Yesterday, ASX small-cap stock Black Pearl Group Ltd (ASX: BPG) shot 13% higher.
This exciting AI stock is now up almost 20% year to date.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 2.29% in that same period.
This rapid growth is hard to ignore, even for a small-cap stock.
What's more intriguing, is the bullish long-term outlook from Bell Potter.
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Introducing Black Pearl Group
Blackpearl Group is a data technology platform that develops and operates a lead prospecting and marketing product suite via its proprietary Pearl Engine platform and augmented large language model developed by BPG in 2022.
The company transforms anonymous, unstructured web visits and data layers into identifiable prospects to significantly increase efficacy for SME ad/marketing spend by targeting prospects with a high intent to buy.
It was initially listed on the ASX last November.
Since then, its stock price has been hovering between $0.80 – $1.00.
Yesterday, it shot more than 13% higher.
New analysis from Bell Potter indicates this could be just the beginning of a strong year for the ASX small-cap stock.
The broker is expecting plenty of growth this year.
Strong ASX debut quarter
In yesterday's report, Bell Potter was impressed with growth in Annual Recurring Revenue (ARR).
Bell Potter said ARR significantly outperformed expectations, rising $4.3m (+114% YoY, +22% QoQ) to $23.7m, well ahead of Bell Potter's $20.3m forecast, despite 3Q typically being seasonally softer.
The broker said outperformance was driven by penetration into higher value customers and Data-as-a-Service contracts.
ARR has been pulled forward by ~two quarters, reaching levels Bell Potter had previously forecast for 1Q27.
This drives improved EPS loss forecasts of 2.3% (FY26), 15.4% (FY27) and 21.8% (FY28).
Essentially, Bell Potter sees the company's debut quarter as a strong validation of its multi-venture model.
Price target upgrade from Bell Potter
Based on this guidance, Bell Potter has retained its speculative buy recommendation.
It also increased its price target to $1.91 (previously $1.45).
From yesterday's closing price, this indicates an upside of 94.90%.
Our valuation increases to $1.91/sh following the ~2qtr pull forward of ARR within our expected $50m horizon and re-weighting of our Bull/Base/Bear case scenarios. BPG is growing and executing quickly during a land-grab phase of AI implementation into sales and marketing technology stacks, primarily into the large US SME market.
