As the ASX’s largest Listed Investment Company (LIC), the Australian Foundation Investment Co Ltd (ASX: AFI) share price is a popular choice for many passive investors. A LIC is a share market investment that functions more similarly to a managed fund than your traditional ASX share. It is a company. But one that invests in its own portfolio of other ASX shares for the benefit of its shareholders.

Thus, many investors hold AFIC shares seeking an easy, broad-based, diversified and dividend-paying investment. One that will hopefully deliver a sprinkle of market outperformance over a long time frame. Its current top shares mostly consist of blue-chips like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Macquarie Group Ltd (ASX: MQG).

But as we approach the halfway mark of 2022, it is inflation that is at the top of many investors’ concerns right now. Earlier this week, we got the shocking news that Australia’s annual inflation rate is now running at 5.1%, a two-decade high.

So are AFIC shares an effective inflation hedge?

Well, inflation of 5.1% means that an investment has to have grown by 5.1% just to keep an investor’s capital level in real terms.

That means that AFIC’s dividend alone doesn’t cut the mustard. The company presently offers a dividend yield of 2.9% on current pricing. This dividend, including the full franking credits, grosses up to 4.14%. AFIC hasn’t increased its dividend for a few years now. Its interim payment that investors saw in February was 10 cents a share, the same interim dividend it paid in 2016.

However, over the past year, AFIC shares have increased by 10.56% in value. Adding that to the grossed up dividend yield of 4.14% and we get a total trailing return of 14.7%. Subtracting inflation of 5.1% and we get a real return of 9.6% for the past 12 months.

So over the past year, AFIC has indeed been an inflation-busting hedge. But past performance is no guarantee of future returns, so take that with a grain of salt. 

The post Could AFIC shares be an ASX inflation hedge? appeared first on The Motley Fool Australia.

More reading

• Do AFIC shares trade at a discount right now?
• How is AFIC different from an ASX 200 ETF?
• Why has the AFIC share price leapt 5% in 4 weeks?
• If you’d bought $10,000 of AFIC (ASX:AFI) shares 10 years ago, here’s how much you’d have now

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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. The benchmark index is currently up 0.75% to 7,412.7 points.

Here’s what is happening on the ASX 200 today:

ResMed share price falls on quarterly update

The ResMed Inc (ASX: RMD) share price is sinking on Friday after the sleep treatment company’s quarterly update fell short of expectations. ResMed reported a 12% increase in revenue to US$864.5 million and a 2% lift in earnings per share to US$1.32. Goldman Sachs notes that the company’s revenue and earnings per share missed by 5% and 9%, respectively, versus consensus estimates.

PointsBet shares jump

The PointsBet Holdings Ltd (ASX: PBH) share price is racing higher today thanks to a rebound in the tech sector and a positive reaction to the sports betting company’s quarterly update. In respect to the latter, PointsBet reported a 54% increase in turnover to $1,398 million. This reflects a 37% increase in Australian turnover to $579.4 million and a 70% jump in US turnover to $818.6 million.

COVID weighs on Ramsay profits

The Ramsay Health Care Limited (ASX: RHC) share price is trading lower today after the hospital giant revealed that its profits have been hit by COVID restrictions. Ramsay reported third quarter revenue growth of 5.7% to $3,449.2 million but a 59% reduction in net profit to $42.7 million. The latter reflects COVID-related absenteeism, surgical restrictions, and higher operating costs.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the PointsBet share price with a gain of 11%. This follows the release of the sports betting company’s quarterly update and a rebound in the tech sector. The worst performer has been the ResMed share price with a 5% decline after the sleep treatment company’s quarterly update missed expectations.

The post ASX 200 midday update: ResMed disappoints, PointsBet rockets higher appeared first on The Motley Fool Australia.

More reading

• Here’s why the ResMed share price is sinking 6% today
• Ramsay Health share price bleeds as profits plunge
• PointsBet share price shoots 13% higher on strong Q3 growth
• Is rising inflation reducing how much Aussies are investing in ASX shares?
• ResMed share price on watch after Q3 revenue and 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 positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended Pointsbet Holdings Ltd, Ramsay Health Care Limited, and ResMed Inc. 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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Sure there are a lot of ASX dividend shares on the S&P/ASX 200 Index (ASX: XJO) to choose from. There are the big banks like Commonwealth Bank of Australia (ASX: CBA). Then there are the mining giants like BHP Group Ltd (ASX: BHP). Other dividend investors look to blue-chips like Telstra Corporation Ltd (ASX: TLS), or Wesfarmers Ltd (ASX: WES) for income. But dividend-paying ASX healthcare shares?

Traditionally, the healthcare space is not one where many investors traditionally search for income. The market’s largest healthcare share is CSL Limited (ASX: CSL). But even though CSL shares have fallen more than 8% this year so far, the company still has a dividend yield under 1%.

But there is a healthcare share on the ASX that currently offers a fully franked dividend yield of over 4% right now. That would be Medibank Private Ltd (ASX: MPL).

Medibank Private is the ASX’s largest healthcare insurer. Many of us would know its flagship Medibank brand, as well as its AHM subsidiary.

Well, right now, Medibank Private shares offer a dividend yield of 4.06%. Since this yield comes fully franked too, it grosses up to a meaty 5.8% with those franking credits. 

How do Medibank shares offer a 4% yield today?

Where does this yield come from? Well, Medibank’s last two dividend payments. The company paid out its interim dividend for FY2022 last month This was a payment of 6.2 cents per share, a healthy rise on the previous interim dividend of 5.8 cents per share. Before that, Medibank doled out a final dividend of 6.9 cents per share in September last year. Again, that was an increase on its 2020 final payment of 6.3 cents per share.

Medibank actually had a bit of a streak going before COVID. From its first ever dividend in 2015, Medibank gave its investors an annual dividend pay raise every year until 2019. 2019 saw the company payout 15.6 cents per share in dividends, but this was reduced to 12 cents in 2020 largely thanks to the effects of the pandemic. 2021 saw the company begin to increase its shareholder payouts once again, which it has continued to do in 2022 so far.

So that’s how we get to a 4.06% yield for Medibank shares today. Not too common for an ASX healthcare share at all.

At the current Medibank Private share price, this ASX 200 healthcare share has a market capitalisation of $8.81 billion. 

The post This ASX 200 healthcare share has a fully franked dividend yield over 4% right now appeared first on The Motley Fool Australia.

More reading

• Why is the Medibank share price trailing NIB over the past year?
• Why did the Medibank share price go backwards in March?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price seems to be pulling itself together after a disastrous week, surging nearly 10% on Friday morning.

And its timing couldn’t be better. The buy now, pay later (BNPL) giant’s stock tumbled 2.7% on Tuesday and 5.1% on Wednesday before ending yesterday’s session flat.

At the time of writing, the Zip share price is trading at $1.09, 7.39% higher than its previous close.

For context, the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are both in the green on Friday. They’ve gained 0.8% and 0.75% respectively.

Let’s take a look at what might be pushing the BNPL stock to a strong week’s end.

Zip share price soars towards the weekend

The Zip share price is the ASX 200 financial sector’s top performer on Friday.

But another sector is likely helping to boosting it higher. The BNPL stock generally tracks more in line with the S&P/ASX 200 Information Technology Index (ASX: XIJ) ­– and that’s good news today.

The tech sector is currently the ASX 200’s best performing sector, recording a gain of 2.09%.

Today’s top performing ASX 200 tech shares include Life360 Inc (ASX: 360), EML Payments Ltd (ASX: EML), and Tyro Payments Ltd (ASX: TYR).

Its strong performance on Friday is likely a reaction to yesterday’s session on the tech-heavy NASDAQ exchange.

While most of Australia slept last night, the Nasdaq Composite Index (NASDAQ: .IXIC) gained 3%. And while its nice to wake up to a sea of green, we probably shouldn’t get used to it.

Nasdaq futures have slipped on Thursday night (Friday, Aussie time), after Amazon.com Inc (NASDAQ: AMZN) and Apple Inc (NASDAQ: AAPL) posted results.

Sadly, today’s gains haven’t been enough to boost the Zip share price into the green.

The BNPL stock has tumbled nearly 75% since the start of 2022. It’s also around 87% lower than it was this time last year.

The post TGIF: Why is the Zip share price rocketing 10% today? appeared first on The Motley Fool Australia.

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• Zip share price slides another 5% to new multi-year low of $1
• These are the 10 most shorted ASX shares
• Is the Zip share price set to sink below the $1 mark for the first time since 2018?
• Have ASX tech shares finally reached the bottom?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Amazon, Apple, EML Payments, Life360, Inc., Tyro Payments, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool Australia has recommended Amazon, Apple, and Tyro Payments. 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 Commonwealth Bank of Australia (ASX: CBA) share price is seen as the most expensive compared to the other major banks. But can that continue?

Experts are not just talking about the market capitalisation when they say one bank is more expensive than the other. But, just for the record, the CBA market cap is almost $176 billion according to the ASX.

One of the main ways that different businesses can be compared is with the price to earnings (P/E) ratio.

So, let’s look at the projected earnings multiples for FY22.

CBA share price valuation

Using Commsec data, which is provided by independent third-party data providers, CBA is expected to generate $5.23 of earnings per share (EPS).

If CBA does generate EPS of $5.23, that would mean the CBA share price is valued at around 20 times FY22’s estimated earnings.

How does that compare to the other big four banks?

The National Australia Bank Ltd. (ASX: NAB) share price is valued at under 16 times FY22’s estimated earnings.

Next, the Westpac Banking Corp (ASX: WBC) share price is valued at 15 times FY22’s estimated earnings.

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is valued at 13 times FY22’s estimated earnings.

So, there is a material gap in the P/E ratio between CBA and the other banks based on this year’s forecast earnings. ANZ has the lowest projected earnings multiple.

Can the CBA keep up this valuation gap?

Michelle Lopez is head of Australian equities at Aberdeen Standard Investments.

The Australian Financial Review quoted her thoughts on CBA:

Commonwealth Bank, while looking expensive on an earnings multiple, is trading broadly in line with its five-year average premium to peers. We believe CBA has the leading retail franchise, leading tech infrastructure and momentum in its SME book, which enables them to continue generating a return on equity well in excess of its peers. Hence, the premium can be maintained, but admittedly, it can overshoot.

Which ASX bank is the best one to pick?

Every analyst has a different opinion on the banks. For Ms Lopez, it isn’t CBA that is the most attractive bank. She commented on her favourite bank idea:

We are seeing NAB execute on its turnaround strategy and the valuation does not yet reflect the upside potential in our view given the strong earnings momentum across both its retail and SME franchises.

Recent CBA performance

The most recent operational update investors heard was the FY22 half-year result for the six months to 31 December 2021. Investors like to look at profit generation, which can have an impact on the CBA share price.

In that result, CBA said that it generated a 23% growth of its cash net profit after tax (NPAT) to $4.75 billion. It said that NPAT was supported by “strong business outcomes, reduced remediation costs and lower loan loss provisions due to an improved economic outlook but impacted by lower margins”.

The post Can the CBA share price maintain its premium to the other ASX banks? appeared first on The Motley Fool Australia.

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• Here’s how CBA plans to support greener homes with cheaper mortgages
• Is the Westpac share price expensive in April?
• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000
• Own CBA shares? Meet the big bank’s new chair
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 ResMed Inc (ASX: RMD) share price is ending the week deep in the red.

In late morning trade, the sleep treatment focused medical device company’s shares are down 5% to $28.87.

This is an improvement from early on when the ResMed share price was down as much as 6.5% to $28.36.

Why is the ResMed share price sinking?

Investors have been selling down the ResMed share price after the company’s third quarter update fell short of the market’s expectations.

According to the release, the company delivered a 12% increase in revenue to US$864.5 million, a 5% lift in operating income to US$234.3 million, and a 2% rise in its earnings per share up 2% to US$1.32.

Management advised that its top line growth was driven by increased demand for its sleep and respiratory care devices. Whereas its softer profit growth reflects margin pressure from higher freight, manufacturing, and employee costs.

How does this compare to expectations?

As mentioned above, the ResMed share price is falling today after its quarterly result fell short of expectations.

Goldman Sachs was quick to respond to the result, highlighting that the company’s revenue and earnings per share missed by 5% and 9%, respectively.

It commented: “3Q22 revenue came in -5% below consensus (Visible Alpha Consensus Data), driven primarily by a -15% miss in ex-US devices (largely a reflection of persisting supply chain challenges, which were well flagged in advance but clearly still underestimated).”

“Gross margins declined (-150bps non-GAAP; -140bps GAAP) as widely anticipated freight and supply pressures continue to impact the business. These cost pressures were exacerbated by an increase in SG&A expenses above and beyond revenue growth, in contrast to prior quarters (SG&A increased +17% CC, above Group revenue of +14% CC).”

At present, Goldman Sachs has a buy rating and $35.80 price target on the ResMed share price. However, this could change in the coming days once it has fully absorbed this update.

The post Here’s why the ResMed share price is sinking 6% today appeared first on The Motley Fool Australia.

More reading

• ResMed share price on watch after Q3 revenue and earnings miss
• 5 things to watch on the ASX 200 on Friday
• Analysts name 2 ASX 200 healthcare shares to buy
• 3 fantastic ASX growth shares with major upside potential
• Top brokers name 3 ASX shares to buy next week

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 recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. 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 Origin Energy Ltd (ASX: ORG) share price is in the green today after the company released its latest quarterly report.

At the time of writing, the Origin share price is $6.86, 2.24% higher than its previous close.

Origin share price lifts as revenue doubles

Highlights for the quarter ending 31 March 2022 include:

• APLNG revenue increased 15% to $2,577.5 million  – 104% year-on-year increase
• Its sales for the period fell 5% quarter-on-quarter
• Its average commodity price rose 21% to $16.10 per gigajoule
• Production dropped 4% to 170.6 petajoules
• Electricity market sales volume increased 7%

Origin’s Australia Pacific LNG (APLNG)’s revenue surged alongside gas and oil prices last quarter, more than double that of the same quarter of last financial year.

That’s despite the company’s recording lower production levels due to wet weather and a shorter quarter. The company’s fall in sales reflected its lower production volumes.

APLNG delivered seven spot cargoes last quarter, with North Asian LNG market prices averaged around US$31 per million British thermal units (mmbtu).

APLNG’s effective oil price came to $108 per barrel in the March quarter – up 10% quarter-on-quarter and 89% higher than the same period of last year. APLNG’s realised gas price was A$16.10 per gigajoule last quarter.  

Turning to energy markets, Origin’s electricity sales rose 7% quarter-on-quarter. New customer wins saw business volumes surge 16%, while retail volumes dropped 4% on lower usage.

Its gas sales volumes also rose 2%, and its gas sales to generation rose 46%. Though, natural gas sales fell 11% quarter-on-quarter.

The average national energy market spot electricity price was $90.88 per megawatt house last quarter. That represents a 58% quarter-on-quarter increase.

The average east coast spot gas price for the quarter was $9.97 per gigajoule – down $0.71 on that of the December quarter.

What else happened last quarter?

Last quarter was a big one for Origin Energy and its share price.

In February, the company officially offloaded a 10% interest in Australia Pacific LNG for net proceeds of $2 billion. The company still boasts a 27.5% holding in — and control over — the venture.

It also completed its acquisition of WINconnect in the March quarter.

Origin acquired two solar farm projects last quarter: NSW’s Yarrabee Solar Farm project and Victoria’s Carisbrook Solar Farm.

The company also announced its plan to close the power station earlier than previously expected in February. Eraring is now set to shut its doors in August 2025.

Output from the company’s Eraring Power Station is down 16% for the financial year so far compared to the same point of last financial year. The drop is mainly due to coal delivery constraints.

The company also released news of a $250 million on-market share buyback. It began in April.

The Origin share price gained nearly 19% last quarter.

What did management say?

Origin CEO Frank Calabria commented on the company’s latest quarterly results, saying:

Australia Pacific LNG was able to capitalise on strong commodity prices, shipping seven JKM-linked spot cargoes during the quarter, with a further four sold into the tight Asian LNG market for delivery in the coming months.

In Energy Markets, customer wins in the business segment drove an increase in volumes, more than compensating for a small drop in retail demand as the wet summer experienced by much of the east coast resulted in mostly milder temperatures and lower consumer demand.

Wholesale prices across the [national energy market] have risen significantly compared with the prior period driven by higher coal prices, lower solar output associated with the La Nina summer and baseload outages across the NEM.

Origin Energy share price snapshot

2022 has been a good year so far for the Origin share price.

Shares in the company have gained 28% since the start of the year, and are 67% higher than this time last year.

The post Origin share price gains as surging commodity prices boost revenue to $2.5b appeared first on The Motley Fool Australia.

More reading

• How might the election outcome impact the outlook for ASX energy shares?
• 3 ASX 200 stocks smashing 52-week highs today
• Are Origin Energy shares really trading on a 3% dividend yield?
• Why is the Origin Energy share price having such a dire day?
• The Origin share price is now overvalued, consensus says yes. What do you think?

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 Ramsay Health Care Limited (ASX: RHC) share price is back in focus today after releasing its third-quarter trading update.

In early morning trade, shares in the private hospital operator are down 0.6% to $81.04.

Ramsay Health share price fails to impress

• Total revenue up 5.7% from prior corresponding period to $3,449.2 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) down 8.8% to $422.7 million
• Net profit after tax (NPAT) attributable to owners down 59% to $42.7 million
• Excluding non-recurring items, NPAT fell 6.8% to $269.7 million
• Completed Elysium Healthcare acquisition on 31 January 2022
• Australia operations tallied up an estimated $89.2 million in costs associated with COVID-19 in Q3

What else happened during the quarter?

The world might be returning to some form of normality, but COVID-19 still hit Ramsay Health hard in the most recent quarter. Ultimately, this is likely weighing on the Ramsay Health share price today.

According to the trading update, quantifiable impacts due to disruptions from the pandemic in Australia eclipsed $196 million for the nine months ending 31 March 2022. The healthcare giant noted that this has been a consequence of COVID-related absenteeism, surgical restrictions, and higher operating costs.

Furthermore, a similar situation played out across the company’s UK operations. Although, admissions were said to be improving during the quarter. Meanwhile, Ramsay Santé experienced an increase in profits primarily from the Nordics region.

The difficult environment didn’t stop Ramsay Health from continuing to invest in its expansion. During the nine months to the end of March invested around $145 million in further developments. This included more than 240 beds and nine theatres being added.

What did management say?

Cognisant of the continued COVID-19 impacts, Ramsay Health managing director and CEO Craig McNally said:

While the 3QFY22 has seen significant levels of disruption in the business due to high rates of COVID in the community, we are starting to see activity levels rise as surgical restrictions lift and our regions move into an endemic COVID setting.

Additionally, with respect to addressing the challenges being faced, McNally said:

We remain focused on our short- and long-term plans to address staff shortages and covid related fatigue among our frontline teams and to ensure that we remain an attractive place to work and an employer of choice. I would like to thank our people for continuing to live our purpose of ‘People Caring for People’ which has underpinned the resilience and success of the Ramsay business over many years.”

What’s next?

Currently, the Ramsay Health share price is a hot topic as the ASX-listed company evaluates a $20 billion takeover bid.

The last time we heard about the offer lobbed its way by the KKR consortium, the pair were conducting due diligence. The timing around the next steps is unclear as it is not yet publicly disclosed. However, it will be interesting to see if the consortium is rattled by the latest quarterly figures.

Ramsay Health share price snapshot

The Ramsay Health share price had been struggling prior to its recent takeover offer. Specifically, the company’s share price was down roughly 10% on a year-to-date (YTD) basis.

However, shares rocketed higher following the offer, putting an investment in the hospital operator back in the green for the year. Now, the YTD performance stands at a 13.5% gain — outpacing the S&P/ASX 200 Index (ASX: XJO) by nearly 16%.

The post Ramsay Health share price bleeds as profits plunge appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Despite today’s sell-off, these 3 ASX 300 shares are topping all-time highs
• Who will have the final say on whether Ramsay Health Care leaves the ASX?
• Here are the top 10 ASX shares today

Motley Fool contributor Mitchell Lawler 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 Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Sezzle Inc (ASX: SZL) share price is charging higher today, up 7.3% in early trade.

Sezzle shares closed yesterday at 82 cents and are currently trading for 88 cents.

The ASX buy now, pay later (BNPL) company has released its first-quarter results (Q1 FY22) for the three months ending 31 March. Let’s take a look at the highlights.

What happened in Q1 to boost the Sezzle share price?

The Sezzle share price is soaring after the company reported a 6.2% increase in total income during the quarter compared to Q1 FY21, with income reaching US$27.6 million.

That was largely attributable to a 20.1% year-on-year boost in underlying merchant sales (UMS), which hit US$450.5 million in the first quarter. 80% of the total income was generated by merchant fees.

Other key growth figures included a 43.1% increase in the number of active merchants (48,700) using Sezzle’s payment platform. Meanwhile, active consumer numbers hit 3.5 million, up 31.6% from the previous corresponding period.

The Sezzle share price may also be getting a lift after the company reported that more than 4.1 million people had downloaded its payment app as at 31 March.

With fewer payments being made through the Automated Clearing House, Sezzle said transaction expenses as a percentage of UMS increased “slightly”.

What’s next?

In the current quarter (Q2 FY22), Sezzle expects to launch its partnership with Bread Financial Holdings Inc (NYSE: BFH). The company said that would allow it to expand its long-term instalment loan offering to its small and medium-sized business (SMB) base, which could offer further tailwinds for the Sezzle share price.

It’s also continuing to streamline operations by reducing its workforce, scaling back its European operations, pulling out of India, and spinning off its Brazilian operations, in which it will retain a minority stake.

Sezzle forecasts annual cost savings from these measures of at least US$17 million.

What did management say?

Commenting on the quarterly results, Sezzle CEO Charlie Youakim said:

Our 1Q22 results continued to demonstrate our product acceptance with merchants and our alignment with consumer needs. We have also taken decisive actions to move toward profitability and free cash flow as expeditiously as possible.

With over US$98.0 million in liquidity, between cash on hand and availability on our line of credit, Sezzle is well funded for current operations and future growth opportunities.

Sezzle share price snapshot

Today’s big lift aside, it’s been a rough ride for Sezzle shareholders of late, with the ASX BNPL share down 68% year-to-date.

Over the past 12 months, the Sezzle share price has lost 84%. That compares to a gain of 4% over the same period posted by the All Ordinaries Index (ASX: XAO).

The post Sezzle share price rockets 7% on boost in active users appeared first on The Motley Fool Australia.

More reading

• This ASX BNPL share is now back below its IPO price for the first time since the COVID crash
• Here’s a look at the laggards from ASX tech shares last quarter
• March was a lousy month for ASX BNPL shares. Here’s why
• Could the Zip share price turn over a new leaf in April?

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 Nitro Software Ltd (ASX: NTO) share price is on course to end the week with a big gain.

In morning trade, the document productivity software company’s shares are up 23% to $1.40.

This follows a rebound in the tech sector and the release of Nitro’s quarterly update.

Nitro share price rockets on stellar Q1 growth

• Annual Recurring Revenue (ARR) excluding Connective up 40% year on year (60% including Connective)
• Software as a service (SaaS) subscription revenue now represents 72% of total revenue, up from 61% a year earlier
• Cash receipts from customers up 42% to a record of US$17 million.
• Cash of US$42.1 million at 31 March 2022 and no debt
• FY 2022 EBITDA guidance upgraded by US$3 million to loss of US$15 million to US$18 million

What happened during the quarter?

For the three months ended 31 March, Nitro reported record cash receipts of US$17 million, up 42% on the prior corresponding period. This led to its ARR growing 40% year on year excluding the Connective business and 61% including the recently acquired business.

This was driven by key customer wins, expansions, and renewals in the quarter. This includes with customers such as Lloyds Banking Group, Subsea 7, NRG Energy, BP, BNP Paribas and Pioneer Natural Resources.

Pleasingly, while no ARR dollar figure was provided, management notes that its first quarter performance puts it on track to achieve its FY 2022 ARR guidance of $64 million to $68 million. This represents a 39% to 47% increase on FY 2021’s ARR.

Another positive which appears to be lifting the Nitro share price today is news that management expects lower operating expenditures than previously forecast. This reflects enhanced business efficiencies.

As a result, it has improved its EBITDA loss guidance for FY 2022 by US$3 million to the range of US$15 million to US$18 million.

But these losses won’t be for too much longer. Management expects the company to move toward a cash flow breakeven profile in second half of 2023.

Management commentary

Nitro’s Co-Founder and Chief Executive Officer, Sam Chandler, was pleased with the quarter and the integration of the Conenctive business. He commented:

“Nitro delivered record cash receipts from customers over the opening quarter of 2022 as the Company continues to execute on its growth strategy.

In parallel, we continued to focus on integrating Connective to ensure we deliver on the full benefits of this acquisition and the game-changing technology and team it brings. The integration is progressing well and on schedule, with Connective’s market-leading high-trust, enterprise-grade eSigning, eID and workflow capabilities now available to Nitro customers. Our go-to-market team is focused on cross-selling the expanded product set to a combined customer base of over 13,000 businesses around the world.

“We have entered 2022 well positioned to continue scaling our document productivity and workflow platform, and to cement our status as a leading global player in enterprise eSigning at a time when high-trust solutions are in growing demand.”

The post Nitro share price storms 23% higher on record quarter appeared first on The Motley Fool Australia.

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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 recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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