Singapore-based leading AI-powered education and acceleration company Genius Group Limited (GNS - Get Rating) provides entrepreneur education system business development tools and management consultancy services to entrepreneurs and entrepreneur resorts. It operates in the Education and Campus segments.

In November, the company committed 90% of its current and future reserves to be held in Bitcoin for the long term. Also, in October, Genius Group released GeniusGroup.AI to drive the growth of its Genius Cities Network and global AI Education model. Its key components include a full suite of AI Avatars, instant access to Alan Turing AI, daily AI news, and a global calendar of genius events.

However, despite its operational growth through product launches and strategic initiatives, the company’s stock has been highly volatile. The stock price surged over 1,600% in early 2023, but it has lagged later.

Shares of GNS gained 45.1% over the past month to close the last trading session at $1.03. However, its shares have declined 69.4% in price over the past six months and 84.5% year-to-date. The stocks have also slumped 85.3% over the past year. It has a beta of 11.10.

Let’s look at factors that could influence GNS’ performance in the upcoming months.

Recent Developments

On November 12, GNS adopted bitcoin (BTC) as its primary treasury asset, committing 90% of its current and future reserves to be held in bitcoin. The company plans to acquire an initial $120 million of bitcoin, about 1,380 BTC at current prices, to be held for the long term.

On October 25, GNS launched GeniusGroup.AI, a new platform designed to enhance the company’s global Genius Cities Network and AI education initiatives. The platform aims to connect educators, entrepreneurs, and governments through advanced AI tools, avatars, and training, facilitating a dynamic learning ecosystem.

The platform launch is part of GNS’ strategic plan to establish 100 Genius Cities worldwide, promoting AI-driven growth and innovation.

Bleak Financials

According to the preliminary results for the first half of 2024 that ended June 30, 2024, GNS’ revenue came in at $13.20 million, compared to $11.80 million for the same period in 2023. Also, pro forma revenue of $20.7 million indicates growth of 130% from the prior year.

The company’s first-half adjusted EBITDA net loss was $5.90 million, against the first-half adjusted EBITDA net loss of $7.30 million during 2023.

Poor Profitability

GNS’ trailing-12-month CAPEX/Sales of 0.57% is 80.3% lower than the 2.88% industry average. Also, its trailing-12-month asset turnover ratio of 0.34x is 65.8% lower than the industry average of 1.00x.

Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA are unfavorable compared to the 10.61%, 6.12%, and 3.91% respective industry averages.

POWR Ratings Reflect Uncertainty

GNS has an overall D rating, which translates to a Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. GNS has a D grade for Quality, in sync with its lower-than-industry profitability.

GNS is ranked last among the 20 stocks in the A-rated Outsourcing – Education Services industry.

Beyond what I have stated above, we have also given GNE grades for Growth, Sentiment, Momentum, Stability and Value. Get access to all the GNE ratings here.

Bottom Line

While the adoption of the latest technologies and innovative offerings are driving the share prices of Genius Group high, its weak profitability and bleak income growth could limit its growth prospects.

Given GNS’ uncertain near-term growth prospects, it could be best to avoid the stock now.

Stocks to Consider Instead of Genius Group Limited (GNS)

Considering the near-term uncertain prospects of GNS, one might want to consider investing in stocks with much more impressive POWR Ratings. So, consider the following A (Strong Buy) or B (Buy) stocks from the A-rated Outsourcing – Education Services industry instead:

QuantaSing Group Ltd. ADR (QSG - Get Rating)

Perdoceo Education Corporation (PRDO - Get Rating)

Franklin Covey Company (FC - Get Rating)

For exploring more A and B-rated outsourcing stocks, click here.

What To Do Next?

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GNS shares were trading at $0.99 per share on Wednesday morning, down $0.04 (-3.89%). Year-to-date, GNS has declined -85.07%, versus a 24.44% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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