New York-based Nowcasting firm, AKAnomics Inc, recently announced the launch of its flagship product called IntraCast, which initially provides current quarter revenue estimates for 34 large/mid cap US Industrials names.
New Product Launch
Recently, New York-based Nowcasting firm, AKAnomics, announced the launch of its first product called Intracast. This new product leverages over 10,000 traditional and alternative data sources to estimate weekly revenue for 34 large/mid cap US stocks. Intracast’s final revenue estimates have been on the right side of consensus 65% of the time on average. The firm expects its forecast universe to rise to 70 tickers by the end of November.
Founded in May 2022 by Ajit Agrawal, PhD, AKAnomics Inc. has developed a unique AI-based platform that adopts macroeconomic Nowcasting techniques, and applies them to estimating company KPIs. While the firm is currently estimating company revenue, it is planning on estimating other KPIs including earnings, margins, etc. in the future.
Ajit Agrawal, Phd has been a pioneer in the use of alternative data and Nowcasting in equity and macro research for the past 15 years. Prior to starting AKAnomics, Ajit led Nowcasting efforts at UBS, and published frequently as a Strategist on US and EU industrial companies, and the US and China economies for 7 years. Prior to that, Ajit established and led AlphaWise at Morgan Stanley for 6 years, the first sell-side based alternative data research team.
Below is a chart which shows the final IntraCast revenue estimates for CAT each quarter before the company announces, and compares them to consensus at the time, and actual revenues reported by the company later. The graph also shows that the IntraCast revenue estimates hug more closely to the actuals than consensus does. The final estimates are on the right side of consensus 73% of the quarters.
Our Take
Nowcasting models to forecast real-time macroeconomic activity have been growing in popularity over the past few decades as Central Banks have increasingly tried to assess current economic and inflationary conditions rather than relying on traditional economic releases reflecting extreme lags and extensive revisions. Nowcast models can exploit information from a large quantity of data series at different frequencies and with different publication lags to provide accurate forecasts of current economic conditions.
While using Nowcasting to forecast macroeconomic time series is well known, few if any analysts have adopted these techniques to link the thousands of time series in the dozens of weekly, monthly, quarterly and annual macroeconomic reports to company specific KPIs. AKAnomics is one of the few firms that have cataloged and linked this data to company financials, enabling them to leverage public economic data releases to forecast company KPIs.
While AKAnomics launched its initial product offering estimating revenue for 34 industrials companies, the firm plans to expand the number of companies and sectors it produces estimates for, and the different KPIs it forecasts in the future. In addition, the firm plans to move from weekly to real-time estimates in the coming months. The hope is that buy-side analysts who do not have either the technology or the time to dedicate to this effort, will rely on data series like Intracast to help them profit from more precise and timely estimates of important company KPIs.