At a cursory level, Remark Holdings (NASDAQ:MARK) stock offers a suddenly compelling case. Although it’s probably fair to say that Remark isn’t a household name, one of its key products – artificial intelligence-based thermal scanners – has become a vital tool in the war against the novel coronavirus.
Unsurprisingly, MARK stock has turned into an extremely hot commodity on Wall Street.
However, Remark’s journey wasn’t completely smooth this year. Similar to most other publicly traded companies, Remark’s equity value plummeted when the crisis first hit the U.S. and other global economic powerhouses.
Yet in late April/early May when the first round of states (and countries that suffered in the early stages of the pandemic) began reopening, MARK stock took off like a rocket. CEO Kai-Shing Tao explained as follows:
“Our solutions provide touch-free access control and monitoring, as well as accurate temperature measurement and the ability to scan as many as 120 people per minute, a rate that is approximately 10 times faster than manual checks. Our solutions also filter out non-human heat sources and provide security personnel with real-time alerts with photo identification.”
As you can see, thermal scanners and other access/monitoring devices will play a pivotal role in our reopening measures. With the ability to scan hundreds of people per minute, Tao notes that big institutions, such as “casinos, entertainment venues, government agencies, hospitality organizations, industrial operations, law enforcement, and retail establishments” can resume operations with greater confidence.
And that’s really what the American people need right now. With Covid-19 taking a mental toll in this country, inspiring justifiable confidence can go a long way; hence, the dramatic surge in MARK stock.
Is MARK Stock For Real?
Although the extreme enthusiasm for Remark makes sense, it also worries many investors. After all, no one wants to be the one holding the bag should sentiment deflate. Given that the Covid-19 pandemic is a temporary event – we hope, anyways – it’s possible that shares could unwind.
However, optimists will argue that Remark is more than just thermal scanners and they would be right. At its heart, this is an AI firm, combining optics with data analytics to give human operators actionable information. For instance, Remark’s technologies can monitor workers’ motions, identifying compliant behavior against non-compliant.
To put it simply, Remark is Big Brother gone tech. Frankly, it’s a discomfiting organization. But in this time of great need, we can see why MARK stock has captured so much sentiment – if not our real-time data, compliant or otherwise!
Joking aside, it’s Remark’s other products that will pose headwinds for the American public. When you have armed protestors at the Michigan state Capitol bitterly complaining about their state’s shutdown order, I don’t think they’ll be in the mood for Big Brother-style surveillance protocols.
Even more problematic for MARK stock is the underlying contextual efficacy of the thermal scanners. I’m not doubting that the tech works. What I am saying is that it may not matter.
For instance, Healthline raised alarm when it reported that anywhere between 25% to 80% of people infected with Covid-19 aren’t aware they have the disease. If that’s the case, temperature scans represent a false sense of security.
Even more disconcerting is that 88% of some Covid-19 infected workforce units in New York City were asymptomatic. With such high rates, thermal scanners could end up causing long-term problems due to the aforementioned false sense of security.
Read the Fine Print
Before you get yourself involved with MARK stock, I would look at the fine print. Fundamentally, Remark is a mess. It ranks poorly on financial stability, with an Altman Z-Score of nearly -20, demonstrating a deeply distressed organization. Also, its net income consistently is in the red.
Therefore, it’s no surprise that MARK stock itself is all over the map. While its year-to-date picture is incredibly compelling, its long-term chart is not.
Finally, as I mentioned before, I doubt that Americans are interested in AI control mechanisms that monitor (spy on) them for compliant behaviors and actions. Further, the evidence that such mechanisms are effective against controlling crime, for example, are limited.
Thus, there’s a good chance that when we finally get over the coronavirus crisis, Remark may become very terrestrial again. In other words, this might not hit the MARK.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.