GFAI Stock Forecast & Price Target

Guardforce AI Co Ltd reported an 8.7% revenue increase to $18.4 million for the first half of 2023, with gross margins improving by 190 basis points to 13.4% driven by effective cost control and enhanced profit margins from its robotics segment. The company is forecasting an 8% sales growth for 2024, anticipated to reach $39 million, largely supported by increased business from the Thailand market, spurred by the influx of Chinese tourists. Significant improvements were noted in the Logistics segment, particularly through the Cash Deposit Management solution, which almost doubled in revenue year-over-year and shifted the operating margin from a loss to a positive figure, indicating substantial profitability potential for the company.

Guardforce AI Co. Ltd reported an adjusted EBITDA of negative $9.0 million, significantly worse than the anticipated $6.3 million, primarily due to a $5.6 million allowance for doubtful debts related to accounts receivable and a $3.8 million provision for obsolete inventory. While the Secured Logistics segment showed only a slight revenue decline of 1.1% year-over-year, the overall sales decreased by 2.4% in the first half of FY24, raising concerns about ongoing operational stability despite some revenue growth when adjusted for currency fluctuations. Furthermore, the Robotics & AI Solutions segment experienced a drastic 77% decline in revenue, and the company faces numerous risks, including competition and increased operational costs, which may hinder future profitability and growth prospects.