In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is rebounding from recent weakness. At the time of writing, the benchmark index is up 1.1% to 7,340.2 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

AMP Ltd (ASX: AMP)

The AMP share price is up 15% to $1.18. Investors have been buying this financial services company’s shares after it announced an agreement to sell its international infrastructure equity business to DigitalBridge. The two parties have agreed an upfront consideration of A$462 million and a total value of up to A$699 million. This follows recent agreements to sell its domestic infrastructure equity and real estate business and its infrastructure debt platform. AMP intends to return the majority of the proceeds to shareholders.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is up 6.5% to $21.43. This morning the mining giant released its third quarter update which revealed iron ore shipments up 10% year on year to 46.5 million tonnes (mt). This means Fortescue’s shipments reached a record of 139.5mt for the first three quarters of the financial year. This led to management upgrading its shipments guidance for FY 2022.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up 2% to $2.65. Earlier today the lithium miner released its quarterly update and revealed production of 81,431 dry metric tonnes (dmt) of spodumene concentrate. While this was down 2% quarter on quarter, management has retained its FY 2022 production guidance of 340,000–380,000 dmt. It also reported another increase in lithium prices for the quarter.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire share price is up 11% to $5.77. Investors have been buying this copper producer’s shares following the release of its quarterly update. That update revealed strong production, sales, and earnings thanks largely to the transformational acquisition of MATSA.

The post Why AMP, Fortescue, Pilbara Minerals, and Sandfire shares are racing higher appeared first on The Motley Fool Australia.

More reading

• Why is the Rio Tinto share price rebounding strongly on Thursday?
• Sandfire share price shoots 12% higher on ‘transformational’ quarter
• AMP share price surges 11% as $699m Collimate deal confirmed
• ASX 200 midday update: Coles, Fortescue, and Pilbara Minerals release quarterly updates
• Pilbara Minerals share price climbs as lithium prices surge

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Mineral Resources Limited (ASX: MIN) share price is storming higher today.

This comes after the mining services company announced an update to its unsecured senior notes offer.

At the time of writing, the Mineral Resources share price is up 4.79% to $58.15.

Mineral Resources bolsters its notes offer

According to its release, Mineral Resources advised the pricing and upsizing of its US$1.25 billion unsecured notes offer.

As previously stated, the notes will be offered across two tranches to persons believed to be qualified institutional buyers.

It appears investors are viewing the release as a positive one, sending the Mineral Resources share price higher.

The first offer comprises US$625 million senior unsecured notes priced at 8% per annum, maturing in 2027. The interest is payable on 1 May and 1 November each year, commencing in November 2022.

The second tranche of US$625 million senior unsecured notes will be priced at 8.5% per annum, expiring in 2030. These will also have the same payable interest dates as above, commencing in November 2022.

Originally, the proposed notes offering was placed at US$1 billion.

Mineral Resources stated that it intends to use the cash proceeds for general corporate purposes, including capital expenditures.

The settlement of the offering of the notes is expected to occur on 2 May 2022, subject to customary closing conditions.

Mineral Resources share price snapshot

Despite being down 5% for the week, Mineral Resources shares have gained almost 20% since this time last month.

When looking further back, its shares are up 26% over the past 12 months.

On valuation grounds, Mineral Resources presides a market capitalisation of roughly $11 billion, with approximately 189.2 million shares outstanding.

The post Here’s why the Mineral Resources share price is leaping 5% appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 mining shares defying today’s sell-off to surge higher
• 5 things to watch on the ASX 200 on Wednesday
• Why Chalice Mining, EML Payments, Mineral Resources, and South32 shares are tumbling
• Why is the Mineral Resources share price sinking 9% today?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s been a very pleasing day on the whole for the S&P/ASX 200 Index (ASX: XJO). After some heavy losses earlier in the week, the ASX 200 is rebounding strongly today, up 0.95% at the time of writing to around 7,330 points. But it’s been an even better day for the Rio Tinto Limited (ASX: RIO) share price. Rio shares are currently up a healthy 2.34% at $111.51 each. That comes after some steep selling earlier this week.

So why are Rio shares surging higher today?

Well, we can’t be completely certain. The company hasn’t released any news itself today. However, looking at the market, we can take a guess. The materials and metals and mining indexes on the ASX 200 are the top two performing sectors so far today. So Rio is certainly not alone in its gains. Its peers like BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are also surging, both up even more than Rio. Fortescue’s shares have risen an eye-popping 5.82%.

Rio share price rises amid higher iron ore price, falling dollar

These moves come as the iron ore price sees a rebound. According to Trading Economics, iron ore rallied overnight to US$137 a tonne. The Aussie dollar has also fallen in recent days. It’s now at just over 71 US cents, down from over 72 earlier n the week. A falling dollar makes exports from Australia cheaper to buy for foreign buyers, which is good news for miners like Rio.

So a rising iron ore price, and a falling Aussie dollar is the likely reason why iron ore miners like Rio, BHP and Fortescue are rallying today. This is no doubt coming as a relief for Rio investors, who had to watch the company lose around 4% of its value over Tuesday and Wednesday’s trading.

At the current Rio Tinto share price, this ASX 200 mining giant has a market capitalisation of $40.44 billion, with a trailing dividend yield of 9.75%.

The post Why is the Rio Tinto share price rebounding strongly on Thursday? appeared first on The Motley Fool Australia.

More reading

• Despite the global uncertainty, here’s why Macquarie remains bullish on ASX shares
• Why is the Woolworths share price missing out on the ASX party today?
• ASX 200 midday update: Coles, Fortescue, and Pilbara Minerals release quarterly updates
• Down over 10% in 10 days: Is the BHP share price a bargain buy now?
• Fortescue share price charges higher on Q3 update and shipments guidance upgrade

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Markets are lifting in afternoon trade on Thursday with the benchmark S&P/ASX 200 index (ASX: XJO) resting 105 basis point up at 7,337.

The big end of town is joined by Australian small caps today as well with the S&P/ASX Small Ordinaries index (XSO) also up by 74 basis points.

Meanwhile, theS&P/ASX 300 Metals and Mining index (XMM) that’s leading today with a circa. 3% gain, just ahead of the S&P/ASX 200 Materials index (XMJ) and ASX 200 resources index (XJR).

The distribution of these returns’ feeds into why one broker is bullish on ASX shares rolling through 2022 and beyond.

Why is Macquarie bullish on ASX shares?

After reviewing the current state of affairs, investment bank Macquarie Group Ltd (ASX: MQG) has urged its clients to tilt their portfolios towards domestic shares, particularly amid tensions in Europe.

It also recommends to concentrate in resources stocks over industrials in preference, considering the macroeconomic climate that’s driving up commodity prices.

Altough, with commodity indices racing to multi-year highs in 2022, it mightn’t come as a surprise. Brent Crude oil has surged 52% in the past 12 months whereas gold is still up 6% despite a sharp pullback recently.

Meanwhile, commodity-popstar lithium has still booked a 434% gain during the last year, and energy markets including coal and natural gas have secured triple-digit returns as well.

And let’s not overlook agricultural and food-based commodities. Except for lumber, the entire ‘ag-com’ basket is trading well into the green.

Most recently that’s been spurred on by Indonesia’s decision to scale back RBD palm oil exports.

“The world’s top producer [Indonesia] announced such a move in further effort to stabilise domestic prices, and authorities will assess local supply regularly,” as calculated by Trading Economics.

There’s talk such a move could add further pressure on agricultural commodities.

However, there’s two sides to every trade. And as commodity prices surge, there’s sure to be a long list of winners in 2022, Macquarie says.

Macquarie equity strategist Matthew Brooks said that “[e]asing lockdowns and more China stimulus should support commodities,” in a note, cited by The Australian.

Fed tightening remains a headwind for growth and valuations, and we still think this headwind will be greater for Industrials than Resources.

We still think the war in Eastern Europe is positive for Australia and continue to see inbound interest in ASX stocks from global investors.

The strategist’s outlook aligns with the current macro-thematic it seems, as ASX shares continue to shrug off pressures seen in European and US markets so far in 2022.

The post Despite the global uncertainty, here’s why Macquarie remains bullish on ASX shares appeared first on The Motley Fool Australia.

More reading

• Why is the Woolworths share price missing out on the ASX party today?
• ASX 200 midday update: Coles, Fortescue, and Pilbara Minerals release quarterly updates
• ‘No risk, no reward’: Exit ASX shares if you can’t stomach volatility, says experts
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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Telstra Corporation Ltd (ASX: TLS) shares are down 0.25% on Thursday afternoon after it was revealed to have paid $2.2 million in refunds and penalties.

The sell-off in the morning saw the stock price plunge as much as 0.5% as investors digested the news that the telco had overcharged customers.

The Telstra share price is now down more than 2% over the past week, and 5.8% for the year so far.

The Australian Communications and Media Authority (ACMA) announced before market open on Thursday that the company had paid a $506,160 penalty and more than $1.73 million in refunds after it was busted.

“At a time when Australians are being very careful with their budgets, these errors are particularly concerning as they could have caused considerable strain and distress,” said ACMA chair Nerida O’Loughlin.

“Telecommunications is an essential service for Australian households and businesses, and there are no excuses for overcharging customers.”

Charging customer after they departed

More than 8,000 of the roughly 11,600 impacted customers had been with Telstra’s budget brand Belong.

They were collectively charged more than $1.2 million for broadband after they had switched to another provider.

The problem was particularly concerning as Telstra had already been busted for the same offence in 2020.

“Telstra had already been formally directed by the ACMA to comply with billing rules so should have moved to address these issues and not inconvenienced its customers further.”

The Motley Fool has contacted Telstra for comment.

The errors, which occurred between July 2018 and October 2021, were self-reported by the company. The report triggered ACMA investigations, but the firm independently committed to refunding the overcharges.

According to ACMA, Telstra blamed the mistakes on data transfer issues between its customer relationship management system and its billing system, plus manual processing errors and obsolete instructions for staff.

The excuses didn’t really cut it for O’Loughlin.

“Telstra is the largest telecommunications company in Australia. I would expect its billing systems to be more sophisticated and compliant with industry-wide consumer protection rules.”

Telstra buys set-top box provider

During the day, Telstra announced that it had bought a 51% stake in streaming box provider Fetch.

The $50 million investment values Fetch at around $100 million, with current owner Astro Holdings retaining 49% of the business.

Until now, Telstra had provided streaming boxes branded Telstra TV that were made by US company Roku Inc (NASDAQ: ROKU).

Telstra TV currently had about 800,000 active subscribers, and Fetch has about 670,000 through other partners such as Optus and TPG Telecom Ltd (ASX: TPG).

The deal is subject to regulatory approval.

The post What’s dragging the Telstra share price lower today? appeared first on The Motley Fool Australia.

More reading

• Down 5% in 2022, is the Telstra share price a buy today?
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
• Can Telstra shares deliver an attractive dividend yield AND 13% upside in 2022?
• Analysts name 2 top ASX 200 dividend shares to buy
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. 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 Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is pushing higher on Thursday.

In afternoon trade, the banking giant’s shares are up 0.5% to $27.04.

This means the ANZ share price is now up 9% in the space of approximately seven weeks.

Where next for the ANZ share price?

Unfortunately for shareholders, one leading broker feels the ANZ share price may have peaked for the time being.

According to a note out of Morgans, its analysts have downgraded the bank’s shares to a hold rating and cut the price target on them to $26.00. This implies potential downside of 3.8% for the ANZ share price from current levels.

In addition, Morgans has downgraded Westpac Banking Corp (ASX: WBC) shares to a hold rating and slashed its price target down to $23.90. This compares to the current Westpac share price of $23.57.

Why did the broker make the move?

The note reveals that Morgans made the move amid concerns over near-term factors.

In respect to ANZ, the broker explained:

“Whilst ANZ’s Institutional business provides it with potentially strong leverage to rising rates, ANZ’s Australian home lending continues to disappoint in terms of growth. Moreover, it appears the limited growth ANZ is achieving is being driven by less complex, low-margin home loans. We consequently see risk of ANZ disappointing in the near term by way of loan growth and margin performance.”

As for Westpac, its analysts said:

“It has been disappointing to see that WBC’s Australian investor home loan book has continued to shrink post FY21 according to APRA statistics. We believe this contraction is being partially driven by WBC’s business bankers being focused on remediation issues; we had hoped these issues would be resolved by now. We suspect the remediation issues are also hampering WBC’s Australian business loan growth.”

“This is of particular concern in the near term as investor and business lending are two relatively high-margin areas of lending. We expect WBC’s share price to broadly track sideways until these issues are resolved.”

The post Top broker downgrades ANZ and Westpac shares appeared first on The Motley Fool Australia.

More reading

• 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 ANZ shares? Here’s what this top broker finds ‘particularly concerning’
• What predictions are being made for the ANZ share price in April?
• Own Westpac shares? Here’s why the bank has just copped a further $100m in fines

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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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It appears the Vulcan Energy Resources Ltd (ASX: VUL) share price is not getting the attention it might have wanted amid the release of its quarterly activities report.

As we enter the afternoon, the lithium project developer is being valued at $8.37 per share, down 2.3%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up 0.99% to 7,332.9 points. Furthermore, the blame cannot be placed on the sector — the materials segment of the market is currently the best performing.

So, let’s take a look at the latest quarter for Vulcan.

Vulcan energy share price wanes amid cash-burning

• Receipts from customers of 2.214 million euros, up from zero
• Commenced pre-fabrication of Direct Lithium Extraction (DLE) demonstration plant
• Exploration license area up 50% to more than 1,000 square kilometres
• Binding lithium hydroxide offtake agreement signed with LG Energy Solutions
• Began trading on the Frankfurt Stocks Exchange
• Finished the quarter with cash and cash equivalents totalling 115.61 million euros

What else happened during the quarter?

The quarter gone by was yet another eventful period for the upcoming lithium aspirant. Importantly, it involved several accomplishments that progress the company’s lithium production ambitions.

During the quarter, Vulcan entered into a memorandum of understanding with chemicals company Nobian. Essentially, the agreement will see the two explore the feasibility of bringing a central lithium plant to life in Frankfurt, Germany.

In another key update, Vulcan is moving closer to having its demo plant up and running. This will serve as a 1:200 scale representation of the company’s commercial plans for its Zero Carbon Lithium Project.

However, the exploratory operations come at a cost. Due to Vulcan not having its core operations cemented yet, the company burnt through 18.94 euros during the quarter. This might be weighing on the Vulcan Energy share price today.

What did management say?

Commenting on the progression of the company, Vulcan managing director Dr. Francis Wedin said:

We are swiftly capitalising on strategic opportunities to ensure timely project development. The recent appointment of Dr Günter Hilken and Mr Mark Skelton complement the existing key skills of our Board, at this critical juncture in our project development. I would like to thank the entire Vulcan team for their unwavering commitment to the Zero Carbon Lithium Project, as we remain focused on delivering the Definitive Feasibility Study (DFS) in the second half of the year, ahead of our targeted phase one commercial lithium production in 2024.

In addition, Dr Wedin highlighted the pleasing numbers from Vulcan’s operational DLE pilot plant. So far, the company has found lithium recovery rates averaging between 94% to 95%.

Vulcan share price snapshot

Despite some ASX-listed lithium plays continuing their upward trajectory this year, the Vulcan share price has had no such luck. In 2022, the project developer has experienced a 22.5% fall in its valuation.

At present, ASX-listed Vulcan boasts a market capitalisation of $1.12 billion.

The post Why is the Vulcan share price lagging the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• Down 13% in a month, is the Vulcan share price a buying opportunity?
• Analysts name 3 top ASX lithium stocks to buy now
• Why this broker says the Vulcan share price can more than double
• Vulcan share price up on new offtake agreement
• March was a stellar month for the Vulcan Energy (ASX:VUL) share price. Here’s why

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking to gain exposure to the banking sector, then National Australia Bank Ltd (ASX: NAB) shares could be worth considering.

That’s the view of one of Australia’s leading brokers, which has just reiterated its bullish view on the bank.

Why NAB shares?

According to a note out of Goldman Sachs, its analysts have retained their conviction buy rating and $34.03 price target on the bank’s shares.

Based on the current NAB share price of $32.04, this implies potential upside of 6.2% for investors over the next 12 months.

But it gets better. Goldman Sachs is forecasting a fully franked dividend yield of ~4.5% in FY 2022. If we add this into the equation, the total potential return stretches to almost 11%.

What did the broker say?

Goldman likes NAB due to its strong position in business banking, cost management initiatives progress, and its balance sheet momentum.

The broker explained:

“Our preference for NAB (Buy, on CL) is premised on:

i) NAB’s position as the largest business bank means we believe it will benefit more from the continued economic recovery (management at the FY21 result saw all segments in its Business & Private Bank exhibiting solid growth without sacrificing margin, and asset quality remains pristine as at 1Q22),

ii) good balance sheet momentum, with NAB highlighting at the 1Q22 update that market share was gained across core lending and deposit products,

iii) NAB’s cost-management initiatives, which seem further progressed relative to most of its peers, have freed up investment spend to be more directed towards customer experience (targeting 50% in FY22 from 39% in FY21) as opposed to infrastructure.”

As for the rest of the big four, Goldman has a buy rating on Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares, a neutral rating on Westpac Banking Corp (ASX: WBC) shares, and a sell rating on Commonwealth Bank of Australia (ASX: CBA) shares.

The post Why NAB shares are this leading broker’s top big four pick appeared first on The Motley Fool Australia.

More reading

• 2 inflation-busting ASX dividend shares that brokers are tipping as buys
• Is the Westpac share price expensive in April?
• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000
• Why is the NAB share price beating the other ASX 200 banks in April?
• If you’d invested $5,000 in NAB shares just after the COVID crash, here’s what you’d have now

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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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2022 has been a bit of a ‘back to the future’ year for the Meta Platforms Inc (NASDAQ: FB) stock price. Meta, the US company formerly known as Facebook, has seen its share price almost halved over 2022 so far. This morning (our time), the company closed at US$174.95 a share after hitting a new 52-week low of US$169 in last night’s trading. That is the lowest share price Meta has had in front of it since the COVID crash of 2020.

But the company’s after-hours pricing tells a markedly different tale. During after-market trading, Meta shares ended up closing substantially higher at US$207.09 a share. That’s a good 18.37% above its closing price.

So what could have caused such a dramatic re-evaluation of Meta stock from the market?

Well, the company’s earnings report, of course. Meta reported its results for the three months to 31 March 2022 after normal US market trading closed this morning.

Meta stock price jumps on earnings report

In these results, Meta reported an increase in daily active users to 1.96 billion, an increase of 31 million over the quarter and 4% year-over-year. Monthly active users also rose, by 3% to 2.94 billion. In terms of revenue, the company announced revenues of US$27.9 billion, a year-over-year rise of 6.6%. 

But Meta also revealed a rise in total costs and expenses of 31% to US$19.38 billion. This was driven in part by an increase in staff headcount to 77,805, up 29% year-over-year.

Diluted earnings per share (EPS) fell over the quarter. Meta reported EPS of US$2.72 per share, down 18% from US$3.30.

Meta chief financial officer Sheryl Sandberg added the following:

We expect second quarter 2022 total revenue to be in the range of $28-30 billion. This outlook reflects a continuation of the trends impacting revenue growth in the first quarter, including softness in the back half of the first quarter that coincided with the war in Ukraine…

We expect 2022 total expenses to be in the range of $87-92 billion, lowered from our prior outlook of $90-95 billion. We expect 2022 expense growth to be driven primarily by the Family of Apps segment, followed by Reality Labs.

Why did the markets have this reaction?

So it’s clear that investors found a lot to be excited about in this earnings report, judging by the enthusiastic after-hours share price reaction. Here’s some of what eToro analyst Josh Gilbert had to say on Meta’s earnings and the market’s reaction:

It was a mixed quarter for Meta, as the social media giant missed revenue expectations, but saw a return in daily user growth after declining in the previous quarter. It was a better than feared result for Meta’s investors. 

Meta’s daily active users jumped to 1.96 billion, up 31 million from the last quarter and beating expectations of 1.94 billion. This metric has helped ease concerns, at least for now, that Facebook was losing steam and that the platform had ‘peaked’. 

The company’s advertising revenue experienced the slowest growth year-on-year for over a decade at just 6 per cent. This was, in part, thanks to Apple’s iOS changes that have restricted Meta’s ability to offer targeted ads. This is going to be a lingering issue for Meta, as it could potentially cost the company upwards of USD$10 billion in 2022…

At the current Meta stock price, this US tech giant has a market capitalisation of US$474.91 billion. 

The post Why Facebook’s Meta stock is soaring 18% in after-hours trading appeared first on The Motley Fool Australia.

More reading

• Have ASX tech shares finally reached the bottom?
• Where will Meta Platforms be in 5 years?
• Prediction: 5 billion people will be in the Metaverse by 2030

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Splitit Ltd (ASX: SPT) share price is launching upwards on Thursday following the release of its latest quarterly results.

The buy now, pay later (BNPL) company that allows consumers to split payments using their existing credit line also held its annual general meeting (AGM) today.

At the time of writing, the Splitit share price is 24 cents, 14.29% higher than its previous close.

Let’s take a closer look at what’s going on with the BNPL provider’s stock on Thursday.

Splitit share price surging as revenue jumps 6%

• US$2.6 million in revenue – up 6% on that of the prior comparable period
• Merchant sales volume of US$101 million – a 23% year-on-year increase
• A 43% increase in 12-month active merchants, reaching 1,300
• A 20% increase in 12-month active shoppers, coming to 327,000

Splitit recorded a strong performance for the 3 months ended 31 March, which followed an outstanding December quarter.

The final quarter of 2021 housed major shopping events like Black Friday, Cyber Monday, and the Christmas trading period.

Thus, when compared to the December quarter, Splitit’s revenue for the March quarter fell 24% and its merchant sales volume dropped 22%.

Meanwhile, the number of active shoppers using the service fell 1% quarter-on-quarter due to the last remaining debit shoppers being removed from the 12-month lookback period.

Year-on-year, its merchant sales volumes increased more than its revenue due to more contributions from shorter dated loans. Its net transaction margins also increased 1.6% year-on-year.

Splitit recorded a cash decrease of $4.2 million last quarter – a 73% improvement on the prior quarter’s. When one-off costs are removed, the company’s net overall cash decrease for the quarter was US$2.2 million – an 86% improvement.

As of the end of the quarter, Splitit had US$25 million of cash, US$78 million of funded merchant receivables, and US$67 million of debt. That left it with a net cash position of US$36 million.

The company’s shareholders also approved a US$150 million Goldman Sachs credit facility at today’s AGM.

What else happened last quarter?

Last quarter, Splitit’s customers used its service for larger purchases such as furniture, sporting equipment, and luxury items.

The company also underwent a cost rationalisation exercise that will see its costs falling from this quarter.

Finally, Splitit appointed its new CEO, Nandan Sheth, in January.

What did management say?

Sheth commented on the news helping to drive the Splitit share price higher today, saying:

[M]y initial weeks as CEO … has reinforced my conviction about why I joined Splitit, and I have also had the opportunity to formulate a new vision for the company in what is a rapidly evolving sector.

Splitit will drive the next generation of BNPL for merchants, issuers, and networks by focusing on becoming the infrastructure layer of BNPL … [it’s] uniquely positioned as it bridges the gap between BNPL and credit cards …

The ability to access customers’ available credit also means we operate an entirely different business model to providers of new debt that are under growing regulatory scrutiny, providing us with a path to scalable, profitable growth.

What’s next?

Splitit’s future is bright, according to the company’s new CEO.

“BNPL has rapidly grown to account for 2% of global eCommerce in 2020 and by 2030 is estimated to reach US$3.3 billion, indicating its permanent role in the everyday lives of customers around the world,” said Sheth.

“In an inflationary environment, affordability tools such as instalment solutions are becoming increasingly important, even for wealthier customers.”

In the near term, Splitit will look to grow its existing partnerships to target verticals with high merchant sales volume opportunities and good product-market fits.

It will also aim to offer white-label ‘instalments as a service’ solutions, focusing on the US market.

Finally, the company is planning to enable card issuers to participate and monetise BNPL at the point of sale and within the shopper’s purchase journey.

Splitit is also in talks with Google USA to expand its current partnership in Japan to the tech giant’s US-based customers.

Splitit share price snapshot

Today’s gains haven’t been enough to boost the Splitit share price into the green.

The BNPL company’s stock is currently 14% lower than it was at the start of 2022. It has also fallen 67% since this time last year.

The post Splitit share price leaps another 14% as CEO ‘formulates a new vision’ appeared first on The Motley Fool Australia.

More reading

• The Splitit share price just popped 30%. What’s with this ASX BNPL share?
• March was a lousy month for ASX BNPL shares. Here’s why

Suzanne Frey, an executive at Alphabet, 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 Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). 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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