We came across a bullish thesis on Aware, Inc. (AWRE) on The Asymmetrical Edge’s Substack by Jackson. In this article, we will summarize the bulls’ thesis on AWRE. AWRE Technologies, Inc.'s share was trading at $1.89 as of Sept 27th.

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Aware Inc. specializes in security software solutions for both government agencies and private enterprises. Their solutions include fingerprint, facial, palmprint, and iris recognition which help in identifying, authenticating, and verifying individuals. These solutions are widely used by law enforcement, border patrols, financial institutions, and healthcare providers. Aware partners with several notable companies, such as Corsight, Intercede, GambitID, Imprivata, Latin ID, Marquis Software, and Serban Biometrics.

Aware’s sales strategy is segmented into three channels: systems integrators, direct sales, and OEM/VAR. The company has faced challenges like slow revenue growth, high cash burn, and shareholder dilution, which have impacted returns. However, since CEO Robert Eckel took over in late 2019, Aware has seen a positive shift.

Aware Inc. is valued at 0.6 times its EV/Sales, suggesting that it is undervalued compared to its peers. As fraud and deep-fake technology grows the need for Aware’s biometric solutions is increasing. Their technology has reduced fraud by 85% for a Latin American bank, saving $2 million annually, helped a broker process four times more loans through online verification, and solved 45 cold cases by matching fingerprints and palm prints. These achievements highlight the importance of Aware’s products and the growing demand for biometric solutions to fight fraud.

The company is focusing on sustainable growth, cutting costs, and taking advantage of the industry’s expected 14% annual growth rate. With a strong market position, substantial cash reserves, and a management goal of over 10% growth in 2024, Aware looks like a promising investment. Managing costs while increasing revenue will be key to unlocking its full potential and increasing shareholder value. Additionally, achieving profitability could lead to capital returns or acquisitions, further boosting shareholder returns as Aware transitions under new leadership.

Aware, Inc. is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held AWRE at the end of the second quarter which was 5 in the previous quarter. While we acknowledge the risk and potential of AWRE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AWRE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.