The Pushpay Holdings Ltd (ASX: PPH) share price is up 9.90% today after the payment system provider released upgraded guidance at its annual meeting. Pushpay reported solid revenue growth and expanded operating margins, with the company meeting or exceeding all guidance provided to the market over the year. 

What does Pushpay do? 

Pushpay sells a cloud-based online payment solution that centralises donation data and manages payment operations. The company has some 10,896 customers, most of which are US-based churches. 

In December, Pushpay acquired Community Church Builder (CCB), a church management system that provides a platform to connect and communicate with community members. The acquisition strengthens Pushpay‘s value proposition, with a joint product offering launched in April.

How did Pushpay perform in FY20?

Pushpay reported a 32% increase in revenue for FY20, which grew to US$129.8 million in the year to 31 March 2020. This increase pushed Pushpay into profitability, with the company reporting a US$21.7 million profit before tax, up from a loss of US$1.4 million. Operating expenses increased by only 5% thanks to disciplined cost management. 

Customer numbers grew 42% to 10,896, up from 7,649. This drove a 39% increase in total processing volume which reached US$5 billion. Gross profit margin also climbed 5 percentage points to 65%. Over the year, Pushpay processed 25.9 million transactions with an average transaction value of US$195. 

What is the outlook for Pushpay?

Pushpay stands to benefit from the shift to digital as a result of the coronavirus pandemic. This has resulted in increased demand for Pushpay’s services. While digital donations to churches were once uncommon, they are now becoming increasingly prevalent in the US. 

Pushpay has a strategic goal of becoming the preferred provider of mission-critical software in the US faith sector. Its solutions allow churches to create their own apps, manage service schedules, and facilitate digital giving. Despite Pushpay’s strong growth to date, it has still only captured a very small percentage of the market, meaning there is scope for further growth. 

Today, Pushpay updated its guidance for the year ending 31 March 2021. The company now expects earnings before interest, tax, depreciation, amortisation, and fair value adjustments to be between US$50 million and US$54 million, up from US$48 million to US$53 million. 

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Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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.

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The market may have taken a tumble today, but that hasn’t stopped the A2 Milk Company Ltd (ASX: A2M) share price from charging higher.

This morning the infant formula and fresh milk company’s shares jumped 5% to a record high of $20.05.

When its shares hit that level, it meant they were up an impressive 43% since the start of the year. This compares favourably to an 11% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the a2 Milk share price at a record high?

Investors have been buying the company’s shares this year due to its strong performance during the third quarter.

Strong demand for its infant formula during the pandemic led to a2 Milk upgrading its FY 2020 guidance in April.

It now expects revenue to be in the range of NZ$1,700 million to NZ$1,750 million this year. It is also forecasting a stronger than expected earnings before interest, tax, depreciation, and amortisation (EBITDA) margin of 31% to 32%. This compares to its previous EBITDA margin guidance of 29% to 30%.

Based on the top end of its ranges, this guidance implies EBITDA of NZ$560 million in FY 2020. This will be a 35.4% increase on the prior corresponding period.

What else is driving its shares higher?

In addition to the above, investors may have been buying a2 Milk’s shares this week following the release of a positive broker note out of UBS.

According to the note, the broker has retained its buy rating and NZ$22.00 (A$20.64) price target on the company’s shares.

UBS appears to believe there is a chance that a2 Milk will actually outperform its guidance in FY 2020.

Outside this, it has suggested that there could be a new product launch in the medium term. Depending on the market opportunity for this potential product, it seems to think it could be a catalyst to taking its shares up a level again.

Should you invest?

While I think a2 Milk Company’s shares are coming close to being fully valued, I would still buy them if you plan to invest for the long term.

I believe the company has a long runway for growth over the next decade thanks to its expanding footprint and lucrative opportunity in the China market.

More reading

• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Why A2 Milk, Afterpay, Mesoblast, and Temple & Webster are pushing higher
• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance
• Top brokers name 3 ASX 200 shares to buy today
• ASX 200 down 0.1%: Carsales update impresses, a2 Milk surges higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 The a2 Milk share price just hit a record high: Is it too late to invest? appeared first on Motley Fool Australia.

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Investing some extra money in super can have real advantages if you’re looking to build long-term wealth.

Superannuation could mean being a member of an industry fund, a for-profit fund or even running a self-managed super fund (SMSF).

But the basics of super remain the same across all vehicles. Investing in super over and above the 9.5% Superannuation Guarantee from your employer may not be the right decision for everyone. It’s a big decision which will ultimately depend on investment goals, age and income level.

So, how do you know what’s the best way to invest for you?

The benefits of investing in ASX shares

Many pre-set options in super funds won’t allow you to choose your investments as you could outside of super.

For instance, unless you’ve got an SMSF, you probably can’t buy individual ASX shares. That means you may have to leave buying growth shares like Xero Limited (ASX: XRO) for your investment accounts outside of your super fund.

The flexibility that can provide could be a real benefit for an active investor. While investing in super can provide some powerful long-term benefits, many Aussies may not want to lock-up that money until retirement.

For instance, a lot of younger investors may have one eye on buying property. The First Home Super Saver (FHSS) allows you to access up to $30,000 from your super for a deposit. But then many investors may prefer to just avoid the hassle in the first place.

So while it’s true that compounding returns are boosted inside your super fund, investing more than just the 9.5% from your employer won’t suit everyone’s goals and needs.

Why should you be investing in super?

The big factor here is tax. It’s a good time to look at investing in super considering we’re fast headed towards 30 June and the end of the financial year.

Provided the eligibility criteria is met, concessional superannuation contributions are taxed at just 15% inside of super.

For most Australians, that means you can use super to reduce your tax bill at the end of the year, while still boosting your retirement income. Every dollar earned above $18,200 per year is subject to at least 19 cents of tax.

That means that even in the lowest tax bracket there are potential tax savings. However, if your income is above the $180,000 mark, the tax-advantaged status of super really starts to add up. 

Other than just investing for tax reasons, superannuation investments can offer a liquidity premium. Given the long-term horizon of super funds, they can invest in long-term investments like infrastructure and private equity.

These investments aren’t easy to access for the average Aussie investor. That means that you could invest in more than just ASX shares if you’re investing in super. 

This could mean higher returns (due to the liquidity premium on investments) as well as strong diversification options for your portfolio.

Foolish takeaway

Super is a complicated but powerful tool for retirement. As always, it’s best to talk to a financial advisor to determine what’s best for your individual circumstances.

While the potential tax benefits are clear, investing extra money in super can tie your cash up for a long time which won’t suit everyone’s needs.

More reading

• Will Xero shares and these 2 other ASX companies be portfolio staples by 2030?
• 3 ASX growth shares to buy with $3,000
• 5 ASX shares that would’ve made you a fortune in 5 years
• Why I think Xero shares are a great long-term buy
• 3 ASX shares to buy and hold for the next decade

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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