Category: Stock Market

The S&P/ASX All Ordinaries Index (ASX: XAO) is down 0.85% in late afternoon trading at 7,539 points. A bunch of ASX shares are falling with the benchmark to hit new 52-week lows — which begs the question, is this opportunity knocking?

We profile three of these ASX shares below.

Bigtincan Holdings Ltd (ASX: BTH) 

The first ASX share to look at is enterprise mobility software provider, Bigtincan. It’s trading at 63 cents on Wednesday afternoon — down 7.34% — and hit a new 52-week low of 61 cents earlier. We haven’t heard any price-sensitive news from Bigtincan since 25 February when it released a very pleasing half-year report. Revenue hit a record $45.9 million — up 142% on the prior corresponding period (pcp). Annualised recurring revenue (ARR) was $112 million — up 132%. Plus, the company turned its adjusted EBITDA around to $1.2 million in the green compared to $3.6 million in the red in the prior period. Bigtincan CEO David Keane described 1H FY22 as a “transformational period”, particularly due to the Brainshark acquisition. All sounds very positive, right? Well, get this. The stock has tumbled by 23% since that report was released. Is this a classic buying the dip opportunity? For perspective, the 52-week high is $1.53.

Marley Spoon AG (ASX: MMM)

You might remember when ASX share Marley Spoon was among the most spectacular COVID-19 winners. Of course it was — those home-delivered meal packages came in very handy during the lockdowns. The Marley Spoon share price flew during the first six months of the pandemic. It went up a remarkable 1,024% from 29 cents to around $3.20 between mid-February and mid-August 2020. Yep, no kidding. The All Ords fell 13.3% over the same period. But as society has gotten a handle on the virus, the share prices of some of the pandemic winners have returned to Earth. The Marley Spoon share price has been dwindling downwards since July 2021. This morning it hit a 52-week low of 38 cents. It later rebounded to 41 cents — a healthy daily gain of 7.89%.

Megaport Ltd (ASX: MP1)

Megaport is down 0.11% at the time of writing to trade at $8.90. Earlier it dipped to $8.55, which was a new 52-week low for the ASX tech share. A recent quarterly update disappointed ASX investors, with the Megaport share price dipping 18% on the day it was released. But this might be an opportunity, according to Goldman Sachs. The broker continues to rate the network-as-a-service (NaaS) provider a buy. However, it has cut its price target for Megaport shares to $13.10. Goldman believes “the long term opportunity for MP1 is unchanged.” Megaport’s 52-week high is $22.

The post Is this opportunity knocking? 3 ASX shares hitting 52-week lows today appeared first on The Motley Fool Australia.

More reading

• 3 ASX All Ordinaries shares leaping 5% or more on Wednesday
• 48% fall: Fund names 3 ASX shares to take off after heavy crash
• Top broker tips Megaport share price to rebound 45%
• 5 things to watch on the ASX 200 on Tuesday
• Brokers name 2 ASX shares to buy after the tech selloff

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BIGTINCAN FPO, Goldman Sachs, MEGAPORT FPO, and Marley Spoon AG. The Motley Fool Australia owns and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended MEGAPORT FPO and Marley Spoon AG. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. In afternoon trade, the benchmark index is down 0.9% to 7,253.6 points.

Four ASX shares that are falling more than most are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 4.5% to $6.43. This follows broad weakness in the tech sector on Wednesday. For example, at the time of writing, the S&P/ASX All Technology Index is down a sizeable 1.8%. Investors have been selling tech shares following a very poor night on the tech-focused Nasdaq index.

Block Inc (ASX: SQ2)

The Block share price has sunk 6% to $139.97. This mirrors a similar decline by the payments company’s NYSE listed shares overnight. As with Appen, investors were selling Block’s shares amid significant weakness in the tech sector. This was driven by investors dumping equities on fears of an economic slowdown.

Life360 Inc (ASX: 360)

The Life360 share price has crashed 27% lower to $3.92. This was despite the location technology company’s quarterly update revealing a 129% increase in revenue to US$52.7 million and a 73% jump in annualised monthly revenue to US$166.1 million. News that the company is scrapping its US dual listing plans could be having a negative impact on its shares. This appears to have sparked fears that a capital raising will be soon required.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 5% to $9.69. Investors have been selling this gold miner’s shares following the release of a disappointing quarterly update. According to the release, the gold miner has increased its costs guidance for FY 2022 due to issues at the Pogo operation. Northern Star now expects its all-in sustaining costs (AISC) to be between A$1,600 and A$1,640. This is up from its previous guidance of A$1,475 to A$1,575 per ounce.

The post Why Appen, Block, Life360, and Northern Star shares are dropping appeared first on The Motley Fool Australia.

More reading

• Appen share price tumbles 4% amid ASX tech sell-off
• Why aren’t ASX gold shares performing better in these uncertain times?
• Why is the Block share price slipping 6% today?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Life360 share price tumbles 18% as cash reserves get chewed up

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd, Block, Inc., and Life360, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has always been dominated by large Australian companies that most of us would have at least heard of. Since the ASX 200 is an index that is weighted using market capitalisation, its top shares are also the largest companies.

But let’s take a look at how the ASX 200’s current top dogs were faring at the turn of the millennium. 2000 is starting to feel like a long time ago, so it will be interesting to see how the ASX 200’s top shares were looking back then.

So let’s start with the current top five shares of the ASX 200 Index.

They are as follows:

1. BHP Group Ltd (ASX: BHP)
2. Commonwealth Bank of Australia (ASX: CBA)
3. CSL Limited (ASX: CSL)
4. National Australia Bank Ltd. (ASX: NAB)
5. Westpac Banking Corp (ASX: WBC)

So some familiar household names there. Perhaps amazingly (or not), all five of these companies were also listed back in 2000. There are no Meta Platforms Inc (NASDAQ: FB) or Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)-style players that have come from nothing to claim a top spot here.

Does the ASX 200 song remain the same?

So let’s start with BHP. This ming giant has been around longer than Australia has been a country. But back in April 2000, the ‘Big Australian’ was going for just over $7.40 a share. That’s a far cry (and a lot of dividends) away from the current share price of $46 that we see today. BHP has also spun-off South32 Ltd (ASX: S32) since then as well, so add the value of those shares to the pile.

CBA is another ASX stalwart. In saying that, the banking giant actually used to be a government-owned company, so it doesn’t have the same corporate bona fides as BHP. But CBA shares were on the ASX by 2000. April of that year saw Commonwealth Bank shares command a share price of $23.70. Interestingly, CBA got close to those levels again during the global financial crisis in 2008, but hasn’t looked back since. Today, the bank is well over $100 a share and is going for $102.94 at the time of writing.

CSL is another ASX 200 share that used to be a government-owned entity. In this case, CSL comes from ‘Commonwealth Serum Laboratories’. But CSL has been a public company for decades now and was indeed well-established on the ASX back in 2000. However, this is the company that has without question experienced the most dramatic ramp up in value over the past 22 years. Back in April 200, you could buy one CSL share for just $6.70. Today, those same shares are currently worth $266.47 each.

What about NAB and Westpac?

Our last two shares to check out are two more members of the famous big four in NAB and Westpac. These two companies might surprise with their performance. In NAB’s case, we saw a share price of $22.47 in April 2000, not too far off of the $32 levels we see today. You only have to go back to December 2020 to find a time where you could get NAB shares at a similar pricing point.

In Westpac’s case, we have a bit of a starker contrast. April 2000 saw this ASX 200 bank at a price of $10.63. Since the bank is asking $23.48 at the time of writing, there has been some more appreciation here.

So that’s how these five ASX 200 stalwarts were looking 22 years ago. Some have given more lucrative returns than others, to be sure. So who knows where they’ll all be in another 22 years. Check back in with the Fool in 2044 to find out!

The post Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000 appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares trim losses despite surging inflation news
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 ASX 200 mining shares defying today’s sell-off to surge higher
• Why is the EML share price tumbling again today?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) multi-day dip appears to be softening on Wednesday, despite Australia’s inflation rate recording its biggest quarterly jump in more than two decades.

The latest consumer price index (CPI) data, released today, shows the nation’s inflation rate has risen 5.1% over the last 12 months.

The finding has likely heightened concerns the Reserve Bank of Australia (RBA) could increase interest rates when it meets on Tuesday.

Interestingly, the news hasn’t outwardly impacted sentiment on the market. At the time of writing, the ASX 200 is sporting a 0.67% dip.

That sees it at its lowest point in more than a month, compressed by what’s now a three-day losing streak.

ASX 200 shares slip slightly amid major inflation jump

ASX 200 shares are recovering from this morning’s tumble after what could have been a devastating blow on Wednesday.

The Australian Bureau of Statistics (ABS) released its latest CPI data today. It found inflation rose 2.1% last quarter, bringing its annual increase to 5.1%.

“The CPI recorded its largest quarterly and annual rises since the introduction of the goods and services tax [in 2000],” said ABS head of prices statistics Michelle Marquardt.

Underlying inflation also increased 1.4% last quarter and 3.7% over the last year – reaching its highest level since 2009.

The biggest drivers of inflation last quarter were new dwellings, higher education, and fuel.

Shortages in building supplies and labour, higher freight costs, and waning federal and state government support paired with ongoing demand boosted the cost of building 5.7% last quarter.

The cost of tertiary education increased 11%, reflecting last year’s update to student contribution bands and fees.

The CPI’s fuel series reached another record level, rising 6.3%, with prices rising every month of the March quarter, according to Marquardt.

The rising cost of food – which increased 2.8% last quarter – didn’t help Australians’ back pockets, as COVID-19 disruptions and weather events took their toll on transport, fertiliser, packaging, and ingredients.

Australians might have also noticed their supermarket spend increase by 4% last quarter. The price of vegetables rose 6.6%, the cost of fruit increased 4.9%, and beef prices surged 7.6%.

Is a rate hike on the cards?

The ASX 200 big four banking shares are predicting interest rates will rise from June. The RBA interest rate is currently at an all-time low of 0.1%.

Westpac Banking Corp (ASX: WBC) is the loudest to herald a rate rise.

It’s predicting the RBA will up the cash rate by 40 basis points in June, according to RateCity. The bank also thinks the rate will reach 2% by June 2023.

Australia and New Zealand Banking Group Ltd (ASX: ANZ) predicts the cash rate will reach that same level. Though, it’s not expecting it until November 2023.

Meanwhile, Commonwealth Bank of Australia (ASX: CBA) is predicting it will reach 1.25% by next February.

Finally, National Australia Bank Ltd (ASX: NAB) expects the cash rate to rise to 2.25% by August 2023, reports RateCity.

The post ASX 200 shares trim losses despite surging inflation news appeared first on The Motley Fool Australia.

More reading

• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is the EML share price tumbling again today?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Down 5% in 2022, is the Telstra share price a buy today?

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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Whitehaven Coal Ltd (ASX: WHC) share price is pushing higher in mid-afternoon trade.

Last Wednesday, the coal miner released its March quarterly report which excited the market. This led the company’s shares to reach a 52-week high of $4.94 that day.

While Whitehaven shares have slightly retraced, they are up 6.14% to $4.67 at the time of writing.

Let’s take a closer look at what could be driving these gains today.

Whitehaven shares on the rise

With no market-sensitive news out of the company since its production report, it appears investors are reacting on a series of broker notes.

Goldman Sachs remains confident on Whitehaven shares, despite cutting its 12-month price target by 1.9% to $5.20. This represents a potential upside of around 11% based on the current share price.

Its analysts believe the miner’s shares are a buy as it is well-placed to benefit from the strong coal prices.

The broker acknowledged the already tight global coal markets which have the potential to be further impacted. It said that the Russia-Ukraine war is putting Russian coal exports at risk based on possible sanctions by European & Asian utilities and steel mills.

In addition, Morgans had a similar view with Goldman Sachs, raising its rating of Whitehaven shares by 2.7% to $5.24.

However, the most bullish broker note came from Ord Minnett, which lifted the company’s shares by 30% to $6 apiece. According to their estimates, this implies an upside of 28% from where the Whitehaven share price trades today.

Whitehaven share price summary

In the past 12 months, Whitehaven shares have surged 270%, with year-to-date gains closing in on 80%.

Whitehaven commands a market capitalisation of roughly $4.74 billion, making it the 103rd largest company on the ASX.

The post Why is the Whitehaven share price accelerating 6% today appeared first on The Motley Fool Australia.

More reading

• Own ASX 200 energy shares? Here’s why Morgan Stanley says the oil price is set to surge
• Why are some ASX coal shares flaming out today?
• Why Alliance Aviation, Life360, Ramsay Health Care, and Whitehaven Coal are racing higher
• Coal hard cash: Here’s why the Whitehaven share price just hit a multi-year high
• Goldman Sachs names 3 ASX 200 mining shares to buy today

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 Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. At the time of writing, the benchmark index is down 0.75% to 7,264.1 points.

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

City Chic Collective Ltd (ASX: CCX)

The City Chic share price is up 4.5% to $2.72. This follows the release of a second half trading update. According to the release, as of 24 April, the plus sized fashion retailer’s second half sales were up 25% year on year. This builds on its first half sales growth of 46%.

Coronado Global Resources Inc (ASX: CRN)

The Coronado share price is up 3% to $2.21. Investors have been buying this coal miner’s shares following the release of its quarterly update. Thanks to a sky high coal price, Coronado reported record quarterly revenue of $947 million. This was up materially year on year and 22.3% on the previous record of US$775 million, which was recorded in the prior quarter.

South32 Ltd (ASX: S32)

The South32 share price is up almost 3.5% to $4.61. This appears to have been driven by a positive response to the mining giant’s quarterly update by a number of brokers. These include Citi and Goldman Sachs, which have both retained buy ratings on South32’s shares. Citi has a $5.50 price target, whereas Goldman has a $5.70 price target.

Syrah Resources Ltd (ASX: SYR)

The Syrah share price has jumped 11% to $1.82. The catalyst for this was the graphite producer’s quarterly update. Syrah revealed strong demand for its Balama natural graphite from the electric vehicle market. Management also reported an increase in its weighted average sales price to US$573 per tonne (CIF). This compares to Balama C1 cash costs of US$464 per tonne.

The post Why City Chic, Coronado, South32, and Syrah shares are charging higher appeared first on The Motley Fool Australia.

More reading

• 3 ASX All Ordinaries shares leaping 5% or more on Wednesday
• Top brokers name 3 ASX shares to buy today
• Coronado share price brings the energy amid the best quarter in its history
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in

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 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is backing up yesterday’s savage selloff with another day in the red so far this Wednesday. At the time of writing, the ASX 200 has fallen by another 0.74% and is now at just under 7,270 points.

But rather than letting that get us down, let’s instead take a look at the ASX 200 shares currently topping the market’s share volume charts, according to investing.com.

The 3 most-traded ASX 200 shares by volume this Wednesday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara Minerals is our first company to take a look at today. So far, a notable 26.18 million Pilbara shares have been bought and sold on the markets. This elevated volume doesn’t seem to be a result of anything out of the company itself. So we can assume that it is the movements of the Pilbara share price itself that is the root cause here. Pilbara has had a dreary day of trading this Wednesday. It’s currently down by 2.44% at $2.60 a share.

AVZ Minerals Ltd (ASX: AVZ)

Another ASX 200 lithium share is next up with AVZ Minerals. We have seen a sizeable 26.72 million AVZ shares change hands on the markets as it currently stands. Again, there are no major developments out of the company itself, so it seems like we have another share price movement to thank for this high trading volume. And lo and behold, the AVZ share price has indeed made a big move today. The company is currently down by a nasty 4.72% at $1.01 a share right now.

Liontown Resources Ltd (ASX: LTR)

Our final and most traded share of the day is none other than a fellow ASX 200 lithium stock in Liontown Resources. So far today, a whopping 27.39 million Liontown shares have found a new home on the ASX. Once more, it appears as though Liontown’s share price fall is to thank for this elevated volume. The company hasn’t suffered as much as AVZ. But the Liontown share price is still underwater by 2.4% so far today at $1.41 a share. 

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why is the EML share price tumbling again today?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Down 5% in 2022, is the Telstra share price a buy today?
• 2 ASX 200 blue chip shares to buy in May: Analysts
• 5 things to watch on the ASX 200 on Wednesday

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 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 Bruce Jackson.

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The Splitit Ltd (ASX: SPT) share price is up 18.42% in afternoon trade.

But for most of Wednesday the buy now, pay later (BNPL) player has soared around 30% higher, peaking mid-morning at 26 cents – a pop of 36.84%.

However, this comes on a day the ASX is seeing a lot of declines, particularly with the ASX tech share space.

For example, at the time of writing, the Zip Co Ltd (ASX: ZIP) share price is down over 4.6%, the Block Inc (ASX: SQ2) share price is down 6%, and the Sezzle Inc (ASX: SZL) share price is down 7.22%.

So, why is the BNPL ASX share up so much?

What’s impacting the Splitit share price?

The ASX has queried the BNPL company about why the Splitit share price has jumped so much.

Splitit said it was “not aware of any information” that hadn’t been announced that would explain today’s trading. It said that it had announced all material price-sensitive information.

Annual general meeting

Splitit is scheduled to hold its AGM on Thursday 28 April.

The company hasn’t given any indication about any updates that it may reveal. However, it will have an opportunity to tell investors how it performed in the three months to March 2022. It may also be able to tell investors about any new merchants that it has won as well.

It will be interesting to see if the BNPL business does reveal anything tomorrow that may be deemed as price sensitive, or influential on the Splitit share price.

The post The Splitit share price just popped 30%. What’s with this ASX BNPL share? appeared first on The Motley Fool Australia.

More reading

• March was a lousy month for ASX BNPL shares. Here’s why

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. owns and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The All Ordinaries Index (ASX: XAO) is having a bit of a rough time of it today, down 0.6% after earlier posting losses of more than 1.1%.

But not all ASX All Ordinaries shares are lagging.

Below we look at 3 of today’s outperformers.

ASX All Ordinaries shares bucking today’s selloff

First up we have Syrah Resources Ltd (ASX: SYR).

The Syrah Resources share price is up an impressive 8.9% at time of writing, trading at $1.80 per share.

The miner’s primary focus is the production and sale of natural flake graphite from its Balama Graphite Operation in Mozambique.

Syrah looks to be benefiting from some potential profit hunting after the ASX All Ordinaries share fell 4.3% yesterday.

The company also released its quarterly activities report for the 3 months ending 31 March today, with some strong results.

Among the highlights, Syrah Resources reported growth in demand for its Balama natural graphite end uses, citing an 80% year-on-year increase in global electric vehicle sales in the Q1. It also reported a “significant sales order book” with more than 90 kilotons of natural graphite sales orders in the upcoming quarters.

Moving on…

Iron ore rebound lifting miners

Our second ASX All Ordinaries share to gain strongly today is Mount Gibson Iron Limited (ASX: MGX), up 9.1%.

As the name suggests, Mount Gibson mines iron ore, primarily out of Western Australia.

The company looks to be benefiting from 2 factors helping support the price of other ASX iron ore miners today as well.

First, Mount Gibson’s share price plummeted 13.5% in yesterday’s trading, meaning there’s likely some bargain hunting afoot.

Second, yesterday’s plunge came after iron ore prices crumbled 9.7% on fears that China’s zero-COVID policies could hamstring its economy and appetite for Australian iron ore.

Today, iron ore prices lifted 2.4% to US$138.95 per tonne, likely helping boost the Mount Gibson Iron share price.

Another strong ASX All Ordinaries share on Wednesday

Finally, we move on to Downer EDI Limited (ASX: DOW).

The integrated services company was up a notch over 5% earlier this afternoon and is currently up 4.9% from yesterday’s closing price of $5.09 per share.

Like our other 2 ASX All Ordinaries shares above, Downer looks to be partly benefiting from some bargain hunting, after its shares fell 7.6% yesterday.

Downer also released its investor day presentation this morning.

Potentially driving ASX investor enthusiasm, the company forecasts a weighted average compound annual growth rate (CAGR) of 7-8% in its urban services portfolio. The company also reported on new energy and decarbonisation opportunities across its customer base.

The post 3 ASX All Ordinaries shares leaping 5% or more on Wednesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Why is everyone talking about graphite and which ASX stocks have exposure?
• 3 ASX All Ordinaries shares rocking all-time highs today
• How the federal election will impact ASX shares: top economist
• This forgotten battery metal ‘looks like lithium 3 to 5 years ago’: analysts

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 Bruce Jackson.

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The Webjet Ltd (ASX: WEB) share price has been gradually treading upwards in recent times. This comes as the online travel agent emerges from hibernation following the steady reopening of the travel industry.

Nonetheless, investors appear to have mixed feelings when it comes to the value of Webjet shares in the current climate.

At the time of writing, Webjet shares are exchanging hands at $5.89, down 0.17%.

How do you value the Webjet shares?

The most common way to value an ASX share is to calculate the company’s price-to-earnings (P/E) ratio. Traditionally, this metric is used to provide more clarity as to whether a company is overvalued or undervalued.

A P/E ratio can be broken down as the relationship between a company’s share price and its earnings per share (EPS).

Currently, Webjet has a negative P/E ratio of 4.67. The formula to work out the P/E ratio is the current share price divided by EPS.

Essentially, this means that the company has become unprofitable when adding up the earnings for the past four fiscal quarters.

Government-mandated lockdowns, as well as restrictions on international and domestic travel, have significantly weighed on the company’s revenue streams.

However, after two years of the company laying dormant, borders are now opening up as travel momentum builds.

In Webjet’s first-half results, released in November, management highlighted a much-improved performance since the COVID-19 ravaged years.

Management reported a cash surplus of $3.5 million per month, a significant turnaround compared to FY21. Severe lockdowns led the company to record an average monthly cash burn of $5.5 million in the previous financial year.

Net profit after tax (NPAT) stood at a loss of $61.8 million for the first half compared to the $132.2 million loss in the prior corresponding period.

Webjet noted that TTV could reach pre-COVID levels by the second half of FY23. The group portfolio will be a much leaner business, having trimmed 20% of operating costs.

Of course, macroeconomics will always play a part in the company’s share price. With the Webjet share price down 40% from pre-pandemic levels, you could argue the company still has some runway left.

All eyes will be on Webjet’s full-year results which will be released late next month.

Webjet share price snapshot

Over the last 12 months, Webjet shares have travelled 15% higher as the travel industry begins to recover.

Most of these gains, however, have come year to date, up 14%.

Based on valuation grounds, Webjet has a market capitalisation of around $2.24 billion.

The post How do you value the Webjet share price in April 2022? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• 3 excellent growth shares experts are tipping as buys
• The Webjet share price has leapt 12% in 2 weeks. Could this be the start of something? 
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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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