Month: May 2022

The Altamin Ltd (ASX: AZI) share price has soared higher in trade on Wednesday following the company’s response to a takeover offer from VBS Exchange Pty Ltd.

At the time of writing, the Altamin share price had surged to 10.5 cents apiece, a 45.83% gain on the day so far.

Yesterday, the market was informed by Thomson Geer Lawyers that it was acting on behalf of VBS in its attempted buyout of Altamin.

The bidder’s statement disclosed the details of VBS’ “off-market takeover bid to acquire all the fully paid ordinary shares which it does not already own in Alamin”.

Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is 0.68% lower today, dragging the S&P/ASX 200 Index (ASX: XJO) 0.07 into the red at the time of writing.

Altamin recommends shareholders take no action

Following the announcement yesterday, Altiamin has pushed back and recommended its shareholders take no action.

The company said:

Altamin notes the announcement by VBS Exchange that it intends to acquire all of the fully paid ordinary shares in Altamin that it do[es] not already own or control via an off-market takeover for 9.5 cents per share, implying an offer value of approximately $37.2 million.

The VBS Takeover Offer is expected to open in mid-May and will remain open for at least a month, and there is therefore no urgency to take action at this time.

If you sell your Shares on-market you will not receive any increase in the VBS Takeover Offer price, and you will pay brokerage.

At the time of the release, VBS said it controlled a 19.73% stake in Altamin, making it the company’s largest shareholder.

However, VBS didn’t appear to have much of a shot in its attempted raid on the company, given the acquisition wasn’t solicited by Altamin.

According to the Altamin statement:

As the VBS Takeover Offer was not solicited by the Company, it will need to be considered in detail by the Board of Altamin and its advisors before a formal recommendation is made to Altamin shareholders.

Shareholders should wait until they receive and consider the Target’s Statement before deciding whether to accept or reject the VBS Takeover Offer.

In the meantime, VBS says it has appointed Canaccord Genuity in Australia to continue purchasing Altamin shares “on-market at the price offered under its bid until the end of the offer period”.

The Altamin share price is around 4% in the red over the last year of trade, however, has shot 47% higher in 2022.

The post Altamin share price explodes 46% on takeover approach appeared first on The Motley Fool Australia.

More reading

• Top broker tips 17% upside for Qantas shares following Airbus order
• What would happen if Appen shares were removed from the ASX 200? 
• Why Alphabet stock fell 18% in April
• ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates
• What’s the outlook for the CBA share price in May?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Qantas Airways Limited (ASX: QAN) share price has lifted nearly 5% this week following the company’s update on its pandemic recovery.

Additionally, the iconic airline announced it has ordered 12 new Airbus A350s. The new aircraft will be ready for take-off from Sydney in 2025.

On the back of the news, broker Jefferies upgraded its price target for the Qantas share price. It’s predicting the stock has 17% upside, according to Reuters.

At the time of writing, the Qantas share price is $5.81, 0.17% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has also spent Wednesday morning in the green, having gained 0.27%.

Let’s take a closer look at why the broker thinks the ‘flying kangaroo’ is facing a green future.

Could the Qantas share price reach $6.81?

Jefferies is expecting big things from the Qantas share price after the airline announced it could return to profitability next financial year.

It’s also more bullish on the stock following news the airline is bolstering its international fleet with the intention to fly non-stop from Sydney to London and New York from 2025.

Finally, Qantas’ expectation of further growth in both its earnings and demand has boosted the broker’s confidence.  

The airline believes its domestic capacity will be 105% of its pre-pandemic levels in the quarter ending 30 June and around 110% of pre-pandemic levels in the quarter ending 30 September.

Meanwhile, it’s predicting its international capacity will be bolstered to just under 50% of pre-pandemic levels this quarter. That’s expected to rise to 70% in the first quarter of next financial year.

Jefferies also believes the airline’s two concurrent projects – Winton and Sunrise – will cement its solid market position.

Winton aims to renew Qantas’ domestic fleet. The airline has ordered 40 aircraft under the project. The first of the planes are set to arrive next year.

Meanwhile, Sunrise is working to see non-stop flights operate from Sydney to London.

Jefferies is reportedly gearing up for Qantas to report a net loss of $1.28 billion for financial year 2022.

That’s down from its previous estimate of $1.49 billion and last financial year’s $2.28 billion pre-tax loss.

Additionally, it expects Qantas to report a net profit of $703.3 million for financial year 2023 – up from its previous expectation of a $688.8 million profit.

As a result, the broker has slapped the Qantas share price with a price target of $6.81 and a buy rating.

The post Top broker tips 17% upside for Qantas shares following Airbus order appeared first on The Motley Fool Australia.

More reading

• Why is the Webjet share price beating the ASX 200 today?
• Why Alkane, Chalice Mining, PointsBet, and Qantas shares are rising today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• Qantas share price lifts off on projected return to profitability

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Oh, dear. It’s turning into another poor day for the Appen Ltd (ASX: APX) share price so far this Wednesday. At the time of writing, Appen shares have fallen by a nasty 4.06% to $6.38 each. And that’s with the S&P/ASX 200 Index (ASX: XJO) recording a modest gain of 0.07% so far today.

This latest move puts Appen closer to its 52-week low of $6.08 a share. It also puts the human annotated dataset company at a 42.7% loss for 2022 so far. Not to mention down more than 57% over the past 12 months. It’s unclear why Appen shares are falling today. There has been no fresh news out of the company so far in May. The only clue we have is that most other ASX tech shares are also having a pretty disappointing day this Wednesday.

But what is clear is that, with Appen’s recent and steep falls, the company is in danger of being kicked out of the ASX 200 Index. See, the ASX 200 is the flagship index of the Australian share market, But it only measures the performance of the largest 200 shares on the index by market capitalisation. And Appen’s recent falls have resulted in the company’s market cap shrinking to under $800 million as of today’s pricing.

That puts Appen at the bottom end of the ASX 200. And below shares like Coronado Global Resources Inc (ASX: CRN), which is currently outside the ASX 200. To put things in perspective, Coronado now has a market cap of over $4 billion. That’s more than quadruple that of Appen.

What happens if the Appen share price gets kicked out of the ASX 200?

The ASX 200 is rebalanced every three months to make sure it is an accurate representation of the share market. Its next rebalancing takes place next month. So unless Appen shares rocket higher over the next month or so, the company could well be booted out of the ASX 200.

But what would this actually mean?

Well, it theoretically wouldn’t have any impact on Appen’s business itself. But it could have an impact on Appen’s pricing and how the shares are valued by the market.

For one, there are many ASX fund managers that have a mandate for ASX 200 shares. That means that they can only select shares that are in the ASX 200 Index. If Appen falls out of the ASX 200, any fund manager that has such a mandate will be forced to sell their Appen position.

Further, many of the most popular ASX exchange-traded funds (ETFs) on our share market are ASX 200 index funds. One such example is the iShares Core S&P/ASX 200 ETF (ASX: IOZ). An ASX 200 index fund has to blindly mirror the ASX 200 index itself. Thus, if Appen leaves the ASX 200, any index fund that tracks the ASX 200 will have to ditch its Appen positions too.

So you can see that if Appen is kicked out of the ASX 200, it could result in some significant selling pressure on the shares. Thus, shareholders are probably hoping that the Appen share price keeps its spot in the ASX 200 next month. But we shall have to wait and see.

The post What would happen if Appen shares were removed from the ASX 200?  appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates
• Is the Wesfarmers share price a buy or a sell in May?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here’s why the Metcash share price just hit a 15-year high

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were getting roughed up last month as the search giant turned in a disappointing first-quarter earnings report and fell alongside the broader tech sector as market sentiment continued to move away from tech stocks. According to data from S&P Global Market Intelligence, the stock finished the month down 18%.

As you can see from the chart below, it was a steady decline for the Google owner over most of April, and the company’s descent tracked with the Nasdaq index.

GOOGL data by YCharts.

So what

Growth stocks and tech stocks pulled back last month over concerns about rising interest rates, inflation, a potential recession, and the war in Ukraine. Investors also seemed to be adjusting to the end of COVID-19 tailwinds that had favored tech stocks. Although digital advertising, which is Alphabet’s main business, is more sensitive to the general business cycle.

The main news out on the stock last month was its Q1 earnings report. It was a solid quarter as revenue increased 23% to $68 billion, matching estimates, but earnings per share (EPS) actually fell from $26.29 to $24.62 as the value of some of its investments declined. That result missed expectations at $25.96.

However, operating income increased 23% to $20.1 billion showing that the underlying profitability of the business remains strong. Growth in search, its core business, was solid, but investors were concerned about a slowdown in YouTube, where revenue rose 14% as some of the pandemic tailwinds faded and the war in Ukraine weighed on the business in Europe. Elsewhere, Google Cloud showed off strong growth but still lost nearly $1 billion on close to $6 billion in revenue.

The stock fell nearly 4% on April 27 after the report came out but recovered those losses the next day as tech stocks soared.

Now what

A number of investors have taken notice of Alphabet’s valuation in the wake of the earnings report as the stock is as cheap as it’s been in several years, trading for a price-to-earnings (P/E) ratio of just 21, cheaper than slow-growth stalwarts like Coca-Cola or Procter & Gamble.

The reason for that may be more about the broader economy than Alphabet itself, as investors seem to be fearful of a recession especially after US GDP shrunk 1.4% in the first quarter. Spending on advertising is closely correlated with the overall health of the economy and in a recession, Alphabet would likely see a significant slowdown in growth.

However, there’s little doubt that it would emerge from a downturn unscathed. Given that, the current price tag and the company’s growth rate make it look like a bargain.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Alphabet stock fell 18% in April appeared first on The Motley Fool Australia.

More reading

• Alphabet stock fell following Q1 report. Is it a buy?
• Why Alphabet stock slumped on Wednesday
• Have ASX tech shares finally reached the bottom?
• Should you buy Alphabet before the stock split?
• Shopify, Alphabet, Amazon, and Tesla stocks are splitting — which ones are the best buys?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) has given back the majority of its morning gains and is just a fraction higher. The benchmark index is currently trading at 7,316.8 points.

Here’s what is happening on the ASX 200 today:

ANZ half year results

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is pushing higher today after the market responded positively to the bank’s half year results. ANZ reported a 4% increase in cash earnings from continuing operations to $3,113 million. This compares to Goldman Sachs’ estimate of $2,971 million for the half. The bank also declared a fully franked interim dividend of 72 cents per share for the period.

JB Hi-Fi shares fall on sales update

The JB Hi-Fi Limited (ASX: JBH) share price is falling on Wednesday despite the retailer revealing strong sales growth during the third quarter. While all of its businesses delivered sales growth, the star of the show was the key JB Hi-Fi Australia business. It reported total sales growth of 11.9% year on year during the quarter. Investors were either expecting stronger growth or were disappointed that there was no commentary on margins or earnings.

Flight Centre shares tumble

The Flight Centre Travel Group Ltd (ASX: FLT) share price is tumbling on Wednesday. This follows the release of an update ahead of the travel agent’s appearance at an investor conference. Flight Centre revealed that despite recent improvements, it still expects to post a full year underlying EBITDA loss in the range of $195 million to $225 million in FY 2022.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Hub24 Ltd (ASX: HUB) share price with a 4% gain. This is despite there being no news out of the investment platform provider. Going the other way, the Imugene Limited (ASX: IMU) share price has continued its slide and is down a further 11%. Investors have been selling this biotech’s shares since it announced the termination of a supply agreement with Merck.

The post ASX 200 midday update: ANZ higher on results, Flight Centre and JB Hi-Fi sink following updates appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 bank shares are in the spotlight
• Flight Centre share price slips despite return to profitability
• JB Hi-Fi share price falls despite strong Q3 sales growth
• Is the Wesfarmers share price a buy or a sell in May?
• ANZ share price on watch amid $3.1bn half-year cash profit

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Commonwealth Bank of Australia (ASX: CBA) share price is in focus this month as investors get to grips with the latest changes for the banking environment.

Yesterday, the Reserve Bank of Australia (RBA) announced that it increased the Australian interest rate by 25 basis points to 0.35%.

CBA responded quickly by being the first big four ASX bank to pass on the full rate hike to variable loan borrowers. Time will tell what happens with savings accounts and term deposit interest rates.

CBA group executive of retail banking Angus Sullivan said:

This is an important time to support customers as some may not have experienced an interest rate increase since they took out their loans.

We are here to help customers who have loans and are considering how repayments might change. Some options available to help our customers manage repayments include fixing or splitting loans or setting up an offset account.

CBA said the new home loan variable interest rates will take effect on 20 May 2022.

What could happen next for the CBA share price?

No one can know what a share price is going to do any week, month, or even year.

While the CBA share price has moved up and down a bit in 2022, it’s currently almost flat for the calendar year to date.

The broker Morgans is certainly not confident about the CBA share price rising, or even staying where it is.

Morgans currently has a price target of $77 on the biggest ASX bank. That implies a possible decline of around 25% over the next year.

There are a few different things that the broker is taking into account. It does note that the net interest margin (NIM) is expected to increase as interest rates rise. However, higher interest rates could mean more arrears/bad debts for borrowers.

It’s possible that deposit balances may decline and investors may not find ASX dividend shares as attractive for income.

Out of the big four ASX banking options of CBA, National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC), it’s NAB which is the broker’s pick.

There are other brokers that are also negative on the biggest bank. Citi rates CBA as a sell with a price target of $90.75. Macquarie rates CBA as ‘underperform’ with a price target of $90.

CBA share price valuation

The different brokers have different estimates of the bank’s outlook.

Morgans put CBA at 19 times FY22’s estimated earnings.

Macquarie thinks that CBA’s valuation is 20 times FY22’s estimated earnings.

Citi thinks that the CBA share price is valued at under 20 times FY22’s estimated earnings.

All three brokers are expecting the CBA dividend to increase.

The biggest dividend yield projection is from Citi. It’s expecting CBA to have a grossed-up dividend yield of 5.3% in FY22 and 6.4% in FY23.

The post What’s the outlook for the CBA share price in May? appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 bank shares are in the spotlight
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• The CBA share price was the worst performer of the ASX 200 big banks in April. What happened?
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?
• Top brokers name 3 ASX shares to sell next week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Seven West Media Ltd (ASX: SWM) are tracking lower today and now trade around 2% down at 64.25 cents apiece.

The Seven West share price is on the move today amid the release of its investor presentation and trading update, presented at the Macquarie Australia Conference.

Seven West updates guidance

In its presentation Seven West mentioned that it is on track to report FY22 EBITDA from its 7Digital segment to $130 million, based on internal guidance.

As such, it also updated full group projections “from the previous guidance of between $315 million and $325 million to between $335 million and $340 million.”

Seven West CEO, James Warburton, noted the reasons for such a change:

The recent acquisition of Prime Media Group, coupled with the winning performance of the Seven broadcast television business and the strong growth of 7plus, make SWM the undisputed leader in the national total television market – a position that we plan to build on in the future.

The company also quoted Bloomberg consensus figures that show analysts expect it to report underlying net profit after tax (NPAT) $178 million in FY22.

“The earnings upgrade reflects the strength of advertising markets and the ongoing success of Seven’s broadcast and digital businesses,” Warburton added.

Further to updating guidance, the group also recovered its FY21 revenue of $1.27 billion and group EBITDA of $254 million.

The bolus of both revenue and earnings came from its TV Broadcast segment, precisely where Seven West sees continued growth into the coming years.

Seven West Media share price snapshot

In the last 12 months the Seven West share price has held onto a 35% gain, however has struggled this year to date. Since trading resumed in January, it has slipped less than 1% into the red.

That’s after soaring to a new 52-week high of 80 cents back in February.

The post What’s with the Seven West Media share price today? appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 bank shares are in the spotlight
• Why are EML shares making news this week?
• Elmo Software share price leaps 8% following quarter of ‘strong growth’
• Analysts name 2 blue chip ASX 200 dividend shares to buy
• Own AGL shares? Boss slams Cannon-Brookes’ plan as ‘transition into a nosedive’

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) bank shares are in the spotlight today following yesterday’s 0.25% lift in the official cash rate by the Reserve Bank of Australia (RBA).

The increase – announced at 2:30 PM AEST – was the first in 11 years and brings the cash rate to 0.35% from the historic low of 0.10%.

And we can expect a series of additional rate increases ahead.

According to RBA governor Philip Lowe, “The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time. This will require a further lift in interest rates over the period ahead.”

While higher rates tend to drag on some shares, particularly growth shares priced for distant future earnings, investors are keeping an eye on ASX 200 bank shares to see how they’ll respond, and how their share prices may hold up.

How did the ASX 200 bank shares perform following the RBA’s announcement?

There were 90 minutes of trading left following the RBA’s rate hike and guidance announcement.

During those 90 minutes, the ASX 200 dropped 0.2% lower.

The ASX 200 bank shares, however, went the other way.

Commonwealth Bank of Australia (ASX: CBA) gained 0.3% during the final 90 minutes of trade. Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares also gained 0.3%. National Australia Bank Ltd. (ASX: NAB) edged up 0.03%. And the Westpac Banking Corp (ASX: WBC) share price gained 0.4%.

All 4 of the ASX 200 bank shares also opened well into the green this morning, though they’ve been sliding heading into lunchtime with ANZ and CBA now dipping into the red.

So why are investors keenly watching the banks?

According to S&P Global Ratings (courtesy of The Australian), rising interest rates tend to boost the banks’ gross earnings, though they’ll face some headwinds from a potential increase in bad debts and lower lending levels:

We consider that if the official cash rates increase, banks are likely to reprice their assets ahead of a commensurate increase in their borrowing costs. Conversely, banks’ credit losses are also likely to increase as interest rates rise. In particular, the most highly leveraged households will struggle to service their debt at higher interest rates.

RBA rate rise already being passed on

As you’d expect, the RBA’s rate hike will likely be passed on from all the ASX 200 bank shares to their customers.

However, Finance Brokers Association of Australia managing director Peter White says it’s imperative the banks don’t lift their lending rates by more than the official cash rate increase.

According to White (quoted by The Australian Financial Review):

Now that rates have started to rise, we must shine a spotlight on the future behaviour of the banks. From past experience we know that some banks will look to use these opportunities to maximise their profits at the expense of mortgage holders.

It is imperative that banks do not increase their rates outside of increases in the costs of funds, because many Australians cannot afford sudden and steep rate increases.

CBA was the first of the ASX 200 bank shares to act on the RBA’s rate hike, announcing a 0.25% increase in its standard variable rates. The increased rate will take effect on 20 May.

Commenting on the move, CommBank’s group executive for retail banking, Angus Sullivan said:

This is an important time to support customers as some may not have experienced an interest rate increase since they took out their loans. We are here to help customers who have loans and are considering how repayments might change. Some options available to help our customers manage repayments include fixing or splitting loans or setting up an offset account.

Westpac wasn’t far behind.

The ASX 200 bank’s Twitter page reveals:

Westpac announces interest rate changes for customers.

Following the Reserve Bank of Australia’s (RBA) decision to increase the cash rate by 0.25%, Westpac has today announced a range of interest rate changes for home loan and consumer deposit customers.

From 17 May Westpac will increase home loan interest variable rates by 0.25% per annum (p.a.) for new and existing customers.

Savers were given a welcome boost with Westpac increasing interest rates for “selected consumer deposit accounts Westpac Life and Westpac 55+ and Retired by 0.25% p.a.”

The post Why ASX 200 bank shares are in the spotlight appeared first on The Motley Fool Australia.

More reading

• ANZ share price on watch amid $3.1bn half-year cash profit
• 5 things to watch on the ASX 200 on Wednesday
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• Own NAB shares? Here’s what to expect with the bank’s half-year result
• The ASX 200 shares that fund managers are buying and dumping

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The EML Payments Ltd (ASX: EML) share price is in the red today. EML shares are currently swapping hands at $1.53, a 3.48% fall.

For perspective, the S&P/ASX All Technology Index (ASX: XTX) is also sliding 0.8%. Block Inc (ASX: SQ2) is dropping 2.63%, while Zip Co Ltd (ASX: ZIP) shares are plunging 7.79%.

Let’s take a look at what is happening at EML Payments.

Secret presentation

EML Payments presented to 750 institutional investors at the Macquarie Australia conference in Sydney on Tuesday.

However, the media was not invited to the speech by EML Payments managing director Tom Cregan, the Australian Financial Review reported. According to the AFR, Macquarie informed the media that EML requested they did not attend.

As my Foolish colleague James reported yesterday, the EML Payments share price dropped 47% in April.

The EML share price dropped 38% on 26 April alone following the release of the company’s quarterly results.

Net profit fell 22% from the prior corresponding period. Furthermore, the company’s EBITDA (earnings before interest, tax, depreciation and amortisation) guidance for FY22 was slashed by 8% to $52 million from $55 million.

The company was also among the 10 most shorted ASX shares in the past week, although short interest has eased to 8.7%.

Share price snapshot

The EML share price has descended 73% in the past 12 months, 52% since the start of 2022.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned 3.6% in the past year.

EML has a market capitalisation of $569.5 million based on the current share price.

The post Why are EML shares making news this week? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares in April
• These are the 10 most shorted ASX shares
• These were the worst performing ASX 200 shares last week
• Here’s why ASX 200 tech shares are having such a stellar end to the week
• Why is the EML share price tumbling again today?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ELMO Software Ltd (ASX: ELO) share price is on the move during Wednesday morning.

This follows the company’s latest business update to the ASX.

At the time of writing, the cloud-based human resources and software solution provider’s shares are up 7.95% to $3.26.

ELMO shares accelerate on positive trading update

Investors are driving the ELMO share price higher after digesting the company’s robust performance for the third quarter of FY22.

For the three months ending 31 March 2022, ELMO reported annualised recurring revenue (ARR) of a record $101.2 million. This reflects a 33% increase on the prior corresponding period ($76.2 million).

ELMO highlighted that its mid-market segment reached $89.9 million, a 31% improvement on Q3 FY21. The growth is being driven through securing new customers and the cross sell of modules to existing customers.

Furthermore, the small business market continued to expand, achieving $11.3 million in ARR. This represents a lift of 47% through the past 12 months. The result is being underpinned by the onboarding of new customers and the cross sell of new modules introduced since the acquisition.

In addition, revenue for the most recent quarter surged to $67.4 million, up 37% compared to Q3 FY21 ($49.3 million).

EBITDA made a turnaround of positive $2 million, a swing of $3.2 million from the negative $1.2 million declared in the prior comparable period.

Year to date cash receipts stood at $84.3 million, which is 53% higher since this time last year. It also matches the quarterly record set in Q2 FY22.

Management noted it had $51.4 million in cash at the end of the March 2022 quarter.

The group reaffirmed its FY22 upgraded guidance listed below:

• ARR – $107 million to $113 million (28% to 35% year-on-year growth)
• Revenue – $91 million to $96 million (32% to 39% year-on-year growth)
• EBITDA – $1.5 million to $6.5 million

What did management say?

ELMO CEO and co-founder, Danny Lessem hailed the result, saying:

ELMO continues to experience strong growth as small and medium sized businesses adopt cloud-based solutions to manage an increasingly flexible or hybrid workforce. ARR grew 33% in Q3 and I am pleased we are tracking toward the top end of our guidance range which is also translating to the pleasing level of EBITDA.

…Finally, we have strong momentum coming into Q4, which is historically our strongest quarter. We expect ARR growth to continue at the high levels we are experiencing. We also continue to leverage our cost base as we expect to cross the cash flow breakeven point in the second half of FY23.

ELMO share price snapshot

The ELMO share price has lost almost 42% over the past year and is down more than 27% year to date. The company’s shares hit a 52-week low of $3 yesterday, before rebounding on today’s positive update.

On valuation metrics, ELMO presides a market capitalisation of about $293.78 million.

The post Elmo Software share price leaps 8% following quarter of ‘strong growth’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Elmo Software. The Motley Fool Australia has positions in and has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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