Sectors: Technology
Online recruitment platform SEK is following the MM playbook as closely as the bond market which is probably no great surprise as they are highly correlated albeit inversely. Yesterday saw SEK fall -4.3% smack in-line with the overall Tech Sector, if we are correct and bond yields continue to weigh on growth stocks and in particular, IT-related names lower levels feel inevitable.
NXT -6.37%: The data centre operator was lower today despite delivering a solid set of FY22 results, although weaker than expected utilization growth was the issue, prompting today’s pullback. For the past year they reported underlying EBITDA of $169m which was up +26% on the year and slightly better than the estimate of $166.1m. Their guidance for FY23 is for EBITDA of $190-$198m versus consensus of $194.3m. All in all, not a bad update, and inline guidance.
EML -10.55%: the embattled payments company took another hit today, disclosing that it had detected fraudulent transactions from its direct debit processing business. The European segment discovered a number of fraudulent merchants taking part in $7.9 worth of transactions through August. Steps to recover a portion of the money have been taken which may reduce losses however it is another stain on the business already struggling with compliance. The full potential loss is around 25% of FY22 earnings.
ALU +19.75%: The Printed Circuit Board (PCB) design platform reported FY22 results after market yesterday and they were above our expectations. Revenue delivered at $221m (+3% ahead) and EBITDA $81.1m (+8% ahead) while their FY23 guidance is also +8% better than consensus. They have a longer-term revenue target for $500m by FY26 and…
REA has almost halved from its mid-2021 high under the weight of selling across growth stocks and increasing concerns around the health of the Australian property market. However, equities usually offer the best opportunities when things look their worst. REA has bounced even harder than SEK enjoying a +40% gain from its mid-June low.
On-line recruitment giant SEK bounced just over 30% from its panic June low, we expect a similar recovery when current bond jitters subside but from where is the million dollar question? Seek has already delivered a solid set of FY22 results which should add comfort to buyers by alleviating the risk of a left-field surprise for the $7.9bn online recruitment business.
While MM has no interest in buying BNPL company ZIP, we do believe it is providing a potential roadmap for the next 6-months, especially with regard to high growth / Beta stocks.
The Printed Circuit Board (PCB) design platform reported FY22 results after market yesterday and they were above our expectations. Revenue delivered at $221m (+3% ahead) and EBITDA $81.1m (+8% ahead) while their FY23 guidance is also +8% better than consensus. They have a longer-term revenue for $500m by FY26 and yesterday they said…
EML +6.13%: FY22 results today showed better than expected top-line growth but a challenging year from a remediation/cost perspective. This is not a bad result given ~60% of their business is in Europe, which is experiencing some big macro headwinds. Revenue from ordinary activities came in at $232.4m, a touch ahead of $230.5m expected…
AD8 -3.61%: FY22 result was largely pre-announced on 28 July 2022 when they upgraded however we got some more colour on their FY23 outlook for (1) Video to start ramping up delivering >US$3m in revenues; and (2) existing headcount of 178 could deliver 2x revenues in the medium term. Overall, revenue was up 33% for the year to $46.3m with…
