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Absci - AI Stock Analysis

Analysis generated March 15, 2024

Absci is a biotechnology company that specializes in using artificial intelligence and synthetic biology to discover and develop next-generation biologic drugs. Absci's platform aims at drug discovery, biomanufacturing optimization, and novel protein creation, seeking to revolutionize the pharmaceutical industry. Their promise lies in reducing the time and cost of drug development, potentially offering a competitive edge in bringing new therapies to market.

Fundamental Analysis

In terms of revenue, Absci has faced a significant decrease in its last quarter, with revenue dropping to $740,000. This represents a worrisome decrease of 77.90% compared to the previous quarter and a decline of 68.59% compared to the same period last year. These numbers are critical as they show a downward trend in the company's sales, which is a fundamental aspect of a company's health.

However, on the net income front, the company reported $22 million last quarter, marking a 47.22% increase from the quarter before and a 19.31% growth year over year. Similarly, EBITDA stood at $21 million, increasing by 48.45% from the previous quarter and by 20.99% comparing year over year. These increases are encouraging and suggest that despite falling revenues, the company has been able to manage its costs and improve profitability.

Yet, investor sentiment may be adversely affected by insider activities, as there have been reports of company insiders selling their stock in recent months, creating a potentially bearish signal about the company's future performance.

Technical Analysis

Currently, Absci’s stock price stands at $4.95, recording a dip of 3.88% compared to the month prior. Nevertheless, the longer-term view reveals a 194.64% increase compared to last year, suggesting a positive trend in terms of stock price appreciation. The trend, however, is classified as bearish with the Simple Moving Average (SMA10) dropping from 5.13 to 5.08, a potential indicator of downward momentum in the stock price. The Relative Strength Index (RSI) is at 49.5, which is generally seen as a neutral signal, and does not provide a clear indication of immediate upward or downward trends.

Alternative Data Analysis

Examining the alternative data, job postings and employee sentiment have declined, with business outlook reported to be down by 9% in the last couple of months. This trend is of concern as it can indicate a potential downturn in company performance and morale. On the brighter side, Absci has seen a 29% increase in visitors to their webpage, reaching approximately 18,000 visitors. The increase in web traffic suggests a growing interest in Absci’s products and services, which could translate to an uptrend in customer acquisition.

Complementary to web traffic, the specifics of customer engagement were not provided but should be monitored as they could prove to be a vital sign of the company's ability to convert interest into sustainable business relationships.

Conclusion and Stock Analysis Recommendation

On balance, Absci presents a mixed picture. The fundamental analysis points to serious concerns regarding dwindling revenue but shows promise in terms of profitability increases. Technical indicators do not currently favor the bullish case, but the significant increase in stock price over the past year cannot be ignored. Alternative data points to potential growth in customer interest but raises red flags around employee sentiment and company outlook.

Given the complex landscape, investors should exercise caution. Those with a higher risk tolerance may consider a speculative position based on long-term growth potential implied by the increased web traffic and the revolutionary nature of Absci’s platform. Conservative investors may want to wait for more positive signals across all analysis fronts. It would be prudent to keep Absci on the watch list and monitor forthcoming quarters for improvements in the revenue trend and overall market sentiment before making an investment decision.