Month: May 2022

ASX tech shares have taken a bigger beating than any other sector on the S&P/ASX 200 Index (ASX: XJO) during the market sell-off – and there could be more pain to come, according to a top broker.

The dire warning from Macquarie Group Ltd (ASX: MQG) comes after the ASX 200 tech sector crashed nearly 16% over the past month.

That’s worse than the 11% plunge by the second-worst performing Materials sector.

More downside for ASX 200 tech shares

The tech meltdown is largely triggered by rising global interest rates. Growth shares are more sensitive to higher rates than others, and ASX 200 tech shares sit at the head of the growth table.

But bargain-hunters hoping to pick the bottom of the market may have to wait longer. Macquarie thinks valuations are still too high after analysing the performance of the sector over the longer term.

The broker used the enterprise value-to-sales (EV/sales) yardstick as a measuring tool. This is one of the preferred measures for the sector given that many are yet to turn a profit.

ASX tech valuations still looking expensive

While EV/sales multiples have come off their peaks following tech correction, they are still at a 33% premium compared to the 2010 to 2015 period, noted Macquarie.

Further, the current average multiples are still around double what they were in the early 2000s, as the dot-com bubble popped.

Based on Macquarie’s calculations, there could be a further 25% downside for ASX tech shares.

“History suggests a sector reset may take longer and be more painful than current market expectations based on consensus ratings and investor feedback,” said the broker. “We maintain our cautious outlook on the tech sector.”

Most expensive ASX 200 tech shares

But some ASX 200 tech shares are particularly at risk of a further sell-down. Macquarie flags the Altium Limited (ASX: ALU) share price as the most overvalued.

The broker’s one-year forward EV/sales estimate for the circuit board design software maker is 10.7 times. That’s 92% ahead of its historical trough and 49% above its historical average.

Is there value in the ASX tech sector?

However, there are three ASX 200 tech shares that are trading below their historical average and the average of the ASX 300 IT benchmark.

Mind you, this in itself doesn’t necessarily make the shares a “buy”. But in case you are wondering, the three are the Appen Ltd (ASX: APX) share price, Block Inc CDI (ASX: SQ2) share price, and Nearmap Ltd (ASX: NEA) share price.

Of the three, Block is the only one that Macquarie rates as “outperform”.

The post How much further can ASX 200 tech shares tumble? Macquarie weighs in appeared first on The Motley Fool Australia.

More reading

• Is the Altium share price now great value after dropping 30% in 2022?
• What’s up with the Appen share price on Wednesday?
• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• ASX 200 tech shares are staging a remarkable recovery today
• Why did the Xero share price just rebound 6%?

Motley Fool contributor Brendon Lau has positions in Block, Inc., Macquarie Group Limited, and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Appen Ltd, Block, Inc., and Nearmap Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nearmap Ltd. The Motley Fool Australia has recommended Macquarie 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 Xero Limited (ASX: XRO) share price is tumbling on Thursday morning.

At the time of writing, the cloud accounting platform provider’s shares are down 10% to a new 52-week low of $78.25.

Why is the Xero share price sinking today?

Investors have been selling down the Xero share price on Thursday for a couple of reasons.

The first is significant weakness in the tech sector following another selloff on the Nasdaq index overnight. This has led to the S&P/ASX All Technology Index falling a sizeable 5.1% this morning.

The other catalyst for the weakness in the Xero share price has been a negative reaction to the company’s full-year results.

What did Xero report?

For the 12 months ended 31 March, Xero reported a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue (AMRR) to NZ$1.2 billion.

This was underpinned by a 19% increase in total subscribers to 3.3 million thanks to growth in all markets. However, this subs growth wasn’t quite as strong as some were expecting, which could explain some of the weakness in the Xero share price today.

It was a similar story for its earnings, which fell short of expectations due to weaker operating margins.

The company reported an 11% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$212.7 million and a net loss of NZ$9.1 million.

What was the response?

Goldman Sachs has responded to Xero’s full-year results and described it as “solid”, though acknowledges that the company missed on revenue, earnings, and subscribers.

It commented:

XRO reported FY22 Sales/EBITDA/NPAT +29%/+11%/-NZ$37mn vs. pcp to NZ$1,097mn/NZ$213mn/-NZ$9mn, which was -1%/-2%/-NZ$13mn vs. GSe. Cash conversion was strong (GOCF +8% to NZ$236mn, = 111% of EBITDA), with XRO net cash decreasing to NZ$51mn (vs. NZ$257mn at FY21).

2H22 Sub growth was marginally softer vs. expectations (+258k vs. GSe +298k), with this weakness across all geographies (i.e. ANZ -10k, vs. GSe, International -30k). This is despite a solid churn profile in 2H22, with ANZ churn declining again. We note the UK business had subdued 3Q net adds, with 4Q improving.

Is the Xero share price in the buy zone?

Goldman Sachs currently has a buy rating and $133.00 price target on the company’s shares. This implies major upside potential for the Xero share price.

However, it is worth remembering that this recommendation and price target could change in the coming days once the broker has updated its financial model.

The post Xero share price sinks 10% to 52-week low following FY22 results miss appeared first on The Motley Fool Australia.

More reading

• Xero share price in focus amid strong FY22 revenue growth but full-year loss
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 tech shares are staging a remarkable recovery today
• Why EOS, Pendal, PolyNovo and Xero shares are charging higher
• Why did the Xero share price just rebound 6%?

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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Crypto investors woke today to the realisation that so-called stablecoins are not so stable at all.

This comes as TerraUSD (CRYPTO: UST) – intended to be pegged to the US dollar – plunged to an all-time low of 30 US cents overnight.

In a sign of the ongoing volatility in crypto markets, including within the stablecoin subsector, UST has rebounded from those lows and is currently worth 81 US cents.

Whether it will hold there, return to its intended peg of US$1, or plunge back to new lows is anyone’s guess at this stage.

‘Stabilising’ crypto loses 97% of its value

The even bigger carnage happened to the crypto that’s intended to keep UST in line with the US dollar. Or stable, in other words.

Terra (CRYPTO: LUNA) plunged 97% overnight, dropping to US$1.04. LUNA traded for as high as $19.17 over the course of the day. At the time of writing, LUNA has edged higher to US$1.05, down 94% from this time yesterday.

So, what’s going on?

Why the massive sell-off?

If you’re not familiar with LUNA, CoinMarketCap explains that: “Terra’s native token, LUNA, is used to stabilise the price of the protocol’s stablecoins.”

Those stablecoins are UST.

Some stablecoins are backed by the asset they’re pegged to, like US dollars. Some are backed by other cryptos like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Still others, like Terra’s UST, use algorithms to maintain their pegs. UST attempted to do this by enabling crypto investors holding its stablecoin to swap it for US$1 worth of LUNA at any stage.

That was meant to keep UST trading within a close range of the US dollar, as any dip below that could be regained by moving into LUNA.

However, the system ultimately relies on crypto investor confidence. And that confidence looks to have gone missing.

According to analysts at Coinbase (quoted by Markets Insider): “The exact reason UST became untethered from the dollar remains unclear, but on Saturday, hundreds of millions of dollars’ worth of both UST and LUNA were rapidly sold across exchanges, pushing UST to around 98 cents.” Not long after that, they said, “panic set in”.

Commenting on the meltdown at Terra, Nikita Fadeev, head of crypto fund Fasanara Digital, said (courtesy of Bloomberg):

Many people were caught off guard. Everything broke there. It is full capitulation … It will get worse before it will get better. Way too much UST is looking to exit, and the death spiral is very reflexive at these levels. It’s a long road ahead.

“Once liquidity evaporated, this perpetuated the collapse of the stablecoin,” Clara Medalie, research director at Kaiko, added.

Do Kwon, the billionaire crypto investor whose Terraform Labs developed UST and LUNA, tried to stem the sell-off by issuing US$1.5 billion of loans in UST and Bitcoin.

But Bryn Solomon from crypto trading platform Mgnr.io doesn’t believe there will be many takers.

“At this stage, I don’t think these firms will have the risk appetite to support it,” he said. “Algorithmic stables are a confidence game. Once confidence is lost, it’s game over.”

The post Is it ‘game over’? Top crypto plunges 97% overnight in stablecoin rout appeared first on The Motley Fool Australia.

More reading

• The Qantas share price is sitting around 40% below its all-time high. Is it a no brainer?
• 2 ASX growth shares that experts love right now
• Why Apple stock withered on Wednesday
• Is the Westpac share price a smart bank buy today?
• Why is the IDP Education share price sinking 7% today?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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 suffered over the last two years, but experts are bullish on the stock’s future.

Shares in ‘the flying kangaroo’ reached an all-time high of $7.46 in December 2019. That was mere months before Australia’s borders slammed shut amid the outbreak of the coronavirus pandemic.

Its stock tumbled to a multi-year low of $2.03 in March 2020 and has trended upwards since.

As of Wednesday’s close, the Qantas share price is $5.31. That’s 161% higher than its lowest point of the pandemic but 40.5% below its record high.

Could the S&P/ASX 200 Index (ASX: XJO) airline be taking off to soar at that height again? Let’s look at what experts are predicting for the national carrier’s stock.

Qantas closes in on return to profitability

The Qantas share price was boosted earlier this month when the airline announced it anticipates it will return to profit next financial year.

The airline told the market it hopes to be earnings before interest, tax, depreciation, and amortisation (EBITDA) positive this quarter. The prediction came after the demand for domestic travel recovered faster than expected.

It also predicted it will post EBITDA of between $450 million and $550 million for the current half.

Finally, the airline’s net debt has fallen below pre-COVID levels, sitting at $4.5 billion.

On top of that, Qantas has ordered 12 new Airbus A350’s as part of its ‘Project Sunrise’. The jets are earmarked to fly non-stop from Sydney to London and New York.  

No doubt many investors are looking forward to the company’s recovery over the next few years. And for good reason.

Expert: Qantas share price could double

Northscape Capital portfolio manager and analyst Richard Maynier believes Qantas has tackled most COVID-19 challenges with ease, coming out the other end stronger.

“We think investors will be surprised by how quickly profits rebound … there is good upside in the stock,” Maynier was quoted by The Australian as saying.

L1 Capital joint managing director and chief financial officer Mark Landau is also bullish. He thinks the Qantas share price could double if the company meets its financial year 2024 guidance.

“Over the past decade, Qantas has traded at a 40% discount to the ASX Industrials Index. I believe that discount deserves to be smaller today, given Qantas is a better business than it was five or 10 years ago,” Landau continued, courtesy of the newspaper.

“It generates a higher return on capital, better cashflow conversion and it generates a much larger proportion of its earnings from its high-growth loyalty division, which warrants a far higher multiple than a traditional airline.”

Finally, Barrenjoey Capital Partners analyst Matt Ryan notes the airline has “moved past balance sheet repair and is investing for growth”.  

The broker reportedly expects the Qantas share price to reach $6.40 over the next 12 months. That represents an upside of nearly 30%.

The post The Qantas share price is sitting around 40% below its all-time high. Is it a no brainer? appeared first on The Motley Fool Australia.

More reading

• Are ASX 200 travel shares already fully valued in May?
• Grounded! Why the Qantas share price is tanking 4% today
• ASX 200 midday update: NAB disappoints, Qantas announces acquisition
• Qantas share price stalls amid Alliance Aviation acquisition
• Qantas share price lower amid Federal Court loss

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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Experts have revealed some quality ASX growth share picks that they believe are opportunities at the current valuations.

There has been plenty of volatility on the ASX share market in recent months. Lower prices could mean better value for these two growing businesses:

Serko Ltd (ASX: SKO)

Serko describes itself as a leader in online travel booking and expense management for the business travel market.

In terms of how much of a decline it has seen, the Serko share price has fallen by around 40% in the past six months to its current price of $4.28.

It’s currently rated as a buy by a few different brokers, including Citi. The price target is $5.75, implying a potential rise of more than 34% over the next year. The broker believes the partnership with Booking will be a key area of interest in the upcoming report from the ASX growth share.

Citi is expecting Serko’s volume to keep growing as it recovers from the impacts of COVID-19.

In its February 2022 trading conditions update, the company said the Omicron COVID variant had reduced business travel volumes in key markets and the expected revenue for FY22. Booking.com business volumes were “significantly impacted” in December up until mid-January. However, in the week prior to the update, volumes were back to approximately 90% of October 2021 volumes.

The ASX growth share’s revenue for FY22 is now expected to be between NZ$18 million and NZ$20.5 million.

The company is due to hand in its full-year result on 18 May.

Step One Clothing Ltd (ASX: STP)

For readers that haven’t heard of Step One Clothing before, it’s a direct-to-consumer online retailer for ‘innerwear’. It says that it offers an “exclusive range of high-quality, organically grown and certified, sustainable and ethically manufactured innerwear that suits a broad range of body types”.

The Step One Clothing share price has also seen a hefty decline in recent times. Over the last six months, Step One Clothing shares have dropped by around 82% to 48 cents at the time of writing.

It’s currently rated as a buy by the broker Morgans with a price target of $2.40. That implies a potential rise of around 400% over the next year.

The broker likes the expanding product range of the business, with expectations for a good end to FY22, going into FY23. The broker thought the market had been too harsh on this ASX growth share.

In that FY22 half-year result, Step One reported revenue of $38.1 million, which was up 11.7%. Its gross profit margin improved from 82.1% to 83.1%. The company also boasted of “strong” returning customer order rates. Returning customers increased from 39% to 60%.

The company is looking to grow in the UK and the US. It has launched a women’s line and a sports range.

In FY22, Step One is expecting to grow sales by between 21% and 25%, with pro-forma earnings before interest, tax, depreciation, and amortisation (EBTIDA) of $15 million.

The post 2 ASX growth shares that experts love right now appeared first on The Motley Fool Australia.

More reading

• Why Bellevue Gold, CSL, Endeavour, and Serko shares are pushing higher today

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 positions in and has recommended Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. 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

So much for being immune to the tech stock sell-off. The stock of Apple (NASDAQ: AAPL), which earlier this year largely held its value while peer techies fell in price, couldn’t escape the trend on Wednesday. The company’s shares lost more than 5% on some scraps of bearish news.

So what

The first is about a competing product, namely a smartwatch from Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google. Following rumors that Google would unveil such a product, the company confirmed this today at its annual I/O developer conference. While officials weren’t exactly full of details about the Pixel Watch, they did reveal that it’ll be released later this year.

Apple is the dominant smartwatch maker in the world by far, holding more than 30% of global market share in the product category. The runner-up is notably behind: Samsung (OTC:SSNLF), with barely over 10%. So there’s certainly opportunity here for a determined entrant, like Alphabet, with a snazzy new product.

Another news item that could be considered slightly negative is Apple’s announcement that it will halt production of the iPod. It was a revolutionary product when released as a digital music player in 2001, but it has been replaced over time by smartphones that typically bundle a music app into their native software suites.

The iPod long ago ceased to be a significant product for Apple; most smartphone owners are happy to use their beloved devices as jukeboxes. But maybe the jettisoning of the iPod is an uncomfortable reminder that the company hasn’t introduced a world-shaking, hotly innovative product in quite some time.

Now what

Neither of these developments warranted Wednesday’s sell-off. But in such an environment for tech stocks, sensitive investors react to even the most minor difficulties and challenges…and tend to pull the trigger on big sector names more readily than usual.

Apple remains a solid company that’s still finding ways to grow, however. So for me, it’s worthwhile to hang on to the stock in the hope of riding out this negative wave. 

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

The post Why Apple stock withered on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why Apple, Meta Platforms, and Salesforce stocks plunged today
• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing
• What Apple and Amazon said after hours Thursday
• Which ASX 200 shares have historically performed well during rising inflation?
• Why Apple stock could crush the market this earnings season

Eric Volkman has positions in Apple. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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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The Westpac Banking Corp (ASX: WBC) share price is in focus after the bank recently reported its FY22 half-year result.

Could the big four ASX bank now be a smart opportunity for investors to consider?

Before getting to what some investment experts may think, let’s look at what Westpac reported for the first six months of FY22.

Earnings recap

There were two sets of comparisons that Westpac told investors about on Monday – how the FY22 first half compared to the second half of FY21 and the first half of FY21. And it appears the results were well received, with the Westpac share price rising 3.23% on the day.

Compared to the first half of FY21, the HY22 statutory net profit after tax (NPAT) fell by 5% to $3.28 billion and cash earnings declined by 12% to $3.1 billion. Revenue dropped 8% and costs declined 10%.

Compared to the second half of FY21, the statutory net profit was up 63% to $3.28 billion. Cash earnings increased 71% to $3.1 billion. Revenue dropped 3% and costs fell 27%.

Westpac’s board declared a fully franked interim dividend of 61 cents per share. That compares to the FY21 final dividend of 60 cents per share and 58 cents per share for the FY21 interim dividend.

The big four ASX bank said that “asset quality has improved and most credit quality metrics are back to pre-COVID levels, however, we increased overlays in our provisions for supply chain issues, inflation, expectations of higher interest rates, and recent floods”.

Westpac has reduced its headcount by more than 4,000 as it tracks towards the target of an $8 billion cost base by FY24.

Over the half, total lending rose by $8.8 billion and total deposits increased by $20.6 billion.

The company said its Australian mortgage portfolio grew off the back of owner-occupied mortgages, but it wants to lift performance in investor lending. It also said that it has built on its momentum in business lending.

Westpac’s net interest margin (NIM) declined from 1.99% at the end of the second half of FY21 to 1.85% in the first half of FY22.

In terms of the outlook, Westpac noted that “demand for housing has already shown some signs of easing and rising interest rates are expected to contribute to a moderation in house prices next year”.

It also reminded investors that as interest rates rise, it is coming from a low base and the bank is already assessing loan applications on higher rates.

Is the Westpac share price a buy?

The broker UBS thinks that it is, with a price target of $27. That implies a potential rise of around 12% over the next year on the current Westpac share price of $24.11. Its cost reduction plan and asset quality were positives.

UBS thinks Westpac is valued at a decent discount to its big four ASX bank rivals of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

However, Credit Suisse is currently ‘neutral’ on the bank, with a price target of $24.40. It said there is a question of whether the big bank will be able to reach its cost-cutting goals considering the inflation environment.

The post Is the Westpac share price a smart bank buy today? appeared first on The Motley Fool Australia.

More reading

• Time is running out to secure dividends from these 3 ASX 200 shares
• 2 top ASX dividend shares experts rate as buys
• Westpac share price is a buy: Broker tips ‘strongest EPS growth in the sector’
• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• Here are the top 10 ASX shares today

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 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 IDP Education Ltd (ASX: IEL) share price has come under significant pressure on Thursday.

In morning trade, the student placement and language testing company’s shares are down 7% to $23.30.

Why is the IDP share price sinking?

There have been a couple of catalysts for the weakness in the IDP share price on Thursday.

The first is broad market weakness following another poor night of trade on Wall Street. The other is news that the company’s CEO has resigned.

According to the release, IDP’s CEO and managing director, Andrew Barkla, will step down from his current role in September after more than seven years leading the company.

The release notes that during the past two years of disruption to the international education industry, IDP’s leadership team has continued to deliver on the company’s long-term transformation strategy and has added significant revenue through acquisitions while building its people resources across the global network.

With the industry now stabilising and borders reopening, Mr Barkla and the Board have agreed that now is the time for leadership transition.

And while Mr Barkla’s will be stepping down as CEO in September, he will be sticking around for a further 12 months in an advisory capacity to assist with key strategic projects. After which, the IDP Board intend to nominate him as a new non-executive director at its 2023 annual general meeting.

What now?

When the CEO of a growth company steps down it can spook investors. This is because they may fear that the resignation is a sign that the company’s growth runway is coming to an end.

After all, if the company was destined to double in size in the future, why would you not want to oversee this growth?

However, Mr Barkla appears to have dismissed this and remains positive on IDP’s future. He commented:

I am passionate about the opportunities that exist for IDP. It is a special Company with amazing people that deliver meaningful impact. Whilst I believe it is the right time for me to step down, I want to stay strongly connected to IDP so I can contribute to its ongoing evolution.

It was important to me that I worked with the Board and IDP’s leadership team to ensure we had successfully navigated the pandemic before this change was made. Orderly leadership transition is a hallmark of a well-managed business, so I want to make sure I assist the Board as our Directors work to secure the best possible successor for the role.

IDP will now undertake an extensive global search to identify a suitably qualified leader with exceptional skills and global experience in technology driven consumer businesses.

The post Why is the IDP Education share price sinking 7% today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that could surprise you in a year’s time
• 2 ASX growth shares that could be buys in May 2022
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• Top brokers name 3 ASX shares to buy today

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 Idp Education Pty 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 Coinbase Global (NASDAQ: COIN) plunged 26% on Wednesday after the digital asset trading platform reported an unexpected loss in the first quarter. 

So what

Coinbase generated net revenue of nearly $1.2 billion. That represented a decline of 27% year over year and 53% sequentially. It was also significantly below Wall Street’s estimates, which had called for revenue of almost $1.5 billion. 

The brutal downturn in the cryptocurrency market in recent months has weighed heavily on Coinbase’s business. The exchange operator’s monthly transacting users declined by 19% compared to the fourth quarter. Its trading volume, in turn, fell 44% to $309 billion.

At the same time, Coinbase spent heavily to fund its growth initiatives. Declining sales combined with rising expenses led to the company posting a net loss of $430 million, compared to net income of $840 million in the fourth quarter and $771 million in the year-ago period. That resulted in a net loss per share of $1.98. Analysts had expected Coinbase to report per-share profits of $0.17. 

Now what

With the prices of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and many other cryptocurrencies declining further so far in the second quarter, Coinbase warned of a continued deterioration in its transacting user and trading volume metrics. Yet the company plans to sustain its investments in the build-out of its non-fungible tokens (NFTs) marketplace and crypto derivatives exchange, so expense levels are projected to remain relatively high. Thus, investors are concerned that Coinbase could rack up more losses in the quarters ahead. 

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

The post Here’s why Coinbase stock crashed today appeared first on The Motley Fool Australia.

More reading

• Why these 2 Nasdaq crypto stocks are getting crushed today
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Joe Tenebruso has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ehereum. 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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The Dicker Data Ltd (ASX: DDR) share price edged higher on Wednesday following the company’s first quarter market update.

At yesterday’s market close, Dicker Data shares advanced 1.63% to $12.47 after spending most of the morning in negative territory.

Dicker Data maintains strong dividend payout

The IT distributor announced its equally second biggest ever dividend to investors which helped propel the company’s shares forward.

In its release, the Dicker Data board declared a fully franked interim dividend payment of 13 cents per share. The company pay dividends every 3 months as opposed to a bi-annual basis like most other dividend-paying ASX businesses.

Previously, its quarterly dividends consisted of 9 cents per share before declaring a 15 cent per share final dividend.

Management stated that the proposed rate for the interim dividends for FY22 will also be 13 cents per share. This brings the total proposed dividends to be paid in FY22 to 54 cents per share, up 44% on FY21.

The company’s dividend policy is to pay out 100% of after-tax profits, and thus will retain paying quarterly dividends.

However, to provide consistency and certainty for investors, Dicker Data noted that each interim dividend will be at an equal rate.

The record date for the final dividend falls on 16 May, with payment following on 1 June 2022.

Dicker Data share price snapshot

Over the last 12 months, Dicker Data shares have accelerated by around 35%, however year to date is 16% lower.

It’s worth noting that the company’s shares touched a 10-month low of $11.60 on Tuesday before recovering lost ground.

On valuation grounds, Dicker Data commands a market capitalisation of roughly $2.12 billion, with a trailing dividend yield of 3.47%.

The post Everything you need to know about the latest Dicker Data dividend appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in Dicker Data Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data 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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