The Australian share market is home to a number of ASX shares with exposure to artificial intelligence (AI).
One of those is probably flying under the radar for most investors but could be well worth getting better acquainted with.
Image source: Getty Images
Which ASX AI share?
The ASX AI share that could be worth a look according to the team at Bell Potter is Artrya (ASX: AYA).
It is a Perth-based medical technology company using AI powered image-analysis software to improve the detection and management of coronary artery disease (CAD).
CAD is driven by soft plaque that builds up silently in the arteries and can rupture without warning, causing a fatal heart attack.
Bell Potter highlights that this condition affects around 126 million globally each year.
Artrya's cloud-based software, Salix, uses proprietary AI algorithms to interpret data from coronary computed tomography angiography (CCTA) scans, to deliver results in a single point-of-care solution.
Bell Potter has been reviewing industry trends and believes they are favourable for the ASX AI share. It said:
The investment thesis for AYA inherently relies on the rise of using the Coronary Computed Tomography Angiography (CCTA) to evaluate coronary artery disease (CAD), and the associated AI powered image analysis software. We review the trends in modalities used to evaluate CCTA and show that CCTA is in strong growth mode with increasing modality market share.
The structural shift which occurred in 2021 due to guideline changes has turbo charged CCTA adoption, becoming the fastest growing image modality in cardiology with 4-year CAGR of c.30%, and modality share at >10%, heading toward c.30% by 2030.
The broker also highlights its belief that hospital economics will drive adoption. It adds:
Payer mix is critical to hospital economics, and with commercial payers typically c.35% of the hospital reimbursement profile, the cost of competing image analysis providers becomes pivotal. We illustrate the relatively favourable economics of a typical hospital using AYA v a leading competitor based on our channel checks.
AYA's revenue sharing arrangement model could result in a c.US$1.4m turnaround in a hospital that performs c.5,000 scans pa. This is in addition to the clear operational efficiencies that Salix's near-real time outputs can deliver across, volume, clinician productivity, labour efficiency and lower re-admissions and penalty rates.
Should you invest?
According to the note, the broker has retained its buy rating and $6.10 price target on the ASX AI share.
Based on its current share price of $4.79, this implies potential upside of 27% for investors over the next 12 months.
Commenting on its investment thesis, it said:
The recognition of CCTA image analysis by CMS and Physicians to efficiently and effectively detect and diagnose CAD is a huge growth driver for image analysis providers. CCTA utilisation is surging and this provides a strong foundation for AYA's superior product features to capture material market share over our forecast horizon.
