationary workflow automation solutions while RADM creates mobile workflow products. It also owns RADG, which provides software solutions.
AITX exists in a relatively competitive industry, which explains why it has struggled to gain market share in the past few years. The most recent results showed that its revenue grew by 44% in the last quarter to $386,363. This revenue growth was driven by the company’s recurring monthly revenue.
Its gross profit rose by 27% to $297,349 as the company’s operating costs declined. It expects that its costs will continue falling this year as it aims to boost its profitability. It aims to slash as much as $150k from its monthly expenses. In a statement, AITX’s CEO said :
“This solid trajectory is a testament to our relentless dedication and innovative approach. The numbers speak for themselves. Our strategy of growing RMR through the deployment of more, higher valued units is reaping dividends.”
Despite its strong revenue growth and sizable order intake, I believe that AITX is a risky company to invest in. It is a penny stock that tends to be highly illiquid. On Friday, it had a turnover of less than 6,000.
Instead, for long-term investors, I suggest investing in quality companies that have demonstrable revenue and profitability growth. The icing on the cake is companies that have a good record of paying dividends to shareholders.
AITX stock price forecast
In my last AITX share price forecast , I warned that investors should avoid the company. At the time, I predicted that the stock would continue falling. This view was accurate as it has crashed by over 50% since then.
AITX shares have moved below all moving averages and the crucial support level at $0.0054, the lowest level in April this year. The Relative Strength Index (RSI) and other oscillators have also continued falling.
Therefore, the outlook for the shares is bearish, with the next reference level to watch being at $0.025. The stop-loss of this trade will be at $0.040.
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