Imagine being arrested for a crime that you haven’t even committed yet. Noted science-fiction author Philip K. Dick wrote about this possibility many years ago. His premise was that predictive analytics and massive computer power would allow law enforcement to predict, and stop, crime before the actual occurrence based on strong probabilities of it occurring. 

While Philip K. Dick’s vision of a dystopian future remains a distant possibility, parts of similar technology are actively used in the corporate environment. 

#-ad_banner-#Artificial intelligence, predictive analytics, and big data are no longer in the realm of science fiction. These high-tech skills, services, and products are now a must-have to compete in today’s quantitatively driven corporate environment. 

However, these firms remain in their infancy, offering years of upside potential for savvy investors who can choose the right companies in the space now.

The leading company in this sector is already up over 18% this year and has just posted strong third quarter results. Even better, its share price has set it up to be an ideal buy candidate. Let’s take a closer look.

Nice Ltd (Nasdaq: NICE) is an Israeli-based, $4.2 billion-market cap big data/artificial intelligence company. The shares trade in the United States on the Nasdaq as an American Depositary Receipt (ADR). 

NICE’s software empowers organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured data sets. 

This data comes from multiple sources, including phone calls, mobile apps, emails, chat, social media, video, and transactions. 

The company’s products are used by over 25,000 organizations in more than 150 countries, including over 80 of the Fortune 100 companies. 

I love the way Nice has a three-pronged approach to business, with each of the prongs following a significant market trend in the 21st century.

A Better Costumer Experience
The first prong of Nice’s business model is to perfect the customer experience.  

The primary tool, in this regard, is its Real-Time Authentication solution. If you have ever had to sit through an interrogation to identify yourself when calling a financial institution, you will truly appreciate the value of this software.

The way it works is it matches the customer’s voice print to their account. The identification process can be completed within 10-15 seconds using voice biometric artificial intelligence technology. 

Not only does this technology drive down the time per call by up to 45 seconds, but it also helps prevent fraud.

The technology is incredibly sophisticated, possessing the ability to identify fraudsters within seconds of the phone call. It works by matching the voiceprint to a blacklist of known scammers. If it is a match, the call is transferred to a fraud specialist to prevent a crime from happening. 

Stronger Protection
The next prong of Nice’s business model is focused on protecting people and assets. This segment is further broken down into two segments, public safety and digital policing.

Public safety is served by the management of massive internal and external data bits from a rapidly expanding network of unconnected resources. Nice’s technology provides structure to the data-enabling public safety officials so they can make the right choices in an ever-changing landscape. 

Digital policing assures that law enforcement agents have all relevant information easily available to them while on a call. Also, the analytics are used to identify crime patterns and trends that can be used to allocate resources in the most efficient and effective manner. Also, this prong of Nice’s offerings focuses on managing data and evidence for court cases, especially through incident reconstruction.

Eradicating Financial Crimes
Finally, the third prong in Nice’s cutting edge solutions is fighting financial crimes. Nice Actimize is the company’s division dedicated to eradicating financial crimes. Actimize uses big data to identify potential risks and quantify the threats posed by them. Nice Actimize fights financial crime by searching for suspicious behavior while simultaneously respecting all rules and regulations. This technology protects from financial loss, helps manage reputational risk factors, and helps avoid regulatory fines.

Barak Eilam, CEO of NICE, told Fast Company, “Innovation is the foundation for the value we bring to our customers. We are continuously innovating to help organizations serve people in three critical domains: protecting their money, ensuring their safety, and improving their experience. We greatly appreciate this recognition, as further proof that the solutions we are bringing to the market leverage the latest technology to have a real impact for our customers.”

Third-quarter financial results were strong as total revenues increased by just over 7% to $237 million from $221 million for the same time last year.

At the same time, third-quarter gross profit and gross margin increased to $159 million and 67%, respectively, compared to $146 million and 66% last year, respectively.

Third-quarter 2016 operating income and operating margin were $36.0 million and 15%, respectively, compared to $38 million and 17%, respectively, for the third quarter of 2015.

As you can see, this is a growing company with incredible upside potential.

Risks To Consider: Competitive risk is the principal concern when it comes to leading high-tech firms. One never knows when a startup with a disruptive product or service will make the current state-of-the-art obsolete.

Action To Take: Enter long on an upside break of $69.00 per share. Our target price is $85.00 per share.

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