The National Australia Bank Ltd (ASX: NAB) share price has continued its slide on Thursday.

In morning trade, the banking giant’s shares are down 2% to $31.01.

Why is the NAB share price falling?

Investors have been selling down the NAB share price since the release of the bank’s results on Wednesday.

While this is disappointing, one leading broker sees the weakness as a buying opportunity.

According to a note out of Goldman Sachs, its analysts have retained their buy rating with an improved price target of $35.41.

Based on the current NAB share price, this suggests potential upside of over 14% for investors over the next 12 months.

And let’s not forget the NAB dividend, which Goldman expects to be $1.73 per share in FY 2023. This represents a fully franked 5.6% dividend yield, increasing the total potential return to almost 20%.

What did the broker say?

While Goldman wasn’t blown away with NAB’s cash earnings, which fell 1.5% short of its estimates, it remains positive due partly to its margin outlook. In fact, it has boosted its earnings estimates to reflect higher than expected margins. It explained:

Our FY23/24/25E cash EPS moves by +8.6%/+1.5%/-0.2%, driven by: i) a steeper rise in NIMs in 1H23E, and ii) lower BDDs, partly offset by iii) lower other operating income. As a result, our 12-month TP moves to A$35.41, from A$34.81.

Outside this, the broker continues to believe that NAB provides “the best leverage to the thematic that domestic volume momentum will favour commercial over housing volumes over both the short- and medium-term.”

It also expects that “commercial lending will be better insulated from competitive pressures particularly prevalent in mortgage lending,” which bodes well for NAB given its overweight exposure to this side of the market.

In addition, the broker highlights:

NAB’s cost management initiatives, which seem further progressed vs. peers, has allowed it to deliver the highest levels of productivity over the last three years, and we think this leaves it well positioned for an environment of elevated inflationary pressure (c. A$400 mn productivity savings expected in FY23).

All in all, Goldman believes this makes the NAB share price great value at the current level.

The post Goldman Sachs tips major upside for the NAB share price appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares: Buy, hold, or fold?
• 5 things to watch on the ASX 200 on Thursday
• Everything you need to know about the NAB dividend
• Why is the NAB share price sinking today?
• NAB share price on watch following FY22 earnings miss

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 Invictus Energy Ltd (ASX: IVZ) share price is having a stunning day.

On Thursday morning, the energy explorer’s shares surged as much as 150% higher to 26.5 cents.

Why is this ASX energy share surging?

Investors have been bidding the Invictus Energy share price higher today following the release of an update on drilling activities at the Mukuyu-1 well in Zimbabwe’s Cabora Bassa Basin.

According to the release, an 8.5 inch hole section has been drilled to a depth of 3,086 metres measured depth (mMD).

Pleasingly, elevated mud gas peaks (up to 65 times above background gas baseline) have been observed while drilling through a depth of 3,070 mMD with marked increases from C1 to C5 compounds (methane, ethane, propane, butanes and pentanes).

The company also advised that an initial 100% fluorescence was observed in a downhole cuttings sample of sandstone, retrieved from a depth of approximately 3,070 mMD. This indicates the presence of condensate or light oil when placed under an ultraviolet light.

In further good news, logging while drilling (LWD) analysis has identified further shallower zones of interest within the Upper Angwa, with elevated mud gas readings and LWD resistivity being observed.

Additional potential zones of interest in the Pebbly Arkose and Forest formations also display elevated LWD resistivity.

What’s next?

Invictus Energy advised that all zones of interest will be comprehensively evaluated through a planned wireline logging programme. This will take place once Mukuyu-1 reaches total depth and will allow for the identification of any potential hydrocarbon pay.

Furthermore, a comprehensive wireline logging evaluation suite is planned to be acquired across the entire 8.5 inch hole section. This will provide detailed geological information in order to confirm the presence of moveable hydrocarbons.

All in all, Mukuyu-1 remains on track to be delivered in the previously guided timeframe.

Invictus Energy’s managing director, Scott Macmillan, commented:

Early indications in our Upper Angwa primary target are highly encouraging and have proven a conventional working hydrocarbon system in the Cabora Bassa Basin, which is an exciting development validating our subsurface model.

The presence of elevated mud gas readings, fluorescence in the cuttings, elevated LWD resistivity and increasing background gas with depth is a positive sign as we progress through the Upper Angwa Alternations Member.

We still have several hundred metres of drilling through our primary targets with additional potential, which will be followed by a comprehensive wireline logging programme to evaluate results, with the aim of confirming the presence of moveable hydrocarbons in multiple zones.

The post Guess which ASX energy share is rocketing 150% on an ‘exciting development’ appeared first on The Motley Fool Australia.

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More reading

• Are Woolworths shares worth buying for dividends right now?
• Why did the Bitcoin price just hit 2-year lows?
• Why Ethereum crashed today
• Why is the Origin share price rocketing 40%?
• Worried about your income in retirement? Take a look at these 3 ASX 200 dividend shares

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 share price of dividend-paying supermarket operator Woolworths Group Ltd (ASX: WOW) has underperformed the broader S&P/ASX 200 Index (ASX: XJO) so far this year.

The stock has dumped around 13% since the start of 2022, while the ASX 200 has slumped 8%. Right now, the Woolworths share price is trading at $33.48.

Could its recent downturn make Woolworths shares a dividend buy? Let’s see what experts think.

Are Woolworths shares a dividend buy?

Well, that depends on who you ask.

Top brokers Goldman Sachs and Citi are both bullish on the stock, despite being disappointed by its recent first-quarter earnings.

Woolworths posted a 1.8% increase in group sales for the three months ended 30 September, coming in at around $16.4 billion.

Its key Australian and New Zealand food businesses underperformed despite inflationary effects. Though, their slump was offset by growth in the company’s Big W and business-to-business sectors.

Goldman Sachs commented:

Despite a noisy and softer [first quarter], we remain confident that [Woolworths] is the superior operator within [Australian] supermarkets.

Both Goldman Sachs and Citi trimmed their price targets for Woolworths shares on the back of the update, reducing them to $41.70 and $39.50 respectively, my Fool colleague James reports. Though, that still represents a potential upside of 18% to 24%.

Comparatively, Morgans is decidedly more bearish.

The broker dropped its price target on the stock to $34.10 and retained its hold rating on the back of the supermarket giant’s recent release. It said:

[W]e continue to see the stock as fully valued and continue to prefer Coles Group Ltd (ASX: COL) in the Staples sector.

Speaking of Coles, its dividends far surpass those offered by its larger peer. It’s currently trading with a dividend yield of 3.8%, having handed investors 63 cents per share in dividends in financial year 2022.

That’s superior to the 2.7% yield currently on offer from Woolworths shares. It paid out 92 cents per share in dividends last financial year.

Thus, a dividend-focused investor might prefer Coles shares over Woolworths right now.

The post Are Woolworths shares worth buying for dividends right now? appeared first on The Motley Fool Australia.

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More reading

• Woolworths shares are ‘fully valued’ and investors should buy Coles instead: broker
• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today
• 5 big ASX announcements making news this week
• Goldman says Woolworths share price pullback provides ‘a value entry point to a quality player’

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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 Bitcoin (CRYPTO: BTC) price is in fast retreat.

The world’s original crypto is down 15% over the past 24 hours and down 22% since this time last week.

At the time of writing, BTC is trading for US$15,680 (AU$24,358). The last time the Bitcoin price was at this level was back on 9 November 2020, putting the token at two-year lows.

So, what the heck is going on?

Why are cryptos tumbling across the board?

The Bitcoin price, and indeed the price of most every top crypto, has been hit hard following liquidity issues at global crypto exchange FTX.com.

Co-founded by Sam Bankman-Fried, FTX counts (or is counted) among the top five exchanges in the world.

The liquidity issues began over the weekend.

That’s when Changpeng Zhao, the CEO of Binance (the world’s biggest crypto exchange) alleged that FTX was backed by a lot of virtual assets. Namely the FTX Token (CRYPTO: FTT), the utility token of the FTX exchange.

Zhao then said he was selling US$530 million of FTT, causing a wider run on the token and roiling crypto markets.

With FTX.com in deep water, Zhao had indicated that Binance would take over the exchange earlier in the week. However, he abandoned those plans yesterday.

The result?

Atop the Bitcoin price hitting two-year lows, FTT is down 61% overnight and down 91% since this time last week, according to data from CoinMarketCap.

What the experts are saying about the crypto rout and tumbling Bitcoin price

Commenting on the sharp sell-off, Ilan​ Solot, co‑head of digital assets at Marex Solutions said (courtesy of Bloomberg), “The market is now in full fear mode. Everyone’s looking to see if there’s more dominoes and what else needs to be liquidated.”

Modular Asset Management’s crypto hedge-fund manager Dan Liebau added, “Since I entered the crypto industry in 2016, very few periods tested its market infrastructure and participants like the last 24 hours did.”

And Noelle Acheson, author of the Crypto is Macro Now newsletter, said the big decline in the Bitcoin price, which normally tends to be more resilient in selloffs than most altcoins, could mean that institutional investors are exiting their positions.

According to the Acheson:

It’s a sign that this is a blow to confidence in the industry as a whole, from the investor’s point of view. From the industry’s point of view, it’s also a pretty steep blow, much more so than what we saw with Three Arrows Capital and with the Terra implosion. This is sitting harder.

Atop the FTX meltdown blow, cryptos could face additional headwinds if today’s inflation data out of the United States (overnight Aussie time) comes in higher than hoped for.

Should inflation prove to still be running hot, it will likely mean more aggressive rate hikes from the US Fed in the months ahead.

And if we’ve learned anything in 2022, it’s that the Bitcoin price doesn’t respond well to fast-rising interest rates.

The post Why did the Bitcoin price just hit 2-year lows? appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin and Ethereum were down big on Tuesday morning
• This one trend could send Bitcoin even higher
• Ethereum and Bitcoin price crash spells the end for these Aussie crypto ETFs
• Up 18% in a month, could it still be worth buying Ethereum at its current price?
• The Bitcoin price leapt 10% in October. Here’s why

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 positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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.

What happened

Most cryptocurrencies and crypto stocks continued to plunge today as the industry deals with the fallout from the events in recent days that ultimately led the large crypto exchange FTX to agree to sell its non-U.S. operations to Binance.

Over the past 24 hours, shares of the world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), traded more than 24% lower as of noon today. Shares of the meme tokens Shiba Inu (CRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE) traded more than 16% and 23% down, respectively.

So what

In recent days, there have been rumors questioning the solvency of FTX after a scathing report from the news website CoinDesk said that the crypto exchange’s sister trading firm, Alameda Research, had a large number of its total assets in the cryptocurrency FTX Token (CRYPTO: FTT).

FTT is the in-house cryptocurrency created by FTX. The concern was what would happen to both Alameda and therefore FTX, because of how tied the two companies were, if the price of FTT fell. Furthermore, there were concerns about whether FTT was being used as collateral in any way. Not that it matters as much now, but the price of FTT is down more than 78% over the last 24 hours.

On the news of Alameda, Binance’s CEO Changpeng Zhao announced that he would liquidate $2 billion of his FTT holdings, which started the concerns about FTT’s price holding up and the impact on FTX and Alameda.

While FTX CEO Sam Bankman-Fried tried to calm these fears, taking to Twitter to say that FTX’s balance sheet was sound, customers began to withdraw their funds from FTX; the crypto exchange said it saw $6 billion of withdrawals in 72 hours. This eventually led Bankman-Fried to turn to Zhao and sell FTX’s non-U.S. operations to shore up the liquidity crunch the company was facing.

But the deal is pending due diligence, and there are already media reports, including one from CoinDesk citing anonymous sources, suggesting Binance might not end up going through with the deal. This whole series of events has shaken the faith in the entire crypto industry, similar to other big crypto meltdowns like that of algorithmic stablecoins.

“It shows that no one is too big to fail,” Pascal Gauthier, CEO of crypto wallet firm Ledger, said on CNBC. “FTX seemed untouchable.”

This also could hurt the resolve of the general public and reduce investing activity if people are skeptical about the large crypto exchanges and believe that they lack stability.

Now what

I don’t know if the events over the last few days have affected my view of specific cryptocurrencies, but more so reflect the erratic nature of the industry as a whole and how it is still very much the Wild West.

FTX played an important role in the industry, so to see it go down so quickly — and to realize some of the issues it likely had — are going to raise a lot of questions.

Ultimately, my view hasn’t changed on these three cryptocurrencies. I still like Ethereum at these levels and think the token has great long-term potential because of all of its real-world uses. The recent upgrades to the network should also greatly help Ethereum scale as well.

I am still not a fan of Dogecoin or Shiba Inu due to their lack of real-world utility and the lack of technical capabilities on each of their perspective networks.

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

The post Why Ethereum crashed today appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin and Ethereum were down big on Tuesday morning
• Why cryptocurrencies went into free fall overnight
• Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk’s Twitter takeover
• Ethereum and Bitcoin price crash spells the end for these Aussie crypto ETFs
• The Dogecoin price is up 125% in a week. What’s going on?

Bram Berkowitz has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. 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 Origin Energy Ltd (ASX: ORG) share price is rocketing higher on Thursday morning.

In early trade, the energy company’s shares were up 40% to $8.15.

The Origin share price has since pulled back a touch but remains up 33% to $7.73 at the time of writing.

Why is the Origin share price?

Investors have been scrambling to buy Origin’s shares this morning after the company announced the receipt of a takeover approach.

Origin has received an indicative, conditional, and non-binding proposal from Brookfield Asset Management and MidOcean Energy to acquire the company at $9.00 cash per share.

Based on the Origin share price at the close of play on Wednesday, this represents a massive 54.9% premium. It also values the company at $18.4 billion on an enterprise value basis.

The offer will be reduced accordingly if any dividends are declared and paid in the future. There’s also potential for a 3 cents per share increase if the deal closes by the middle of May.

Will the offer be accepted?

The three parties have been in discussions for a while and finally appear to have settled on a price.

Origin revealed that it has previously rejected offers of $7.95 cash per share in August and $8.70 to $8.90 per share in September.

However, on this occasion, the Origin board revealed that it would be prepared to accept the offer and recommend it to shareholders if the proposal becomes binding. As a result, it has given Brookfield Asset Management and MidOcean Energy due diligence access.

Can a deal be done?

It is worth remembering that the proposed takeover is subject to a number of conditions.

Firstly, it would only be recommended to shareholders in the absence of a superior proposal. The parties would also need to enter into a binding scheme implementation agreement on terms acceptable to Origin and an independent expert would need to conclude that it is fair and reasonable and in the best interests of shareholders.

And let’s not forget approvals from the likes of the Foreign Investment Board Review (FIRB).

Analysts at Credit Suisse appear to believe this could be the difficult part of the takeover. And with the Origin share price trading at a sizeable discount to the offer price, it appears as though the market agrees and has priced in this uncertainty.

The broker commented: “Foreign Investment Review Board hurdles loom large for proposed acquisitions of this nature, and the Government could use its approvals leverage to extract concessions on domestic gas prices.”

Time will tell what happens. But it certainly will be an interesting few months for the Origin share price.

The post Why is the Origin share price rocketing 40%? appeared first on The Motley Fool Australia.

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More reading

• Origin share price on watch amid $18.4b takeover offer
• Why are Origin shares burning 4% brighter today?
• Here’s why the Origin share price is storming higher today
• 5 big ASX announcements making news this week
• Origin share price higher on earnings guidance update

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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No doubt, the approach to retirement can be both exhilarating and daunting, with the prospect of abundant free time perhaps contrasted against potential financial pressure. Fortunately, S&P/ASX 200 Index (ASX: XJO) dividend shares can help provide passive income during retirement.

A passive income is just that – passive. Those who create one can sit back and enjoy periodic payments, rarely lifting a finger to actively manage it.

ASX 200 dividend-paying companies generally pay out a portion of their profits to those invested in their shares every half year. That could be a huge benefit to retirees.

Additionally, dividend shares can act as an inflation hedge, as they can provide returns faster than inflation can eat away at cash in a savings account.

That’s not to say that all ASX 200 dividend shares will suit any one investor. Particularly, if said investor is considering retirement.

Let’s take a look at what one might want to consider when building a passive income for retirement using ASX 200 dividend shares.

How I would buy ASX 200 dividend shares for retirement

There are a few measures one looking to retire might want to consider before hunting out ASX 200 dividend shares.

The first is the intended length of their prospective investment.

Assumably, a retiree would be aiming to hold their investment for years or decades, with the goal of receiving dividends over the life of their holding.

Thus, if I were about to retire, I would consider focusing my attention on ASX 200 blue-chip shares. They generally offer more stability due to their proven track record and strong financial position.

I would also make a point to diversify my portfolio, adding shares from various industries and companies. That way, my portfolio would be better protected against single-sector or -company downturns.

Fortunately, there are plenty of stocks that fit that bill. Some ASX 200 dividend shares are even currently brokers’ recommendations.

3 ASX 200 dividend shares rated buys right now

Coles Group Ltd (ASX: COL)

Readers will likely know exactly what business Coles is in. The company operates one of Australia’s largest supermarket chains.

Investors have enjoyed consistent dividends since it was spun out of Wesfarmers Ltd (ASX: WES) in late 2018. And Morgans thinks it could grow both its share price and its payouts in coming years, as my colleague James reports.

The broker tips the Coles share price to rise 18% to $19.50. While its dividends are forecast to lift to 64 cents this financial year and to 66 cents the year after.

Westpac Banking Corp (ASX: WBC)

Once again, Aussies would be hard-pressed not to recognise blue-chip bank share Westpac.

Following the banking giant’s latest results, Citi expects the ASX 200 share to lift 26% to $30. While Goldman Sachs believes its dividends will increase to $1.48 in financial year 2023.

Stockland Corporation Ltd (ASX: SGP)

Finally, shares in ASX 200 housing developer and commercial property group Stockland could be in for a good run, according to Goldman Sachs.

The broker expects the stock will gain 23% to trade at $4.40, saying potential residential headwinds are already priced in.

It also thinks Stockland’s dividends will increase to 28 cents per share this fiscal year and next.

The post Worried about your income in retirement? Take a look at these 3 ASX 200 dividend shares appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares: Buy, hold, or fold?
• 5 things to watch on the ASX 200 on Thursday
• Why has the Sayona Mining share price dumped 33% in 2 months?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and Wesfarmers Limited. 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 Scott Phillips.

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The Perpetual Limited (ASX: PPT) share price is pushing higher on Thursday.

In morning trade, the fund manager’s shares are up 2.5% to $29.84.

Why is the Perpetual share price rising?

Investors have been buying Perpetual shares today after the company revealed that it has received an improved takeover approach.

According to the release, Perpetual received a further unsolicited conditional, non-binding indicative proposal to acquire all its shares on issue from the consortium comprising BPEA Private Equity Fund VIII and Regal Partners.

Under the revised indicative proposal, the consortium is offering $33.00 cash per share, a 10% increase from the original indicative proposal of $30.00 cash per share.

However, Perpetual’s board has considered a number of factors, including value, high conditionality, transaction and execution risks. After taking all this into account, it has determined once again that the consortium’s revised indicative proposal is not in the best interests of its shareholders and has therefore rejected the offer.

In fact, it believes the offer “continues to materially undervalue the company.” So, it appears that a significantly improved offer will need to be tabled to get a deal over the line.

For now, Perpetual’s board advises shareholders to take no action. It will keep shareholders informed in accordance with its continuous disclosure obligations.

Pendal deal still on

In other news, Pendal Group Ltd (ASX: PDL) has responded to speculation that the above approaches could impact Perpetual’s proposed takeover.

Pendal isn’t planning to let that happen and is pushing ahead with a scheme meeting this week despite Perpetual requesting a delay. It commented:

Pendal wishes to update its shareholders and the market that despite requests by Perpetual for a delay, it intends to proceed to the first court hearing for the Scheme this week and to seek orders convening the scheme meeting and for despatch of the Scheme Booklet to shareholders, with a scheme meeting to occur in mid-December 2022.

Pendal notes that while the Scheme Implementation Deed permits Perpetual to engage with another proposal, it does not permit Perpetual to terminate or otherwise abandon the Scheme in order to pursue a proposal. For clarity, the Deed does not preclude Perpetual responding to a proposal, but any resulting transaction can only be implemented in circumstances where the Scheme is accommodated. Any speculation to the contrary is inaccurate and contrary to a certain and well-functioning market for corporate control.

The post Perpetual share price leaps on boosted takeover bid appeared first on The Motley Fool Australia.

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• Here are the 10 most shorted ASX shares
• How did Pendal shares fare today amid takeover talk and an earnings update?
• Why A2 Milk, Bravura, Magellan, and Pendal shares are dropping
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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 Xero Limited (ASX: XRO) share price is falling on Thursday following the release of the company’s half year results.

At the time of writing, the cloud accounting platform provider’s shares are down 7% to $67.60.

Xero share price lower on earnings miss and CEO exit

• Operating revenue up 30% (27% in constant currency) to NZ$658.5 million
• Annualised monthly recurring revenue (AMRR) jumped 31% (23% in CC) to NZ$1.49 billion
• EBITDA up 11% to NZ$108.6 million
• Total subscribers increased 16% to 3.5 million
• CEO Steve Vamos leaving after almost 5 years in the job

What happened during the half?

For the six months ended 30 September, Xero reported a 30% increase in operating revenue to NZ$658.5 million and a 31% jump in AMRR to NZ$1.49 billion. This was driven by a 16% increase in subscribers to 3,496,000 and a 13% lift in average revenue per user (ARPU) to NZ$35.30.

Here’s a summary of its performance across different markets:

• Australian revenue up 31% (25% in CC) to NZ$294 million after increasing subscribers by 126,000 to 1.47 million.
• New Zealand revenue up 16% to NZ$84 million following a 24,000 increase in subscribers to 536,000.
• UK revenue up 32% (34% in CC) to NZ$175 million. Xero added 44,000 net subscribers, bringing its total to 894,000. New additions were impacted by a slower than expected uptake of MTD for VAT and partner sales approach changes.
• North America revenue up 44% (30% in CC) to NZ$44 million. Xero added 15,000 net subscribers in the market, bringing its total to 354,000. Subscriber growth was impacted by seasonality factors.
• Rest of the World revenue up 35% (25% in CC) to NZ$62 million. Subscribers grew 16,000 to 242,000 in the market.

Softer earnings

One disappointment was that Xero’s top line growth didn’t flow all the way down to the bottom line.

The company reported an 11% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to NZ$108.6 million. This was due largely to the impact of a NZ$25.9 million non-cash impairment driven by changed operational and market conditions for the Waddle business, which was partially offset by non-cash revaluation gains of NZ$10.8 million.

Excluding these adjustments, EBITDA would have been NZ$123.7 million, up 28% against the comparative period. This reflects a slight increase in operating expenses as a percentage of operating revenue from 83.4% to 83.9%.

How does this compare to expectations?

This result was somewhat mixed in comparison to what analysts were expecting.

For example, Goldman Sachs was expecting “Revenue/GP/EBITDA +28/+30/+42% vs. PcP to NZ$648/571/143mn.”

While Xero’s revenue was higher than Goldman’s estimate, its EBITDA has fallen well short both before and after adjustments. It was also the same for consensus estimates, which stood at NZ$656 million revenue and NZ$143 million EBITDA.

That may explain some of the weakness in the Xero share price today.

CEO exit

Also potentially weighing on the Xero share price is news that its CEO, Steve Vamos, is leaving after almost five years in the top job.

Vamos is retiring from the role and plans to return to his previous portfolio in business coaching and leadership development as an advisor, director, and investor.

The good news is that the company has acted fast and appointed a replacement, Sukhinder Singh Cassidy.

The release explains that Singh Cassidy is an experienced Silicon Valley executive, with more than 25 years’ global leadership experience. This includes as President, Asia Pacific & Latin America at Google; President at StubHub; founder of theBoardlist; founder of Joyus, where she was CEO; and co-founder of Yodlee.

Singh Cassidy will join the company at the end of month and formally takeover the role on 1 February 2023.

Outlook

Looking ahead, it is business as usual for Xero. Its outlook statement is little changed from the end of FY 2022. It stated:

Xero will continue to focus on growing its global small business platform and maintain a preference for reinvesting cash generated, subject to investment criteria and market conditions, to drive long-term shareholder value. Total operating expenses (including acquisition integration costs) as a percentage of operating revenue for FY23 are expected to be towards the lower end of a range of 80-85%.

The post Xero share price sinks 7% on half-year earnings miss and CEO exit appeared first on The Motley Fool Australia.

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More reading

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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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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.

What happened

Elon Musk, as expected, has sold a sliver of his Tesla (NASDAQ: TSLA) stake to help fund his acquisition of Twitter. Investors are now left to wonder whether Musk is done selling, which is creating volatility in the stock. Shares of Tesla opened Wednesday up as much as 2.4% before beginning a steady decline, trading down more than 6% for the day as of 2 p.m. ET as investors try to figure out what comes next.

So what

Shares of Tesla are down more than 30% in the last three months, and at least part of that decline is likely due to concerns about how Musk will fund and manage his Twitter adventure. Investors got at least part of the answer on Tuesday night, when Musk disclosed in a regulatory filing the sale of 19.5 million Tesla shares via 38 separate transactions over the past few days.

The executive raised about $3.95 billion from the sales, a significant part of the total cash outlay Musk needs for his $44 billion cash-and-debt purchase of Twitter. Musk has previously sold about $15 billion worth of Tesla shares in order to fund the acquisition.

A large shareholder selling into the open market tends to put pressure on the share price because supply and demand can become temporarily unaligned. If Musk’s sale is all the funding he needs to complete the Twitter deal and that overhang can be removed, it could be a positive for the Tesla share price from here. But Musk has said previously he hoped to avoid further sales, and investors are likely to be cautious, at least for now.

Tesla shares could also be under pressure due to the electric vehicle manufacturer issuing a recall of about 40,000 vehicles over concerns they could lose power steering. The problem can be fixed via an over-the-air software update, according to reports.

Now what

For Tesla investors, there is little to suggest the volatility will subside anytime soon. Despite whatever reassurances Musk provides, it is hard to say for sure that there will be no further stock sales. And Twitter adds another distraction to Musk, who already runs SpaceX and The Boring Co. in addition to serving as CEO of Tesla, at a time when the automaker is dealing with macroeconomic pressures.

For long-term-focused investors, the bull and bear case for Tesla is largely unchanged from where it was a year ago. This remains a highly valued stock, but one with much potential for growth from here. But no matter where you think Tesla will be in five years, there is a good chance that this current spate of volatility will continue in the weeks and months to come.  

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

The post Why Tesla stock is tumbling today appeared first on The Motley Fool Australia.

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More reading

• Why did Elon Musk just sell $6 billion worth of Tesla shares?
• Why Tesla hit a new 52-week low today
• Why Tesla shares dropped below $200 on Monday
• Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk’s Twitter takeover
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Lou Whiteman 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 Tesla. 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.   

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

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