Glimpse Group: Can This Little Known Metaverse Play Win Big?

Summary

• Glimpse has quietly assembled an impressive catalogue of Metaverse related patents and subsidiaries.
• The Metaverse has extremely strong growth projections over the next 5 years.
• There are concerns about what role will be left for Glimpse with the biggest players investing heavily.

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What is the Glimpse Group?

The Glimpse Group (NASDAQ:VRAR), as its ticker symbol suggests, is a company that operates in the Virtual Reality and Augmented Reality space. Glimpse has caught investors' attention since the Metaverse began to dominate news headlines due to the nature of its services. Interestingly Glimpse doesn't actually build the Metaverse. Instead, they provide virtual reality and augmented reality products center around education, healthcare, and construction. So it's easier to see them as a support player in the soon-to-be metaverse industry. Nevertheless, smaller players in the space like Glimpse have had bombastic moves due in large part to popular firms like Meta (FB) and Nvidia (NVDA) prioritizing the idea. Today we will take a look at this bit-part player and discuss if there is any value at current levels.

High Growth Industry

Glimpse is a young company founded in 2017 and operates 12 different subsidiaries within the industry. Despite its age, its collection of VR/AR solutions provides it with a robust basket of options in what could soon be a massive industry. The Metaverse market is anticipated to surpass $250 billion by 2028 according to a Statista research survey. Glimpse itself estimates the industry will grow at a 49% CAGR from 2021 to 2023, with Enterprise augmented reality solutions being the largest driver for growth.

Glimpse Group

So we have a very focused small-cap player in what could possibly be a very high growth industry. But does Glimpse have the problems you normally associate with small-cap names?

Responsible Leadership

One of the first things that will stand out with Glimpse when you compare it to companies with a similar market cap is that it is strikingly an honest company. There is no evidence of baseless sensational headlines that have been disseminated to engineer a move in the stock. Instead, Glimpse is a company trying to do things the right way. The company has quietly gone about its business acquiring important subsidiaries and key patents. It has submitted 13 patent requests and has been granted 6 so far. Recently Glimpse group was issued US patent number 11189097 for presenting a simulated reality experience in a preset location. This pattern was particularly interesting because of the apparent broad range of applications it could impact if the Metaverse were to become mainstream. The patent has to do with using AR commercial applications to present in a virtual world that is aligned with the physical world. Put another way, the patent would impact a system that uses a shopper's experience in the Metaverse to line up with a physical store for virtual shopping. It is very early in the Metaverse story, but one can easily see how patents like these could become very valuable down the line. It has become less common but in the past, we have seen patents play a significant role in acquisition decisions, which is always good news for shareholders.

The Metaverse Will Be Key To Glimpse’s Growth

There is one thing in Glimpse Group’s favor that will likely be the tide that raises all AR and VR boats: the Metaverse. The important thing is that someone builds it out. The $250 billion projection could likely be a gross underestimation if a complete Metaverse is presented to the world. It's still debatable how Glimpse will fit into a fully developed industry. The hard part is actually building, maintaining, and governing the digital world. Hardware like the solutions Glimpse offers can be developed fairly easily but their patents provide real value. This is likely the reason for the low valuation with companies like Meta Platforms (FB), Microsoft (MSFT), and Apple (AAPL) investing heavily in the industry. Still, at least initially, their success will likely benefit the company and it will mean that the Glimpse Group is brought along for the ride.

Affiliations And Subsidiaries

In fact, Glimpse already has existing working relationships with many of the largest Metaverse tech names including Alphabet (GOOGL), Snap (SNAP), and Samsung.

Glimpse Group

But the Metaverse isn’t purely about gaming and eCommerce, and Glimpse is already establishing itself as a multi-faceted company with solutions for a wide range of industries. With Foretell Reality, Glimpse has exposure to augmented reality integrated into social media platforms, and with the Immersive Health Group, it is able to provide solutions for a simulated medical professional training environment. It is this type of optionality that has investors excited about the potential long-term prospects for Glimpse. The company's detail of its subsidiaries can be found below.

Glimpse Group

Glimpse Group

Glimpse most recently added Sector5Digital to its growing portfolio of brands to establish an enterprise immersive technology segment. This allows companies to integrate AR and VR technology into things like marketing, training, communications, sales, and consumer engagement.

Glimpse Group

Funky Price Action

Shares are down more than 36% in 2022 and over 61% since its IPO. Glimpse remains a completely speculative investment at this point, with a market cap of only about $74 million and a price to sales ratio of around 13. Price action isn't exactly encouraging a buy lately. This is partly due to the overall negative sentiment in growth stocks due to the recently hawkish Fed.

Data by YCharts

The Takeaway

While the company remains a promising investment, it is extremely speculative and risky. Its market is still not yet fully developed but this is perhaps the biggest selling point for the stock. I wouldn't place a massive amount of conviction in the stock. The conditions for a stellar trade are largely out of Glimpse's control. Glimpse is definitely in the right place but investors should wonder is it the right time? I would like to see Glimpse take a more active role in building out the Metaverse, whether it be in-house or the creation of open-source AI. I believe deepening the relationship with the concept would only improve sentiment. I rate the stock a speculative buy on the strong industry growth trends.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.