Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) is up 0.7% heading into the lunch hour.

The ASX 200 slid immediately following the release of the Reserve Bank of Australia’s minutes. But it’s since recouped that lost ground as investors appear more tuned into company earnings season than inflation concerns today.

Two weeks ago, the RBA hiked rates for the fourth consecutive month in a row. That followed on a period of more than 10 years without a single increase. A period where inflation was often said to be ‘stubbornly illusive’.

With the latest 0.50% increase, Australia’s official cash rate now stands at 1.85%. The interest rate on Exchange Settlement balances, lifted by 0.50% on 2 August, is now at 1.75%.

The ASX 200 is up 1.5% since the 2 August rate hike announcement.

Here’s what today’s minutes reveal.

Rising inflation top concern

RBA board members noted that inflation in many nations had reached the 7% to 10% range.

The board expected inflation in Australia to peak later and higher than it previously thought, but added that “measures of longer-term inflation expectations had declined”.

The RBA’s new forecast sees inflation hitting around 7.75% by the end of 2022, with wages growth starting to pick up.

With rising costs and falling dwelling prices, the board reduced its outlook for GDP growth in Australia in 2022. It now expects GDP growth of 3.25% in 2022 and 1.75% in 2023 and 2024.

Board members noted that inflation in Australia was at its highest level since the early 1990s, and well above the RBA’s 2% to 3% target range.

It was uncertain how much high inflation and increases in interest rates might weigh on consumption, “especially given the robust state of the labour market and accumulated savings”.

As RBA governor Philip Lowe noted earlier this month, the minutes reveal that the central bank expects inflation to peak later in 2022 before falling back to the high end of its target range (some 3%) by the end of 2024.

What can ASX 200 investors expect from the bank next?

According to the minutes:

The increase in interest rates over recent months has been required to bring inflation back to target by ensuring that inflation expectations remain anchored and establishing a more sustainable balance of demand and supply in the Australian economy.

As for what lies ahead, ASX 200 investors can take some comfort in the RBA’s assertion it aims to bring inflation in line while keeping “the economy on an even keel”:

The board expects to take further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path. It is seeking to do this in a way that keeps the economy on an even keel. The path to achieve this balance is a narrow one and subject to considerable uncertainty.

The post ASX 200 shrugs off prospect of further rate rises revealed in RBA minutes appeared first on The Motley Fool Australia.

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More reading

• Is the Bendigo Bank share price in the buy zone following Monday’s sell-off?
• SG Fleet share price rises on FY22 earnings increase
• Seek share price slides despite NPAT soaring 81%
• Challenger share price tumbles 10% on FY22 profit woes
• Temple & Webster share price soars 21% on revenue lift

Motley Fool contributor Bernd Struben 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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If you’ve invested in BHP Group Ltd (ASX: BHP) shares, then you might want to read a little further about the company’s latest dividend.

The mining giant dropped its full-year results this morning, and it didn’t disappoint.

BHP achieved double-digit growth across its key financial metrics on the back of a solid underlying and cost performance.

At the time of writing, shares in the world’s largest miner are up 4.59% to $40.70 apiece.

Let’s take a look at the latest dividend from the company.

BHP boosts final FY22 dividend

The BHP board declared a final dividend for FY22 of US$1.75 per share.

This brings the total FY22 dividend to US$3.25 per share, an increase of 8% compared to FY21’s full-year dividend.

The company has a 50% minimum payout policy. The cash dividend announced today is equivalent to a 77% payout ratio.

In total, record dividends of US$36 billion (US$7.11 per share) have been determined for FY22.

The ex-dividend date for the final dividend falls on 1 September, with payment following on 22 September 2022.

What about the FY23 dividend?

While BHP didn’t give any guidance to its dividend for FY23, we take a glimpse at what one broker thinks.

US-based investment firm Goldman Sachs believes the miner will cut its dividend to US$2.64 in FY23.

This will then be followed by US$2.02 in FY24.

Goldman Sachs’ estimates are being driven by the expectation that iron ore prices will decline over the coming years.

This has already been occurring of late, with the steel-making ingredient currently fetching US$109.50 per tonne. That’s a significant drop from when it was going for US$160 per tonne in March this year.

BHP share price snapshot

Over the last 12 months, the BHP share price has sunk by 12%, but is up 10% in 2022.

It’s worth noting the company’s shares touched a year-to-date low of $35.83 on 15 July before sharply rebounding.

Based on today’s price, BHP commands a market capitalisation of $205 billion and has a trailing dividend yield of 11.81%.

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

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More reading

• BHP share price charges 5% higher on ‘better than expected result’
• BHP share price on watch amid record FY22 profits
• 5 things to watch on the ASX 200 on Tuesday
• 2 ASX 200 dividend shares analysts rate as buys
• Looking to buy BHP shares? Here’s what to watch when the mining giant reports this week

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 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 S&P/ASX 200 Materials Index (ASX: XMJ) is up 1.77% so far on Tuesday, but this one ASX mining share is soaring far higher.

The Gascoyne Resources Limited (ASX: GCY) share price has surged 30% and is currently trading at 35 cents.

Let’s take a look at what this ASX mining share announced this morning.

Why is this ASX mining share lifting?

Investors appear to be reacting positively to a significant high-grade gold discovery at the company’s Dalgaranga Gold Project in Western Australia.

Drilling to the western flank of the Gilbey’s North prospect revealed a new “record intercept” and confirmed a new high-grade lode discovery.

The new results included:

• 59m at 12.5 grams per tonne (g/t) gold from 139m including 13m at 51.1g/t
• 39m at 3.09g/t gold from 99m and 20m at 1.12g/t gold from 156m

Commenting on the news, CEO and managing director Simon Lawson said:

It’s not every day that you see results like this in the WA gold sector and we are incredibly excited by the potential of this newly discovered lode system on the western edge of the Gilbey’s North discovery.

The power of a good geology team and a great drill crew being brought to bear on a fertile high-potential mineral system is immense.

Previously, the company has reported intercepts including 32m at 8.58 g/t gold from 167m, and 54m at 6.55g/t gold from 116m at the “Never Never” Iode.

A mineral resource estimate (MRE) is now taking place, with its release earmarked for late this month.

Share price snapshot

The Gascoyne share price has climbed nearly 3% in the past year, while it has surged 22% year to date.

In the past month, the company’s share price has lifted 52%.

For perspective, the ASX 200 Materials Index has lost nearly 8% in a year.

This ASX mining share has a market capitalisation of around $145 million based on the current share price.

The post Guess which ASX mining share just exploded 30% on a new gold discovery appeared first on The Motley Fool Australia.

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More reading

• Is the Bendigo Bank share price in the buy zone following Monday’s sell-off?
• Seven West Media share price tumbles 5% on full-year earnings
• This stock is beating amazon at its own game
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Motley Fool contributor Monica O’Shea 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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Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are continuing to be sold off on Tuesday after the horror day we saw yesterday for this ASX 200 bank share. The Bendigo Bank share price has slumped another painful 4.55% at the time of writing to $9.43 a share.

After the 8.35% loss we saw yesterday, Bendigo Bank shares have now lost a depressing 12% or so over just this week (and it’s only Tuesday). The catalyst for these falls was, of course, the full-year earnings report for FY 2022 that the bank dropped yesterday.

As we covered at the time, Bendigo Bank reported a 6.9% drop in statutory net profit after tax (NPAT) to $488.1 million. However, cash earnings after tax rose by 9.4% to $500.4 million, while total income was bumped by 0.4% to $1,709.9 million.

Bendigo Bank declared a fully franked final dividend of 26.5 cents per share. That’s the same as last year’s final dividend.

But clearly, investors haven’t been too impressed with what this ASX 200 bank share reported yesterday.

However, after these steep share price losses this week, could this be a buying opportunity for Bendigo Bank shares?

Broker’s thoughts on the Bendigo Bank share price

Well, one ASX broker isn’t as bullish as it was before these earnings came out. As my Fool colleague James covered earlier this month, ASX broker Goldman Sachs had a ‘buy’ rating on Bendigo Bank shares, with a 12-month share price target of $11.89 a share.

At the time, Goldman stated that Bendigo Bank “provides the best exposure of the banks to rising rates, given its overall higher exposure to deposit funding, and higher exposure to rate inert deposits”.

It also stated that:

Furthermore, we highlight that to date, BEN has exhibited better discipline than its regional peers on deposit repricing in the face of higher cash rates, which should also support its NIM performance.

Our assessment of mid-cycle losses has BEN’s exposures as one of the most conservative of the banks we cover, with an estimated over-the-cycle loss rate of just 15 bp, versus 22 bp on average for the major banks. This leaves it well-placed should the macro environment deteriorate more than what is currently implied by our forecasts.

However, yesterday’s earnings seem to have dented Goldman’s opinions. As we covered this morning, Goldman has come out and downgraded its 12-month share price target to $10.60. Even so, that still represents an upside of around 12% from the current share price.

At the current Bendigo and Adelaide Bank share price, this ASX 200 bank share has a market capitalisation of $5.36 billion, with a dividend yield of 5.6%.

The post Is the Bendigo Bank share price in the buy zone following Monday’s sell-off? appeared first on The Motley Fool Australia.

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More reading

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• Better ASX tech buy: Xero or Altium?

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank 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 Seven West Media Ltd (ASX: SWM) share price is plummeting on Tuesday despite the release of what the company’s management called its “strongest financial performance … in over a decade”.

As The Motley Fool Australia reported earlier, the media group posted a 60% increase in underlying after-tax profit – coming to around $201 million – for financial year 2022 and announced an on-market share buyback this morning.

At the time of writing, the Seven West share price is 48 cents, 5.77% lower than its previous close.

Let’s take a closer look at today’s news from the All Ordinaries Index (ASX: XAO) stock.

Seven West share price plunges on full year earnings

The Seven West share price is tumbling following the release of the company’s full year earnings and news of an on-market buyback aiming to snap up 10% of its outstanding stock.

The company clocked a 21% improvement in revenue – lifting to $342 million – and a 35% lift in earnings before interest, tax, depreciation, and amortisation (EBITDA), which came in above guidance at $1.5 billion.

On top of that, its operating costs amounted to nearly $1.2 billion, which was within its guided range, while its net debt deepened to $256.5 million.

Seven West managing director and CEO James Warburton celebrated the company’s financial performance, saying:

These results represent the best Seven television EBITDA results in 11 years, the best EBITDA from West Australian Newspapers in five years, and our best group EBITDA result in six years.

Perhaps it’s the company’s outlook that’s weighing on its stock on Tuesday.

Seven West expects its total TV advertising market to fall this quarter, mainly due to the impact of the Tokyo Olympic Games, broadcast on the company’s free-to-air network last year.

It also predicts its share of total TV revenue will stay flat at 39% this financial year while its operating costs are tipped to come in slightly higher at between $1.2 billion and $1.22 billion.

Today’s fall included, the Seven West share price is trading 22% lower than it was at the start of 2022. Though, it’s still 2% higher than it was this time last year.

The post Seven West Media share price tumbles 5% on full-year earnings appeared first on The Motley Fool Australia.

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More reading

• Seven West Media share price in focus following best financial performance in a decade

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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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.

If you want to find the next great online retailer, you may want to pack a passport. Coupang Inc. (NYSE: CPNG) shares have started to spring back to life, and the South Korean e-tailer is growing faster and doing a few things better than the mighty Amazon.com (NASDAQ: AMZN). We saw that on public display last week with Coupang reporting healthy financial results and raising its guidance. 

Coupang stock has generally been sliding since peaking at $69 on its first day of trading in the springtime of last year, and it isn’t close to setting a new high-water mark anytime soon. However, with the online retailer now more than doubling after bottoming out in the single digits three months ago — up 110% through Friday’s close — it’s a good time to take a fresh look at a promising player trading below last year’s $35 IPO price tag. 

Time is on its side

Net revenue rose 12% to hit $5.04 billion for the three months ending in June. This is roughly in line with expectations, but keep in mind that this is reported revenue for U.S. investors in a climate where the dollar has been rising. Coupang’s top line actually rose 27% on a constant currency basis. The news gets better, as margins improved to the point where it posted a much smaller loss than analysts were targeting. After several periods of bloated deficits, Coupang has now rattled off back-to-back quarters of dramatically less red ink than what Wall Street was expecting.

Coupang also surprised the market by posting its first quarter of positive adjusted EBITDA. The welcome milestone finds the e-tailer now eyeing positive adjusted EBITDA for all of 2022. It was modeling a $400 million deficit on that front earlier this year.  

Coupang hit the market with a model that should make the Amazon boardroom envious. With 100 fulfillment centers across South Korea, it’s within 7 miles of 70% of the country’s population. This gives it a robust moat. Its fleet of drivers get going early. If you place a grocery or merchandise order before midnight, it should be at your door by 7 a.m. the next morning. If you have something you need to return, just leave it outside and let Coupang know. A driver will pick it up the next day. 

It’s not just convenience that finds Coupang raising the bar with what even Amazon can’t match in terms of service closer to home. Coupang is also growing a lot faster than Amazon. 

Period	Amazon	Coupang
FY 2019	21%	51%
FY 2020	28%	91%
Q1 2021	44%	74%
Q2 2021	27%	71%
Q3 2021	15%	48%
Q4 2021	9%	34%
Q1 2022	7%	22%
Q2 2022	7%	12%

Data sources: Amazon and Coupang.

Coupang has routinely been growing revenue two to three times faster than Amazon, and that also holds true for each company’s latest report if you go with the 27% year-over-year revenue increase for Coupang on a constant currency basis. This makes sense. Coupang is much earlier in its growth cycle, even though it’s well entrenched with its market share stronghold in South Korea. 

Growth has certainly slowed at Coupang. This is the sixth consecutive quarter of sharply decelerating growth on a reported basis. This is also the case for the top-line gains on a constant currency basis, as it was a 32% gain for Coupang in South Korea for the first quarter.

The stock has already more than doubled off its springtime low, but it’s still fetching a little more than half of its IPO price. With Coupang continuing to dominate its market — and now improving on the bottom line — it’s one of the more interesting internet retail stocks today. Don’t be afraid of getting your portfolio’s passport stamped. There’s a world of opportunity out there.

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

The post This stock is beating amazon at its own game appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rick Munarriz has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Coupang, Inc. The Motley Fool Australia has recommended Amazon. 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 SG Fleet Group Limited (ASX: SGF) share price is pushing higher this morning amid the company releasing an upbeat earnings report for FY22.

Shares in the vehicle fleet management provider are trading for $2.80 each at the time of writing, a gain of 2.19%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.65% higher.

SG Fleet recorded significant top and bottom line growth across all its operating segments in Australia and overseas.

Let’s check the highlights of the company’s results.

What did SG Fleet report?

• Total net revenue up 58% on FY21 to $313 million
• Net profit after tax (NPAT) up 39% on FY21 to $60.7 million
• Underlying earnings per share (EPS) up 12.4% on FY21 to 21.50 cents
• Fully franked final dividend of 6.81 cents a share
• Total FY22 dividend up 20.2% on FY21 to 15.13 cents per share

Revenues and profitability increased following a surge in demand post-COVID. The company’s order books are currently backlogged and it’s expected to work through them in FY23.

SG Fleet also provided an update on its LeasePlan acquisition, noting that it was “on track,” with the company exploring additional avenues to accelerate its incorporation. 58,857 vehicles were added to the company’s fleet courtesy of LeasePlan, bringing its total to 145,351 vehicles in FY22.

It also noted an uptick in interest for its electric vehicles and decarbonisation efforts with continued enthusiasm from its clients.

What else happened in FY22?

SG Fleet reported top-line growth in all its operating segments across Australia, New Zealand, the United Kingdom, and corporate. The largest increase was reported in the New Zealand operating segment, with revenues jumping from $13.26 million in FY21 to $122.26 million for an 821.37% boost in FY22.

The growth of the New Zealand operating segment was buoyed by a rebound in demand after COVID-19 and by adding and retaining new corporate and business accounts, particularly with small and medium-sized enterprises.

An increase in bottom line earnings before interest, taxes, depreciation, and amortization (EBITDA) was also consistent across the board. Australian earnings increased 22.93% to $72.39 million in FY22.

What did management say?

SG Fleet Chief Executive Officer Robbie Blau commented on the company’s performance in FY22, stating:

All of our businesses have maintained the momentum built up early on in the COVID-19 period. While the Corporate channels have been performing well throughout, we are now also seeing further growth in enquiry levels in the Novated channel. Across all of the Company’s geographies, the Corporate and the Novated channels continued to face the challenge of delivering what remained limited supply against a growing order pipeline.

What’s next?

Global macro headwinds are expected to batter the company’s stock for at least the next twelve months.

SG Fleet stated that a mix of inflation and cost trends “suggest a permanent lift” in the price of used vehicles, which the company relies on for its fleet.

Further headwinds include a difficult supply environment that is not expected to resolve in the next 12 months.

As a result, the delivery of orders is being pushed out. The company cited the war in Ukraine and high demand as causing delays and leading to a significant order backlog.

SG Fleet share price snapshot

The SG Fleet share price is currently up 12% year to date. That’s a better performance than the benchmark index which is down 6% over the same period.

At the current share price, SG Fleet has a market capitalisation of around $957 million.

The post SG Fleet share price rises on FY22 earnings increase appeared first on The Motley Fool Australia.

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More reading

• Seek share price slides despite NPAT soaring 81%
• Challenger share price tumbles 10% on FY22 profit woes
• Temple & Webster share price soars 21% on revenue lift
• Better ASX tech buy: Xero or Altium?
• 5 things to watch on the ASX 200 on Tuesday

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The 4DS Memory Ltd (ASX: 4DS) share price is in free fall, down 65% at the time of writing.

The ASX tech share fell 76% lower to 2.2 cents shortly after the market open and is now trading at 3.2 cents.

4DS, which is focused on the development of non-volatile memory technology, went into a trading halt yesterday at its own request. The company said it would release an announcement “regarding a technical update based on the initial analysis of the wafers received”.

That announcement was released just after the market open today.

As you can likely guess by the plunging 4DS Memory share price, the wafer analysis wasn’t what was hoped for.

Unexpected problems send investors running

The update this morning revealed the initial internal analysis of the company’s Third Platform Lot.

For some technical background, the company’s stated objective is “to develop an Interface Switching ReRAM specifically developed for Storage Class Memory applications that has DRAM-like read speed, has lower than DRAM cost per bit and is non-volatile”.

Commencing in 2021, 4DS Memory undertook several iterations on Non-Platform Lots and Platform Lots. It concluded that the Interface Switching ReRAM displayed characteristics that may be applicable to Storage Class Memory.

The 4DS Memory share price had some big moves up and down during that time as investors digested the commercial potential of the technology.

On 11 April, the company reported that, “The final verification of the efficacy of these process improvements requires electrical testing, which can only be performed on this Third Platform Lot.”

Today, 4DS Memory announced that, “Testing of the memory cells used in the imec megabit memory array showed unexpected problems with scaling the memory cell to small dimensions suitable for Storage Class Memory potential applications.”

The company is conducting further testing but said the primary goal of its Third Platform Lot can’t be successfully completed until this issue is resolved.

Managing director departs

4DS managing director Ken Hurley will leave his position immediately.

In its statement, 4DS said this was a prudent mutual decision to “conserve the Company’s existing cash reserves”.

The 4DS board said:

Ken was engaged for the specific purpose of leading the Company’s commercialization effort, but due to the delays foreshadowed above, the Company believes that his expertise would be more useful to the Company once the Company is further developed in the commercialisation of its technology.

4DS Memory share price snapshot

The 4DS Memory share price was outpacing the benchmark this year, right up until it started trading today.

With today’s big losses factored in, 4DS Memory shares are down 63% year-to-date.

This compares to a 2022 loss of 7% posted by the All Ordinaries Index (ASX: XAO).

The post The 4DS Memory share price just crashed 65%. What happened? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Zip Co Ltd (ASX: ZIP) share price is having a rough time today. It’s down around 6% in what’s proving to be a difficult day for some businesses in the buy now, pay later (BNPL) sector.

This comes on a day when, at the time of writing, the S&P/ASX 200 Index (ASX: XJO) is up 0.6%.

One of the main things that Zip investors may be focusing on is that the Sezzle Inc (ASX: SZL) share price is currently down by around 10%.

For investors that haven’t seen, Sezzle has reported its FY22 half-year result to investors.

While Sezzle and Zip are different businesses, they operate in the same industry and investors may be able to make comparisons and assumptions.

What did Sezzle report?

There were a number of different things that Sezzle said.

It said that underlying merchant sales (UMS) grew by 10.6% to US$869.6 million, active merchants increased 18.1% to 47,642, active consumers increased 18.2% to 3.4 million, repeat usage improved 193 basis points to 93.50% and total income rose 6.5% to US$56.9 million.

In the second quarter of 2022, the business ceased payment processing activities in India. It’s also exploring the potential sale of its European and Brazilian operations.

The company pointed out that its operations depend on consumers transacting with merchants, which in turn can be affected by changes in general economic conditions.

It noted that the retail sector could be affected by factors like unemployment, interest rates, consumer confidence, economic recessions, downturns or extended period of uncertainty or volatility.

Sezzle also pointed out:

In weaker economic environments, consumers may have less disposable income to spend and so may be less likely to purchase products by utilising our services and bad debts may increase as a result of consumers’ failure to repay the loans originated on the Sezzle platform. Our industry is also impacted by numerous consumer finance and protection regulations, both domestic and international, and the prospects of new regulations, and the cost to comply with such regulations, have an ongoing impact on our results of operations and financial performance.

A lot of that commentary could certainly be applicable to Zip too.

Expert thoughts

Despite reporting ongoing growth in the FY22 fourth quarter, experts are negative on the Zip share price. In that quarterly update, Zip said its quarterly revenue rose 27% year over year to $160.1 million, customers rose 64% to 12 million and merchants increased 77% to 90,700. 

The Zip cash transaction margin was 2.4%. It also said that its losses in the US and Zip were improving.

Citi rates Zip as a sell, with a price target of $0.70. It’s expecting less growth from the business.

The broker UBS also rates Zip as a sell as well with a price target of just $0.45. That implies a possible drop of 60%. 

Zip share price snapshot

Despite today’s decline, the Zip share price is up around 80% over the past month. 

The post Why is the Zip share price tumbling 6% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Could Block’s ‘superpower’ be an Achilles’ heel for Zip shares?
• These are the 10 most shorted ASX shares
• Top broker warns that the Zip share price could sink 43%
• Does this signify more bad news for ASX BNPL shares like Zip?
• Why is the Block share price tumbling 5% on Wednesday?

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 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 Betmakers Technology Group Ltd (ASX: BET) share price has fallen into the red this morning. At the time of writing, it is down 2.17% to 45 cents.

This comes after the company announced today it had amended a key contract that lifts its minimum revenue cap by $20 million over 10 years.

The betting technology provider rejigged its agreement with NTD Pty Ltd that will see the minimum cap on the annual fee it receives increased to around $100 million over the next decade.

Betmakers supports M&A of its clients

The new terms were struck as part of a deal between Betmakers and NTD for the acquisition of O’Shea Bookmaking Pty Ltd (trading as TexBet). TexBet is a long-standing client of Betmakers.

NTD will acquire TexBet and Betmakers will contribute a total of $2.5 million in two tranches towards the acquisition.

It will also help migrate customers on TexBet to the NTD platform. Betmakers will also provide supervisory support in relation to the trading until the TexBet customer base is fully migrated to the NTD platform.

In exchange, Betmakers won’t only see its minimum revenue cap with NTD lifted. It will also own the intellectual property for the betting platform technology currently owned by TexBet.

The net gaming revenue (NGR) generated from the TexBet customer base will form part of the NGR used to calculate the annual fee payable to Betmakers under today’s revised agreement.

Original agreement with NTD

Betmakers’ subsidiary, OM Apps, was awarded an exclusive agreement with NTD in April this year for a new wagering venture.

The original agreement included minimum revenues of circa $80 million to Betmakers over the 10-year contract. The maximum revenue to Betmakers stands at more than $300 million.

Betmakers will also be paid a platform establishment fee of $2 million. The original agreement also provides it with a launch development fee of $500,000 a month between signing and the go-live date (expected to be October this year).

Betmakers share price snapshot

The Betmakers share price has fallen 62% over the past year and 45% this year to date, but at least it isn’t alone. Other gaming shares have also fared badly. The Pointsbet Holdings Ltd (ASX: PBH) share price has fallen by 60% over the past 12 months and 42% so far in 2022.

The post Betmakers share price slips despite new $20 million deal appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why Baby Bunting, PointsBet, ResMed, and Suncorp shares are dropping today
• Here are the top 10 ASX 200 shares today
• Investors are betting on the Pointsbet share price today, it’s up 7%
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brendon Lau 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 Betmakers Technology Group Ltd and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd and Pointsbet Holdings 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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