Bell Potter says this new ASX AI stock could rise 70%

If you are wanting exposure to the artificial intelligence (AI) boom, then there is a new option on the ASX that you may want to get better acquainted with.

That ASX AI stock is Black Pearl Group Ltd (ASX: BPG).

This recently listed data technology platform company provides AI driven sales and marketing solutions to small-medium sized businesses in the North American market.

The company's solutions are powered by its private data platform, Pearl Engine, and proprietary large language model (LLM).

Bullish broker

The team at Bell Potter has been running the rule over the ASX AI stock and likes what it sees. It said:

Blackpearl Group is a data technology platform that develops and operates a lead prospecting and marketing product suite via its proprietary Pearl Engine platform and augmented large language model developed by BPG in 2022. BPG transforms anonymous, unstructured web visits and data layers into identifiable prospects to significantly increase efficacy for SME ad/marketing spend by targeting prospects with a high intent to buy. BPG's evolution from legacy email branding/engagement tracking has grown ARR from $4.6m in 2Q24 to $19.5m as at 2Q26 at a CAGR of 106%.

The broker believes that Black Pearl Group is well-positioned for growth in the coming years and expects it to achieve its medium term annualised recurring revenue (ARR) target. It adds:

We forecast BPG to hit $50m ARR by 3Q31, consistent with BPG's 3-5 year targeted horizon (BPe: 4.7years), from: (1) Evolution of Pearl Diver/Engine into wholesale, Data-as-a-Service, and Platform-as-a-Service solutions capable of penetrating the advertising agency market; (2) Acquisition of Nth. Am. agentic AI platform, B2BRocket, which is expected to grow to $10m ARR by mid-2Q27 (2Q26: ~$4.7m); (3) Driving adspend efficiencies in budget-constrained segments by eliminating non-human (i.e. bot) traffic; (4) A large addressable market consisting of 32m SME's in North America, who are increasingly interested in deploying AI-based solutions; and (5) Strong management of CAC payback (4.6mths) and churn (<5%) via customer qualification and onboarding/revenue-ramping strategies.

Should you buy this ASX AI stock?

Bell Potter thinks that Black Pearl Group could be a good pick for investors with a high tolerance for risk.

According to the note, the broker initiated coverage on the stock with a speculative buy rating and $1.45 price target. Based on its current share price of 84.5 cents, this implies potential upside of 72% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

We initiate on BPG with a Speculative Buy recommendation and a valuation of A$1.45/sh. We use a blended 50/50 DCF (WACC: 12.3%) and EV/ARR (weighted multiple relative to $50m ARR forecast horizon), which reflects near-term value attributed to ARR growth balanced by value captured in longer-term potential cashflow generation.

The post Bell Potter says this new ASX AI stock could rise 70% appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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