The Over the Wire Holdings Ltd (ASX: OTW) share price is charging higher today on the back of a business update and new strategic partnership.

Over the Wire is a telecommunications, cloud and IT solutions provider that specialises in converged voice and data networks, data centres, and hosted infrastructure solutions for corporate clients.

The company owns a carrier-level network with points of presence in all major Australian capital cities and Auckland, New Zealand.

What did Over the Wire announce?

This morning, the company revealed that the current pandemic and associated restrictions have generated strong demand for its voice offering, resulting in higher volumes. This increase in voice volumes has positively offset the delay in some data services due to customer site access restrictions during lockdown.

What’s more, Over the Wire’s exposure to customers in the hardest-hit industries of retail, hospitality and travel is limited, with those most affected representing less than 3% of its recurring base.

While COVID-19 has affected its non-recurring business, recent orders from customers indicate the company is now likely to deliver more than 70% of its non-recurring revenue forecast.

On the whole, Over the Wire noted that it continues to generate positive operational cash flow, maintains a strong balance sheet, and its recurring business is in line with expectations.

The company remains confident of being within 3% of consensus, which comprises revenue of $90.4 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $17.4 million.

Commenting on business performance, managing director Michael Omeros said:

“Although the COVID-19 pandemic has created uncertainty and challenging market conditions our team has shown focus and resilience which should be commended. We are satisfied with how the business is currently tracking and confident about achieving positive growth into next financial year.”

Partnership with NEXTDC Ltd (ASX: NXT)

On top of the business update, Over the Wire also announced a strategic partnership with S&P/ASX 200 Index (ASX: XJO) share NEXTDC. Over the Wire will migrate core elements of its network and private cloud infrastructure into NEXTDC’s tier 4 facilities.

Over the Wire described this partnership as a “foundational building block” that will bring its network closer to many of the world’s leading cloud providers and cloud on-ramp services. Additionally, the partnership will allow Over the Wire to further develop its multi-cloud strategy in conjunction with its current private cloud offering.

“NEXTDC forms an integral part of our multi-cloud strategy and we are excited to be on the journey with NEXTDC, as they continue to build out next generation data centres that are enabling the growth of the digital economy,” said Mr Omeros.

At the time of writing, the Over the Wire share price is sitting 6.35% higher at $3.18 after soaring as much as 10.7% at around midday. Like most small-cap ASX growth shares, Over the Wire shares took a tumble in the wake of COVID-19 and are currently down 30% year to date.

More reading

• 3 fantastic ASX growth shares I would buy and hold for decades
• New to investing? Put $500 into these top ASX 200 shares
• Where to invest $5,000 in ASX growth shares today
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• 3 explosive ASX growth shares to buy

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Over The Wire Holdings Ltd. The Motley Fool Australia has recommended Over The Wire Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Over the Wire share price climbs 10% as it announces partnership with NEXTDC appeared first on Motley Fool Australia.

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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have retained their buy rating and NZ$22.00 (A$20.55) price target on this fresh milk and infant formula company’s shares. Although the broker suspects that market share gains have slowed, it remains confident that a2 Milk Company is on course to deliver a strong result in FY 2020. In addition to this, UBS isn’t concerned by the recent launch of a2-only products from rivals such as Bellamy’s. It believes a2 Milk Company’s strong brand loyalty will help it fend off the competition. I agree with UBS and believe a2 Milk Company would be a great option for investors.

Nearmap Ltd (ASX: NEA)

Analysts at Goldman Sachs have retained their buy rating and lifted the price target on this aerial imagery technology and location data company’s shares to $2.55. According to the note, the broker was pleased with Nearmap’s market update on Thursday. It is performing better than it expected, which has led to Goldman increasing its forecasts. The broker is now forecasting its annualised contract value growing by a compound annual growth rate of 18% between FY 2019 and FY 2022. The broker also notes that Nearmap has a $2.9 billion opportunity in its current markets, which is materially more than its estimate for revenue of $130 million in FY 2022. I agree with Goldman Sachs and feel Nearmap could be a great long term option.

Telstra Corporation Ltd (ASX: TLS)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating but trimmed the price target on this telco giant’s shares slightly to $3.90. The broker has reduced its earnings estimates slightly to account for negative impacts of the pandemic. Nevertheless, Macquarie believes Telstra will continue to generate sufficient cash flow to maintain its 16 cents per share dividend over the coming years. This equates to a fully franked 4.9% dividend yield. I think Macquarie is spot on and Telstra remains a great option for investors. Especially those in search of income.

More reading

• Ready to invest your first $1,000? Try these 2 ASX shares
• Should you worry about geopolitical events in investing?
• 3 cheap ASX 200 shares I’d buy today
• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• Will the Wesfarmers share price climb higher in 2020?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and Telstra Limited. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Brokers name 3 ASX 200 shares to buy right now appeared first on Motley Fool Australia.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is being weighed down by profit taking in the banking sector. At the time of writing the benchmark index is down 1% to 5,792.5 points.

Four shares which have not let that hold them back are listed below. Here’s why they are charging higher:

The Afterpay Ltd (ASX: APT) share price is up almost 2.5% to $47.15. Investors appear to be taking advantage of a pullback in the payments company’s share price on Thursday to top up their positions. Profit taking led to Afterpay’s shares sliding around 7% yesterday.

The Austal Limited (ASX: ASB) share price is up over 5% to $3.20 after upgrading its revenue and earnings guidance. This morning the shipbuilder advised that its FY 2020 revenue will hit ~$2 billion, while its earnings before interest and tax (EBIT) will be “no less than $125 million”. As a comparison, the company was previously expecting revenue of at least $1.9 billion and EBIT of no less than $110 million.

The Kogan.com Ltd (ASX: KGN) share price has jumped 7% to a record high of $11.32. This is despite there being no news out of the ecommerce company on Friday. However, its shares have been on a tear this month after it revealed very strong sales and profit growth during the pandemic. Investors appear optimistic that the crisis has accelerated the structural shift to online shopping.

The Northern Star Resources Ltd (ASX: NST) share price has surged 7.5% higher to $14.78. Investors have been buying the gold miners today after the price of the precious metal rebounded overnight. This was driven by escalating tensions between the United States and China. It isn’t just Northern Star rising strongly. The S&P/ASX All Ordinaries Gold index is up a solid 3.2% at the time of writing.

More reading

• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
• The best performing ASX 200 stock today may have more room to climb
• 10 quality ASX shares to buy in June
• 5 things to watch on the ASX 200 on Friday
• 4 ASX fintech shares to make you rich

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Afterpay, Austal, Kogan, & Northern Star shares are charging higher appeared first on Motley Fool Australia.

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