Sectors: Technology
REA or realestate.com as most people think of it has been hit with the double headwind of being associated with the struggling tech sector and Australian housing which of course most pundits are certain will crash over the coming months. However, after correcting over 32% there’s certainly a large degree of negative news already built into the stock although an estimated valuation of 40x for 2022 most definitely doesn’t place it in the cheap basket.
WSP -14.97%: cloud communications business Whispir was out with their 3rd quarter update yesterday with numbers largely in line with expectations. Revenue targets were pushed to the top end of guidance near $68m with Annualized Recurring Revenue (ARR) up 245% YoY to $62.4m. Costs were down as well with the headcount reduced slightly, though total cash burn was marginally higher. Numbers are trending…
AD8 +6.21%: the audio-visual technology company provided a positive surprise in their quarterly update aftermarket yesterday. Revenue for the seasonally weak 3Q was $US6.5m, now strongly placed to beat FY estimates. They noted chip supply issues had started to ease after peaking early in the quarter, gross margins had been maintained above 75% and they have managed to push through price rises…
Every time global tech tries to bounce it gets slapped lower, we still believe the risk / reward favours the buying at least over the short term with rising interest rates being built into prices. ALU remains one of our preferred exposures to the local sector with a 15% rally towards February highs our initial short term target and the stabilisation in US tech overnight, even after some mixed earnings reports, might just be enough to set it on its way.
A few weeks ago MM was looking to take profit on GOOGL above $US2900 in hindsight we were simply too pedantic with the stock falling short by less than 2%, clearly frustrating following recent weakness in the tech sector. Following its result, GOOGL fell well over 4% this morning, the “if in doubt sell growth” attitude continues.
EML -38.56%: shares in the card payment business EML were dumped today after the company downgraded guidance for FY22. Revenue guidance was lowered to $225-235m, from $230-250m, and EBITDA guidance was cut 8% to $52-55m. While they said Australia and America were doing well, Europe had struggled with poor execution and regulatory concerns weighing on performance. It was expected to see a pickup…
ZIP -4.56%: the BNPL company was out with their quarterly report for the 3 months to March and there was a bit to unpack – they also started trading under their new code, ZIP, previously Z1P (number 1). Shares initially traded higher but faded through the afternoon to close lower. Transaction volumes grew 26% year on year to $2.1b while revenue grew 38% to $159m as the business saw transaction margins…
MP1 -21.55%: a very disappointing 3rd quarter update from the network connections business today which is struggling for growth. Monthly Recurring Revenue (MRR) was up just 3% on the previous quarter to $9.5m. Though this was hampered by FX headwinds, the annualized rate of $114m leaves them on a very expensive ~15x sales multiple. Shares closed on the day’s low, sending them back to a 2 year low.
One of the qualities to look for in a defensive business is pricing power, and REA’s dominance in real-estate listings ensures it can raise prices regularly. When listing a house it’s almost a given that it will be posted on www.realestate.com.au in the first instance as part of a wider campaign. The stock has come under pressure as bond yields moved higher and concern around real-estate…
EML +10.53%: news reports started to come through overnight that a private equity outfit was looking at a takeover of EML. EML confirmed Bain Capital was eyeing a buyout of the prepaid cards business earlier in the year, to the point the company gave them an exclusive look at the books. That period wrapped up last month without a deal being struck and Bain has walked from the table at this point. It was seemingly…
