Windward (LSE: WNWD) is a small-cap stock that has seen significant growth recently, with its share price up 179% in the past year, giving it a market cap of £90m. The company specializes in using artificial intelligence (AI) to provide risk management solutions to companies in the global maritime industry, including oil supermajors, port authorities, banks, freight forwarders, and insurers. Its cloud-based platform integrates data from various sources to predict and mitigate risks, offering features like route optimization, real-time cargo security risk assessments, and tracking vessels to ensure compliance with regulations. Windward’s solutions can now be delivered directly onto customer and third-party platforms.
In today’s uncertain world, with attacks on commercial ships in various regions, Windward’s services are becoming increasingly relevant. The company provides an “AI-powered risk profile for every vessel in the world,” aiming to help protect ships and cargo from potential threats. Despite the challenges in the maritime industry, Windward has shown strong growth, with a 31% increase in revenue in 2023 and a significant decrease in EBITDA loss. The company has also expanded its customer base to over 200, with an annual contract value of $34.5m, setting a solid foundation for further growth.
Although Windward is still a penny stock, it has the potential for above-average volatility, and competition in the software and AI space could pose a risk to its growth. However, the company has been successful in building partnerships with blue-chip customers and organizations like the London Stock Exchange Group and INTERPOL, showcasing its competitive advantage in the market. With over 90% of global trade passing through the sea, Windward has a vast market opportunity worth over $10bn, providing ample room for expansion and growth in the future.
As an investor, considering the company’s growth potential and partnerships, acquiring shares in Windward at its current price of 99p could present an attractive opportunity for future gains. While there are risks associated with investing in penny stocks and competition in the industry, Windward’s focus on AI-driven solutions and its growing customer base position it well for further success. Management’s optimism about achieving positive EBITDA and the company’s strong financial position with a net cash balance of $17.3m further support the case for investing in this promising small-cap stock. With a clear pathway to growth and a valuable service in a critical industry, Windward appears to be a compelling investment option for those looking to capitalize on the potential of small-cap stocks in the market.