NASDAQ : AZ
Benchmark Research Report $18 Buy Target
Link to Full report…
A lot has happened over the past few months at Cus2Mate, which we consider the crown jewel of the A2Z (AZ: Buy, Price Target $18) portfolio, and as a result, we think the picture is beginning to get a bit clearer. Beginning with the change of the CEO in March and followed by several incremental wins in Israel, we believe the business plan is now both substantially more focused and possibly nearing a pivot point that a big win/deal might effect.
In addition, the accelerated development of a modular design meant to be able to retrofit any cart solves multiple pain points at once and could lead to much more scalable adoption. As we have continued to say for the last several months, all it will take is one major win to significantly energize the share price, and if rumors/local reporting out of Europe prove accurate, that win may not be long in coming
To that end, there have been a lot of recent rumors and speculation coming out of Europe, and France in particular, around two key topics: 1) the elimination of scan- and-go given significant shrinkage and overall challenges with security; and 2) the potential adoption of smart cart solutions as an alternative. The beauty of this pairing for A2Z is that incremental budgets need not be tapped should they manage to win a contract in any of these markets, with the further benefit of having Accenture and NCR likely both pitching the A2Z platform and providing the service contract on the back end as a differentiating factor.
A contract win with any of the major European chains would be a game changer for A2Z, although the holy grail would probably be Carrefour, who was reported in the French press to be testing A2Z carts back in March. We have adjusted our model to show steady progress in the core Israeli market but would obviously need to revisit our forecast should a contract win materialize.
Carrefour is a French multinational retail and wholesaling corporation headquartered in Massy, France. The eighth-largest retailer in the world by revenue, it operates a chain of hypermarkets, groceries stores and convenience stores, which as of December 2021, comprises 13,894 stores in over 30 countries.