While some readers may find the prospect of investing in ASX shares unappealing given the current uncertain economic environment, others may see it as a smart long-term strategy.

And though recent times have posed significant challenges and future months may continue to do so, due to rising rates and the cost of living crisis, buying ASX shares today could prove to be a sound investment choice.

By allocating funds to a diverse selection of high-quality businesses that are trading at low prices, investors could potentially secure their financial freedom.

Buying high-quality ASX shares today

Investing in ASX shares today undoubtedly presents short-term risks. However, investors may want to consider investing in companies that boast solid financial positions and economic moats. By maintaining robust balance sheets with little or no debt, these companies appear better equipped to weather an economic storm. This could potentially position them for success and allow them to capitalise on the eventual stock market recovery.

There’s another reason to focus on companies with moats. That’s because if smaller challenger businesses struggle to make it through the tough economic environment, the companies with moats may be able to improve their market positions and win vacated market share. This could ultimately lead to to higher share prices and make a positive impact on an investor’s chances of achieving financial freedom.

And if you can identify these high quality companies when their valuations are low, then you’re taking an even bigger step towards your goal. After all, buying any asset at a discount has historically provided greater scope for capital growth as its outlook improves. Warren Buffett agrees and once stated:

Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.

If you’re not sure how to find ASX shares with moats, then you could simply look at the VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT). This ETF has been designed to give investors easy access to attractively prices companies with competitive advantages.

Diversification

Investors need to remember to manage their risk when seeking to achieve financial freedom. Particularly in the current environment.

This means diversifying across a wide range of companies and sectors. Doing so, it may allow an investor to become less reliant on one or a small number of companies for their returns. This may reduce their risk of loss, improve their investment return prospects, and increase their chances of becoming financially free in the future.

The post Here’s how I’d invest in ASX shares today to achieve financial freedom appeared first on The Motley Fool Australia.

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• Why I’m not investing in ASX index ETFs (yet)
• 3 excellent ETFs for ASX investors to buy in March
• I’d aim for a million buying just a few cheap ASX shares!
• 2 ASX ETFs I’d buy for my child for the long term
• 3 ASX shares that could create lasting generational wealth

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 recommended VanEck Morningstar Wide Moat ETF. 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 final day of earnings season has seen a number of ASX 200 shares release their latest results.

Some of these results have gone down well with investors and some have been received less enthusiastically.

Three ASX 200 shares that are making big moves on their results releases are named below. Here’s what they reported:

NextDC Ltd (ASX: NXT)

The NextDC share price has taken a tumble and is down 4% to $9.60. This morning, the data centre operator reported a 10% increase in half-year data centre services revenue to $159.7 million and a 15% lift in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to a record of $97.5 million.

Looking ahead, the company believes it is well-placed to achieve its FY 2023 guidance. Management expects to hit the top end of its revenue guidance of $340 million to $355 million, with underlying EBITDA in the range of $190 million to $198 million.

Nickel Industries Ltd (ASX: NIC)

The Nickel Industries share price is up 3% to 98.7 cents. This follows the release of the nickel producer’s full-year results. Nickel Industries reported an 88.4% increase in revenue to US$1,217 million and a 15.3% lift in net profit to US$159 million.

This was underpinned by a record performance from the company’s RKEF operations, which was matched by an equally strong contribution from the Hengjaya Mine. Pleasingly, management expects its strong performance to continue in FY 2023. This is thanks partly to the completion of the haul road from Hengjaya Mine to the Indonesia Morowali Industrial Park.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price is up 3% to $6.78. Investors have been buying this radiopharmaceutical company’s shares after it reported a big jump in revenue in FY 2022. Telix posted group revenue of $160.1 million, up 20 times on FY 2021’s $7.6 million. This was driven by the commercial launch of the Illucix product.

And while Telix reported a loss after tax of $104.1 million due to a period of investment to scale-up commercial and clinical activities, it currently has a cash balance of $175 million and a pathway to positive cash flow.

The post 3 ASX 200 shares making big moves on earnings announcements appeared first on The Motley Fool Australia.

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• 7 ASX 200 growth shares to buy for possible takeovers: expert
• These ASX tech shares are buys with 30%+ upside: brokers
• Here are the top 10 ASX 200 shares today
• Here are the 10 most shorted ASX shares this week
• Here are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has positions in Nextdc and Telix Pharmaceuticals. 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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It’s been a relatively positive start to the trading day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At present, the ASX 200 has gained a healthy 0.5%, vaulting the index back above 7,260 points. But let’s talk about ASX 200 lithium share Pilbara Minerals Ltd (ASX: PLS).

Pilbara shares are also having a positive day. The leading lithium producer is currently up by a pleasing 0.48% at $4.22 a share, about the same gain as the broader market.

This rise comes despite news that a very large block of Pilbara shares has just been sold.

According to reporting in the Australia Financial Review (AFR) today, an investor has just offloaded more than $250 million worth of Pilbara shares.

Yes, according to the report, ASX broker UBS has just processed a $250 million parcel of Pilbara shares. That would be worth around 2% of the company’s entire market capitalisation.

The parcel was sold this morning, at a share price of $4.10. That’s a little lower than the shares have publically traded at today.

Who has been selling Pilbara shares?

There are reportedly rumours that this chunk of shares has been offloaded by major shareholder Contemporary Amperex Technology (Hong Kong) Limited (CATL). CATL owned a 6.9% stake in Pilbara before market open this morning. CATL has been an investor in Pilbara Minerals since 2019, when it invested $55 million into the company at 30 cents a share.

So if this sale was indeed initiated by CATL, it would represent a pleasing 1,267% return for the company over just four years.

That’s all we know for now.

It is interesting timing for CATL if this company is indeed behind this chunky sale. It was only last week that Pilbara reported its latest half-year earnings.

Investors were delighted when Pilbara announced a 305% surge in sales to $2.18 billion. Not to mention a 989% spike in statutory net profit after tax (NPAT) to $1.24 billion. The company also declared its maiden dividend, an interim payment worth 11 cents per share.

Pilbara shares have had a pleasing run in 2023 thus far. The lithium share is up a healthy 16.44% year to date. Today, the shares are sitting 55.35% higher than where they were a year ago. However, the company is also a good 25% or so below its all-time high of $5.66 a share that we saw back in November last year:

At the current Pilbara share price, this ASX 200 lithium share has a market capitalisation of $12.62 billion, with a forward dividend yield of 2.61%.

The post Someone just sold $250 million of Pilbara Minerals shares. Here’s what we know appeared first on The Motley Fool Australia.

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More reading

• 3 incredible ASX 200 growth shares to buy: analysts
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• Here’s what brokers are saying about the Pilbara Minerals share price
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Accent, Brambles, Infomedia, and Pilbara Minerals shares are pushing higher

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 Scott Phillips.

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Qantas Airways Limited (ASX: QAN) shares are up 1.5% in Tuesday trading as we head into the lunch hour.

The S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.28 per share. Shares are currently changing hands for $6.38 apiece.

That’s today’s price action for you.

Now, what’s this about a new contender for the top job?

A three-way race for the top job?

Qantas shareholders won’t know for some time yet who’ll be taking over the reins of the ASX 200 airline.

Long-standing CEO Alan Joyce has reiterated that he will remain in the top post until “at least” the end of this year.

But that’s not stopping analysts from speculating.

The two most likely candidates to date were Vanessa Hudson, Qantas chief financial officer, and Olivia Wirth, the CEO of Qantas Loyalty.

Now they’ve been joined by a new potential contender, Cameron Wallace, a former executive at Air New Zealand.

This comes as Qantas returns the management of its domestic and international segments to two separate portfolios, requiring two CEOs. The two segments, which were combined during the pandemic, will be separated commencing 1 July.

It also comes with the announcement that the current CEO of the combined Qantas Domestic and International portfolio, Andrew David, is retiring in September.

Wallace will take over as CEO of Qantas International and Freight from 1 July.

David will stay on as CEO of Qantas Domestic until his retirement. Qantas said it will soon commence a recruitment process for a new CEO of Qantas Domestic, to take over from David in September.

“At the start of the pandemic, we rationalised the two CEO roles for Qantas Domestic and Qantas International down to one given what was happening to our business,” Joyce said.

Joyce added:

With Andrew retiring and given the amount of investment now in the pipeline, it makes sense to again have separate CEOs for the International and Domestic businesses, which are both back to generating billions in revenue each year…

The Qantas Group has always been able to attract top talent and Cam Wallace is one of the best airline executives in the region.

Wallace said Qantas is “the world leader in opening up direct international routes, and Project Sunrise is one of the most exciting things happening in aviation”.

How have Qantas shares been faring?

As you can see on the chart below, Qantas shares have strongly outperformed over the past 12 months, up 26%.

The post Own Qantas shares? Guess who just joined the race to be the next CEO appeared first on The Motley Fool Australia.

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• Broker tips Qantas share price to fly significantly higher
• Here are the top 10 ASX 200 shares today
• 6 ASX shares to pounce on from a boom reporting season: Morgans
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• Buy these ASX 200 shares following their results: Goldman Sachs

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 Sayona Mining Ltd (ASX: SYA) share price has had a rough trot so far this month despite plenty of seemingly good news from the S&P/ASX 200 Index (ASX: XJO) lithium hopeful.

After ending January trading at 26 cents, the stock is trading at 22.7 cents with less than four hours left of trading for the month. That marks a 12.7% tumble over the course of February so far.

For comparison, the ASX 200 has dumped around 3% so far this month.

At the same time, many of Sayona’s fellow lithium up-and-comers have also struggled. Here’s how some other lithium favourites have performed during February:

• The Core Lithium Ltd (ASX: CXO) share price has fallen 20%
• Lake Resources NL (ASX: LKE) shares have tumbled 26%
• Stock in Liontown Resources Ltd (ASX: LTR) has dumped 15%

So, what’s been going on with the Sayona share price lately? Let’s take a look.

It’s been a rough month so far for Sayona shares

The market has technically digested two price-sensitive announcements from the ASX 200 lithium share this month.

The first dropped after the market closed on 31 January. That was Sayona’s report for the quarter ended 31 December.

Perhaps most exciting was news the company had processed 400 tonnes of spodumene ore as part of the commissioning of its North American Lithium (NAL) operation’s concentrator. It also kicked off a pre-feasibility study looking at the potential to produce lithium carbonate at the operation.

Sayona provided another update on NAL’s restart a few weeks later, sending its share price tumbling 2%. Then, it stated the operation was on budget and on track to restart in March, with concentrator restart and construction progress at 96%.

In a non-price sensitive update released yesterday, the company revealed it’s now restarted process operations and is just days away from producing saleable lithium at NAL.

The next step after the restart will be its maiden spodumene shipment – tipped to occur in July. It expects to send off four shipments in the first half of financial year 2024.

But such progress hasn’t deterred short sellers. As of the most recent data, a record 10.68% of Sayona’s shares are being shorted – up from 8.84% at the end of last month.

That might be due to concerns surrounding lithium prices, with some market experts tipping the value of the battery-making material will tumble in coming years.

The post Why did ASX 200 lithium share Sayona dive 13% in February? appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Monday
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• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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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The share price of S&P/ASX 300 Index (ASX: XKO) tech stock Bravura Solutions Ltd (ASX: BVS) won’t be going anywhere today.

Trading of the stock has been suspended following a two-session-long trading halt as the company considers its business performance, its guidance, and contemplates a capital raise.

The Bravura Solutions share price last traded at 85 cents.

Let’s take a closer look at what appears to be going on with the ASX 300 tech share.

Bravura Solutions share price suspended, earnings delayed

Those invested in Bravura Solutions shares likely expected to flick through the wealth management and administration software provider’s first-half earnings this morning. Instead, they’ve been left with a potentially ominous message.

The company has delayed the release of its earnings, potentially until the very last minute – 6 March. And the market could be forced to wait until the following day to trade in the stock.

In the meantime, it’s flagged a potential capital raise. Though, it didn’t clarify why it might need extra cash.

Bullish market watchers might be anticipating news of an acquisition. Bears, on the other hand, might be expecting the company’s earnings to reveal a decimated cash position.

The company warned its financial year 2023 performance would likely come in below expectations in November.

It said its revenue should increase modestly year-on-year while customer spending trend lower and three legacy contracts wind down in Europe, the Middle East, and Africa (EMEA). Meanwhile, operating costs were tipped to grow between 16% and 20%.

It forecast its first-half earnings before interest, tax, depreciation, and amortisation (EBITDA) to come in between $10 million and $15 million. Meanwhile, its net profit after tax (NPAT) was tracking to be flat at best and a $5 million loss at worst. Bravura Solutions continued:

The company has sufficient liquidity comprising $29 million of cash and $19 million of available debt facility, as at [2 November], and the current and planned initiatives to reset the company are expected to be managed within the existing capital structure.

Board changes

The ASX 300 tech share also revealed three major board changes today.

Director Alexa Henderson has stepped down from the board. She walked away holding 10,000 shares in the company, while her spouse has 201,975 shares in their superannuation fund.

Meanwhile, Andrew Russell and Russell Baskerville have been appointed to the board.

Chair Neil Broekhuizen thanked Henderson for her contribution to the board and commented on the appointment of Russell and Baskerville. He said:

They not only bring extensive technology knowledge but also change management, transactional and governance capabilities along with an entrepreneurial spirit. Their expertise will be most valuable as we implement our restructuring program to set the business up for a return to profitable growth.

Bravura Solutions share price snapshot

The last few years have been disastrous for the Bravura Solutions share price. It’s tumbled 49% since this time last year and is currently 86% lower than its $6.10 peak – reached in 2019.

The post Why is ASX 300 tech share Bravura Solutions suspended? appeared first on The Motley Fool Australia.

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• Why did the CSL share price outperform the ASX 200 in February?
• ‘Still waiting for it to ‘appen’: Broker gives its verdict on the Appen share price
• Are Woodside shares a buy following the ASX 200 energy giant’s bumper results?
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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 positions in and has recommended Bravura Solutions. The Motley Fool Australia has positions in and has recommended Bravura Solutions. 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 CSL Limited (ASX: CSL) share price managed to beat the return of the S&P/ASX 200 Index (ASX: XJO) during February 2023.

As of midday trading, CSL shares were flat for the month, while the ASX 200 Index had dropped around 3%.

The difference in performance may be explained by two factors.

On the ASX 200 side of things, there has been a sizeable decline in the share prices of some of the largest ASX blue chips, which has an outsized impact on the index.

For example, BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Rio Tinto Limited (ASX: RIO) have all seen their share prices drop, which has pulled the ASX 200 lower.

CSL released its FY23 half-year result mid-month, which investors are likely to have taken into account when considering the CSL share price.

Let’s have a look at some of the numbers.

Earnings recap

CSL likes to tell investors its numbers in constant currency terms so that they are more easily comparable to the last result. This makes it much clearer in the case of foreign exchange rates causing any rise or fall.

The ASX healthcare share reported that revenue increased by 25% in constant currency terms, while underlying net profit after tax (NPAT) increased by 10% to $1.82 billion.

CSL reported strong growth of immunoglobulin and albumin sales, as well as record levels of plasma collections. It also revealed strong growth in its “market leading” haemophilia product IDELVION and “key speciality product” KCENTRA.

It also said its influenza vaccine business, CSL Seqirus, achieved “strong performance”.

The ASX healthcare share noted the successful closure of its Vifor acquisition – it achieved around 15% revenue growth, with integration well underway and cost synergies on track. Vifor provides CSL with “leadership across an attractive portfolio focused on renal disease and diseases of iron deficiency”.

CSL also noted a licence agreement for late-stage self-amplifying mRNA vaccine technology.

The dividend declared was US$1.07 per share and, in Australian dollar terms, it was A$1.55 per share, up 9%.

Did the outlook impact the CSL share price?

Investors are often forward-looking, so what the company has to say about its outlook could have a major impact on market sentiment. It didn’t seem to be much of a surprise to the market.

The strong growth in plasma collection and immunoglobulins “is expected to continue”, CSL said.

The company is also planning to launch HEMGENIX in the US, which it said would change people’s lives. Management also said that the rest of its research and development pipeline is in “great shape”.

CSL Seqirus continues to perform “strongly” and will deliver “another profitable year”, though a loss is expected in the second half because of the seasonal nature of the business.

The company’s underlying net profit is expected to be between $2.7 billion to $2.8 billion at constant currency.

CSL share price snapshot

While CSL shares were flat for February 2023, they are up more than 5% in 2023 to date.

The post Why did the CSL share price outperform the ASX 200 in February? appeared first on The Motley Fool Australia.

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• This ASX 200 travel share is experiencing turbulence. I think it’s a buy

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 CSL. 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 Appen Ltd (ASX: APX) share price has continued its slide on Tuesday.

At the time of writing, the struggling artificial intelligence (AI) data services company’s shares are down 4.5% to $2.25.

This means the Appen share price is now down almost 70% over the last 12 months.

Why is the Appen share price falling?

Investors have been hitting the sell button again on Tuesday after brokers responded negatively to the company’s full-year results release from yesterday.

One of those brokers was Bell Potter, which has retained its hold rating and cut its price target by 25% to $2.25.

This is now in line with where the Appen share price trades following today’s decline.

What did the broker say?

Bell Potter notes that Appen’s full-year result fell short on the top line but was in line on the bottom line. While the latter was positive, this was then offset by “weak” operating cash flow and its soft guidance. In respect to its guidance, it said:

Appen did not provide any formal 2023 guidance. The company did, however, say there has been “a soft start to 2023” and 1H2023 EBITDA is expected to be materially lower than 1H2022. Appen also said it had identified annual cost savings of ~US$10m and the benefits will commence in 2H2023. The company has withdrawn its 2026 targets pending a full strategic review in May.

As a result of this, the broker is “still waiting for it to ‘appen” and has downgraded its earnings estimates materially for the coming years. Though, it even appears to believe that those could be challenging to achieve. The broker adds:

We have downgraded our underlying EBITDA forecasts in 2023 and 2024 by 53% and 48% which has been driven by an 11% reduction in our revenue forecasts in each period and also lower margin assumptions. We now forecast underlying EBITDA of US$14.7m in 2023 which is an improvement on the US$11.0m in 2022 but this assumes a large earnings skew to the second half.

The post ‘Still waiting for it to ‘appen’: Broker gives its verdict on the Appen share price appeared first on The Motley Fool Australia.

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• Why Appen, Downer, Fortescue, and Invocare shares are crashing today
• Appen share price crashes on US$239m FY22 loss
• This ASX tech share’s rallied 16% in 2 months. Here’s why
• Dash for trash fades as earnings cliff looms for ASX shares, with the market shooting first and asking questions later
• Appen shares dive again. Are they cheap enough to buy?

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 Appen. 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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Woodside Energy Group Ltd (ASX: WDS) shares are pushing higher on Tuesday.

In morning trade, the energy giant’s shares are up 2% to $35.84.

This latest gain means the Woodside share price is now up 26% over the last 12 months.

Where next for Woodside shares?

Unfortunately, one leading broker believes the Woodside share price has now climbed beyond fair value.

According to a note out of Morgans, in response to its full-year results, the broker has retained its hold rating and $33.60 price target.

This suggests that its shares could slide over 6% from current levels over the next 12 months.

The broker also warned that Woodside would be unlikely to pay such a large dividend again in FY 2023 and is forecasting a reduction from US$2.53 per share to 75 US cents per share.

What did the broker say?

Morgans notes that the Woodside’s full-year earnings were ahead of its estimates but fell short of consensus expectations in FY 2022. It said:

WDS reported a softer than expected 2022 earnings and dividend result, relative to consensus expectations. Underlying EBITDA US$11,234m (vs MorgE US$10,990m vs consensus US$12,077m), +172% vs pcp. WDS declared a final dividend of USD 144 cps (-8% vs consensus), maintaining an 80% payout ratio of underlying NPAT.

Commenting on future dividends, the broker believes that cuts are coming due to higher capex. Though, it concedes that management could look to maintain them. It adds:

WDS declared impressive dividends for the 2022 year, driven by upsized earnings realised from the acquired BHP-P assets. On the result call, WDS confirmed that it would consider sacrificing its gearing target of 10-20% temporarily in order to maintain its dividend profile in high capex years. WDS’ view is that the target gearing range is a through-the-cycle target so there would be periods when WDS trends above or below that range. We are forecasting dividends to reduce in the coming years as WDS go through a capital-intensive period from FY23-24.

Finally, although the broker is a fan of the company, it simply doesn’t see enough value in the Woodside share price to recommend it as a buy. It concludes:

We have a positive view on WDS in terms of its fundamentals, balance sheet, and asset portfolio; although view its current share price as already reflecting fair value against our expected TSR. Maintain our Hold rating.

The post Are Woodside shares a buy following the ASX 200 energy giant’s bumper results? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• How I’d invest $200 a month in ASX shares to target a $1,000 passive income
• The Woodside dividend has just been boosted by 87%. Here’s what you need to know
• Woodside share price higher on record US$5.23b profit
• Earnings preview: Here are the ASX shares reporting on Monday

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 Scott Phillips.

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The Tyro Payments Ltd (ASX: TYR) share price is rising this morning after the company posted its earnings for the first half of financial year 2023.

Shares in the S&P/ASX 300 Index (ASX: XKO) payment solutions provider lifted 4.9% to peak at $1.715 shortly after open. Right now, the stock is up 0.31% at $1.64.

Tyro Payments share price slips on long-awaited profitability

• $1.1 million of statutory net profit – a 106% improvement on the prior comparable period’s (pcp) $18 million loss
• $21.7 billion of transaction value, a 37.1% jump on that of the pcp
• $216.6 million of normalised revenue – up 45.2%
• $19.5 million of earnings before interest, tax, depreciation, and amortisation (EBITDA) – a 601% year-on-year improvement
• $600,000 of free cash flow – marking its first positive cash flow as a listed company

Tyro Payments posted its first profit since 2015 this morning while revealing its EBITDA soared 601% last half as profits grew faster than costs.

Its payments business benefited from inflation as consumers were forced to fork out more. Its alliance with Bendigo and Adelaide Bank Ltd (ASX: BEN) generated $2.8 billion of transaction value.

Meanwhile, its merchant cash advance loan product generated a record $72.7 million of new loan originations – double that of the pcp. Lending losses came to just 1.2% of originations last half.

What else happened last half?

The number of merchants using Tyro’s platform increased 8.7% over the 12 months ended 31 December to 66,884.

At the same time, its banking business saw 5.4% growth in activated deposit accounts – coming in at 6,400. A total of $95 million is held in deposit with Tyro.

Of course, last half also saw the company approached by two suitors, Westpac Banking Corp (ASX: WBC) and Potentia. It scrapped takeover talks with both in December before granting the latter due diligence in recent weeks.

What did management say?

Tyro Payments CEO Jon Davey commented on the results driving the company’s share price today, saying:

An increased focus on growth, cost management and delivery excellence has led to very pleasing first half results, including a record EBITDA and achieving positive free cash flow for the first time as a publicly listed company.

Over the last six months we have delivered foundational initiatives which will deliver lasting benefits to our competitiveness and growth profile. These include the Tyro Go reader, the Tyro Pro next generation terminal, and automated onboarding. From these we will build new customer experiences and drive further operational efficiencies.

As we look forward, our focus will be on payment and banking product innovation, revenue growth and margin optimisation, operating efficiency, and cost reduction.

What’s next?

The company provided an update on its second-half trading today.

It saw its transaction value lift 23% year-on-year in the first eight weeks of 2023 to $6.3 billion. Simultaneously, its banking business generated $22.5 million of loan originations – a 30% improvement.

Meanwhile, its normalised gross profit for January was $15.4 million – up 39% – while its EBITDA was $3.6 million at an operating leverage of 76.6%.

Tyro Payments also reaffirmed its full-year guidance. It expects its EBITDA to come in at between $37 million and $41 million at a target operating leverage of 79% in financial year 2023.

Tyro Payments share price snapshot

This year has been good for the Tyro Payments share price so far. The stock has gained 19% since the start of 2023. It’s also 6% higher than it was this time last year.

For comparison, the ASX 300 has risen 4% year to date and 2% over the last 12 months.

The post Tyro Payments share price lifts as EBITDA soars 600% appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Tuesday

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 positions in and has recommended Tyro Payments. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Tyro Payments and Westpac Banking. 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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