One expert is bullish on the Audinate Group Ltd (ASX: AD8) share price, flagging a bright future for the stock.

The digital audio networking technology provider’s shares have fallen 15.3% year to date to trade at $7.30 at the time of writing.

That’s despite the release of the company’s seemingly strong first-half earnings yesterday. At least the Audinate share price isn’t alone in its tumble.

The S&P/ASX All Technology Index (ASX: XTX) has also slumped 19.9% since the start of 2022, likely dragging the All Ordinaries Index (ASX: XAO) audio tech stock down with it. For context, the All Ords has gained 4.9% in that time.

Fortunately, according to Shaw and Partners portfolio manager and Market Matters author and portfolio manager James Gerrish, the drop has left Audinate with a significant upside.

Here’s why this expert thinks its Audinate shares are a buy

The professional investor reportedly told Livewire he is content with the company’s results for the first half and believes it has room to grow.

Gerrish noted some of his managed portfolios include Audinate shares already, telling the publication, “we own it. If we didn’t own it, we’d be buying it”.

“[The company has] a clear competitive advantage in what they do … It’s got the ability now to leverage its position into other areas like video. It’s growing its top line strongly. And it’s handled a pretty challenging period over the past 12 to 18 months.” 

However, Gerrish believes the stock’s current dip is justified. He said tech sell-off aside, the business is facing supply chain issues that could restrict its future pace of growth.

The expert said the stock “probably deserves” to have fallen from around $11 – near its 52-week high ­– to around $7.60 – where it opened on Monday.

“If I look at the short term, [the stock’s tumble is] probably the right reaction because that whole area of the market has been sold down,” Gerrish told the publication. He continued:

But it’s the clear global leader in audio networking. It’s got 13 times the market adoption of its nearest competitor …

They’re doing all the things that you’d want them to be doing. They’re increasing headcount to go and capture growth.

They’ve got cash on their balance sheet of $60 million. So, they’re well capitalised, that’s more than 10% of their market cap …

However, the company’s projected headcount growth – expected to reach 185 over financial year 2022, representing a 35% increase – might have shocked the market yesterday.

It will likely lead to extra costs. Particularly, Gerrish says, given the current skills shortage.

“[But] if you take a medium-term view, so out over the next two to three years, I think this is a clear buying opportunity,” Gerrish summarised.

The expert also noted the stock is in its “value range”, with Shaw and Partners slapping Audinate shares with a $12 price target. That’s 62% higher than where the stock is currently trading.

Finally, speaking on Audinate’s results, Gerrish was quoted as saying:

Loss this half is $2.1 million. It is up more than 70% and it was bigger than what we expected. We expected them to be making a slight profit of about a million dollars …

However, you’re not holding this company because it’s losing $2 million or $1 million, or it’s making a million bucks. You want them to be scaling for future growth. You want them to be taking advantage of the market opportunity they’ve got, which is having such a dominant position in that audio networking space. And then leveraging that into other areas. 

The post This ASX All Ordinaries share has a 60% upside after the tech sell-off: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AUDINATEGL FPO. The Motley Fool Australia owns and has recommended AUDINATEGL FPO. 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 Zip Co Ltd (ASX: Z1P) share price hit a fresh 52-week low yesterday and almost broke that feat again today.

The company’s shares reached an all-time high of $14.53 a little less than 12 months ago but bottomed out to a 52-week low of $2.68 in Monday’s session.

The buy-now pay-later (BNPL) company’s shares have struggled to gain composure since the start of last year.

During early morning trade today, Zip shares touched $2.685 before rebounding slightly higher. Currently, Zip shares are fetching for $2.72, up 0.74%.

What dragging Zip shares down?

Investors have continued to sell off Zip shares following negative sentiment across the tech industry.

Geopolitical tensions between Ukraine and Russia have spooked world markets, particularly on the Nasdaq. In the past month, the heavily tech-focused index has lost around 7.5% in value, and 14% since the beginning of the year.

This has had an adverse effect on the S&P/ASX All Technology Index (ASX: XTX), down 10% in a month, and 20% for 2022.

In addition, inflationary issues have not helped the cause, with the United States experiencing the largest rise in inflation in 40 years.

Australia has been experiencing its own inflation problems. The cost of living has risen 3.5% in the last quarter of 2021 alone. This was being blamed on high levels of building construction activity combined with shortages of materials and labour, as well as record automotive fuel prices.

The Reserve Bank of Australia signalled two rate hikes for 2022 in an effort to slow down the rising price of goods.

What this means is that consumers are less likely to spend on discretionary items when interest rates are picking up. The cost of debt on items such as credit cards, as well as personal loans, will require extra payments, affecting consumer spending habits.

Unfortunately for Zip, in the BNPL sector, this is the heart of its business model.

Investors will be watching closely when Zip releases its financial results later this month.

Is this a buying opportunity?

After reporting its FY22 second-quarter results last month, a number of brokers rated the company with varying price points.

Analysts at Macquarie slashed its price target for Zip shares by 40% to $3.40 apiece.

Following suit, the team at Citi also reduced its outlook by 38% to $3.65.

Both of these brokers believe there is still a significant value for the company’s shares at current prices. This represents a potential upside of about 25% to 35% from where Zip trades today.

The latest broker note, however, came from Jefferies which also lowered its view by 39% to $2.73 per Zip share. It appears investors are more in line with the analysts’ thoughts for the BNPL company.

Zip share price summary

Over the past 12 months, the Zip share price is down almost 80%. When looking at year to date down, its shares are down more than 37%.

Based on the current Zip share price, the company has a market capitalisation of around $1.6 billion.

The post The Zip (ASX:Z1P) share price hit another 52-week low this week. Is now the time to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. 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 Sims Ltd (ASX: SGM) share price has shot into the green today and is now 16.44% higher at $17.45.

Investors are bidding up Sims shares following the release of the metal and electronics recycling company’s FY22 half-year results.

Sims share price jumps alongside revenue, EBIT

The company outlined several investment highlights for the period, including:

• Sales revenue of $4,265.0 million, up 73.9% from prior corresponding period
• Statutory earnings before interest and tax (EBIT) of $341.4 million, up 334.9% million from the same time last year
• Underlying EBIT of $361.7 million, up 541.3% million from this time in FY21
• Cash flow distribution of $135 million, up 458% from prior corresponding period
• Operating cash flow of $290.8 million, up 94.8% from the prior corresponding period
• Return on “Productive Assets” of 37.5%, up from 6.2% in the year prior

What else happened this half for Sims?

A key takeout is the company announcing an underlying EBIT of $361.7 million. This is more than 540% higher compared to the same time last year and seems to have pleased investors, judging by the soaring Sims share price.

Much of the growth waterfall that trickled down Sims’ profit and loss this half stemmed from an 80% growth in sales revenue to $4.26 billion.

Sims notes the high-octane growth was due to “higher sales volumes and higher material prices, combined with disciplined margin management”.

In fact, the group’s trading margin increased by 45% through this “disciplined management”, specifically, of “the buy/sell spread as selling prices increased”.

As a result, the company recognised a statutory net profit after tax (NPAT) of more than $253 million. That’s a substantial gain of 378% on the previous year, whereas underlying NPAT gained 622%.

Impressively, this half also marked the lowest number of injuries recorded year-on-year since 2019.

Management commentary

Speaking on the announcement fuelling the Sims share price today, Group CEO and managing director Alistair Field said:

We delivered an excellent performance in HY22 with earnings above guidance, driven by growth in trading margin, against a backdrop of volatile freight markets and inflationary pressures. We significantly improved our operating cash flow from 2H FY21, increased cash returns to shareholders, and maintained the strength of our balance sheet. Intake volumes grew strongly and were close to pre-COVID levels, highlighting the continued strength of our metal businesses.

What’s next for Sims?

The release notes that intake volumes are solid into 2H FY22 both in the metal business and its joint venture, SA Recycling.

The momentum is strong as non-ferrous commodity prices race higher than HY22 averages and ferrous prices remain elevated.

Sims also explains that SA Recycling’s acquisition of PSC Metals will commence full contribution in 2H FY22.

Sims share price snapshot

In the last 12 months, the Sims share price has gained around 36% and is up 8% this year to date. In the past month, it has climbed 11% and is soaring more than 13% over the past five days of trading.

The post ‘Excellent performance’: Sims (ASX:SGM) share price rockets 16% on stellar earnings appeared first on The Motley Fool Australia.

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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 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 BHP Group Ltd (ASX: BHP) share price is pushing higher on Tuesday morning.

At one stage today, the mining giant’s shares were up 3% to $49.88.

The BHP share price has dropped back a touch since then but remains up 2% at $49.33.

Why is the BHP share price pushing higher?

Investors have been bidding the BHP share price higher this morning after it delivered a half year result ahead of expectations.

BHP reported a 27% increase in revenue to US$30,527 million and a 57% jump in underlying profit to US$9,715 million. This was driven by higher sales prices across its major commodities, near record production at WAIO, and favourable exchange rate movements.

This ultimately led to BHP generating free cash flow from continuing operations of US$8.5 billion, which allowed the Big Australian’s Board to declare a record interim dividend. BHP will be paying shareholders a fully franked US$1.50 per share dividend for the period, which represents a 78% payout ratio.

How does this compare?

The team at Goldman Sachs has had a quick look at BHP’s results and notes that it was better than both it and the market were expecting. This goes some way to explaining the rise in the BHP share price today.

Goldman commented: “Better than expected result with underlying EBITDA/NPAT (incl Petroleum) of US$21.4bn/US$10.7bn, +7%/+5% vs our US$20.0bn/US$10.1bn estimates (and vs. Visible Alpha consensus of US$19.9bn/US$9.6bn). Headline NPAT of US$9.4bn included a modest US$300mn increase in Samarco liability provision (balance was US$2.8bn mid-CY21). BHP reported an EBITDA margin of 64% and ROCE of 40% for the half.”

It was a similar story with the BHP dividend, which at US$1.50 per share, came in ahead of Goldman’s estimate of US$1.27 per share and the consensus estimate of US$1.31 per share.

The broker was also pleased with the mining giant’s balance sheet and operating cash flow.

It said: “Net debt of US$6.1bn (incl. leases) was well below our US$9.6bn forecast and consensus of US$9.0bn, despite working cap build. BHP has reset the net debt target to US$5-15bn (GSe) ex Petroleum (vs. current US$12-17bn target). Operating cash flow of US$13.3bn, above GSe at US$10.8bn, on the stronger result and lower than expected cash tax. Cash capex and exploration was US$3.7bn vs our US$4.1bn estimate. FCF totaled US$9.7bn compared to our US$6.6bn estimate.”

Overall, BHP appear to get a big tick for this half.

The post BHP (ASX:BHP) share price storms higher following ‘better than expected result’ 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 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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AMP Ltd (ASX: AMP) shares were in the spotlight on Thursday when the financial services company released its full year financial results for 2021 (FY21).

Despite forgoing a final dividend payout, the AMP share price gained 5% on the day. ASX investors appeared pleased by the company’s reported 53% year-on-year increase in underlying net profits after tax (NPAT) of $356 million.

Atop the financial results, AMP shareholders were also updated on the progress being made in separately listing AMP Capital Private Markets.

And the new name of the standalone business was revealed – Collimate Capital.

Collimate Capital to list mid-year

Why Collimate?

According to the company, “Collimate is a scientific term that means to make rays of light perfectly parallel. It is a metaphor for alignment, clarity, and precision, which speaks to our vision and expertise in long-term value creation for our clients.”

AMP’s CEO, Alexis George confirmed that the demerger should be completed in the first half of 2022. She said the freshly branded Collimate Capital’s leadership team is already in place:

Significant progress has been made on the demerger of Private Markets from AMP, and we’re on track for completion in the first half of this year. Operational separation is now complete, including the transfer of the multi-asset group investment team into Australian Wealth Management, and the appointment of Chairman and Deputy Chairman designates to establish an independent board.

Addressing the benefits of the transformation for AMP shares, AMP Capital CEO Shawn Johnson added:

The new brand matches our determination to work in parallel alignment with our clients, partners, and communities to develop and deliver long-term, sustainable assets and returns.

As a demerged entity, Collimate Capital will provide a greater level of independence, stability, and accountability to further enable the delivery of superior results for all of our investors and act on growth opportunities to raise equity and deploy new capital.

How have AMP shares been tracking?

AMP shares, down 0.3% in intraday trading today are up a slender 0.7% so far in 2022. That handily beats the 4.9% loss posted by the S&P/ASX 200 Index (ASX: XJO) year-to-date, though.

The post Here’s why AMP (ASX:AMP) shares are set for a transformation appeared first on The Motley Fool Australia.

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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 Qantas Airways Limited (ASX: QAN) share price is trading 1.3% lower this morning. Today’s slip follows a reveal from the airline’s soon-to-be newest competitor Bonza.

Although the latest Australian airline entrant will be targeting the budget market, investors might be wary of the dent it could put in Qantas’ own budget offering Jetstar.

Taking a different path, literally

Investors have gone cold on the Qantas share price in Tuesday morning trading. Coincidentally, this aligns with Australia’s latest addition to the airline industry revealing its routes and destinations.

According to reports, the ultra-low-cost competitor is planning to take to the skies across 25 different routes. These will service 16 locations across the eastern states of Australia.

Roughly 80% of Bonza’s proposed routes are currently not being served by an airline. This means, unlike its ASX-listed peers, Bonza Airlines will be operating mostly in completely new markets.

Bonza chief executive Tim Jordan highlighted the unique proposition, stating:

That’s delivering something very different to the market. Eighty percent of the routes are not flown by any other airline at this point. It’s new ground for Australia.

It seems the differentiation isn’t enough to ease the minds of Qantas shareholders as the share price slides this morning.

Destinations across Bonza’s planned network include:

• Melbourne
• Mildura
• Albury
• Coffs Harbour
• Toowoomba
• Mackay
• Townsville

Meanwhile, Aussies can expect to take flight at enticing price points. For example, a flight between the Sunshine Coast to Rockhampton would cost about $50 one way. Longer one-way flights, Melbourne to Sunshine Coast, are likely to set travellers back between $75 to $100.

What’s been playing on the Qantas share price?

A new addition to the domestic airline market has yet to push the Qantas share price into the negative so far in 2022.

Perhaps Qantas investors are optimistic about the fast-approaching international border reopening. The loss of international travel has remained a heavy burden for Qantas over the last two years.

In a December update, the airline operator shared its expectation for international capacity to be approximately 30% of pre-COVID levels in the third quarter.

The Qantas share price is up 14% in the last 12 months.

The post Qantas (ASX:QAN) share price slips amid Bonza plans to launch ‘something very different to the market’ appeared first on The Motley Fool Australia.

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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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The Seven West Media Ltd (ASX: SWM) share price is sinking after a strong start to today’s session. It’s currently down 5.41% at 70 cents, having shot up 5.4% to 78 cents at market open.

Seven West shares closed yesterday at 74 cents.

It comes after the ASX media conglomerate released its financial results for the half-year ending 25 December (H1 FY22). Below we take a look at the highlights.

Seven West share price falls despite strong results

• Group revenue of $819.5 million, up 27.2% on the prior corresponding period
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $215.3 million, up from $164.9 million in H1 FY21.
• Underlying net profit after taxes (NPAT) of $128.7 million, up from $87.1 million year-on-year
• Underlying earnings per share (EPS) of 8.4 cents, up from 5.7 cents in the prior corresponding half-year.

What else happened during the half-year?

The Seven West share price is slipping despite the company reporting it took the No. 1 spot in broadcast television. Additionally, 7plus was first in broadcaster video on demand (BVOD).

The TV advertising market was described as “robust”, with a 13% year-on-year increase in metropolitan TV advertising, a 7.2% increase in regional advertising, and BVOD advertising increasing by 58%.

Driven by strong digital growth in the metropolitan TV advertising market and the growth of 7plus, net debt during the half-year was cut by $212.4 million to $116.7 million as at 25 December.

Regarding the group’s Seven West Ventures, Seven West Media’s CEO James Warburton said:

Seven West Ventures has strong momentum, completing six investments in the period, including four new companies with large addressable markets. The investments are predominantly via media for equity which can be supercharged by SWM’s assets. The portfolio value increased 56% to $87 million in the period.

What did management say?

Commenting on the half-year results, Warburton said:

This result reflects the successful execution of our strategy over the past 30 months… We have completed the acquisition of the assets of Prime Media Group, which unlocks an unrivalled opportunity for the business to capture a greater share of the $3.8 billion total television market.

The balance sheet has been significantly strengthened over the past 18 months, with leverage now at 0.9x net debt/EBITDA on a pro-forma basis after the acquisition of Prime. The Board will assess capital management options during the second half to further enhance shareholder value.

We had an amazing start to the financial year with the Olympic Games Tokyo 2020, which was the biggest television and streaming event in Australian history.

What’s next?

The Seven West share price is struggling despite the company upgrading its full-year group EBITDA guidance to $315 million-$325 million (including $10 million second-half contribution from Prime).

Management noted that the strong performance of the television and BVOD advertising markets witnessed in the first half are continuing into the second half-year.

Seven West share price snapshot

The Seven West share price has gained 44% over the past 12 months. That compares to a gain of 5% posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, Seven West shares are up almost 12%.

The post Seven West (ASX:SWM) share price heads south despite soaring earnings appeared first on The Motley Fool Australia.

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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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Property management company and REIT Dexus Property Group (ASX: DXS) today announced its results for the half year ended 31 December 2021.

At the time of writing, shares in Dexus are rangebound from the open and are trading less than 1% in the red at $10.14 apiece.

Dexus share price steady as profits, rent collection grows

The company advised on several investment takeouts this half, including:

• Net profit after tax (NPAT) of $803.2 million, up 82% year on year (YoY)
• Adjusted Funds from Operations (AFFO) of 28.1 cents per security, down 2.4%
• A distribution of 28 cents per security, down 2.8% YoY, primarily driven by lower trading profits of $21.6 million (post tax) in HY22
• Rent collections remained strong at 97.9%
• Gearing remains conservative at 31.1%
• $1.6 billion of cash and undrawn debt facilities
• High occupancy of 95.1% for the Dexus office portfolio and 98.6% for the Dexus industrial portfolio
• Raised $1.3 billion of new equity across existing funds since 30 June 2021

What else happened this half for Dexus?

The key takeout was Dexus carrying $803.2 million through to NPAT for 1H FY22. This represents an increase of $362 million, or 82% on the same time last year.

Dexus notes the gain was underscored by “net revaluation gains of investment properties of $486.2 million, which were $341.5 million higher than the previous corresponding period”.

The REIT also saw a valuation uplift on 124 of its office, industrial and healthcare assets. This resulted in a valuation increase across the industrial portfolio of 9%. Meanwhile, the office portfolio increased 1.1% on prior book values “on the back of leasing success at some assets”.

As a result, valuation gains across the total property portfolio this half resulted in a 3.1% gain in net tangible asset (NTA) per security to $11.77.

Furthermore, Dexus’ total property portfolio weighted average capitalisation rate decreased 0.15% over the past six
months to 4.76%.

The amount of profit carried through to Dexus’ bottom line enabled its board to approve a distribution per security of 28 cents, although this was down roughly 3% YoY. The company notes this is mainly due to “the amount of trading profits in the first half of FY22 being lower than those in the first half of FY21, as well as higher maintenance capital expenditure and incentives”.

Even still, the distribution payout ratio remains in line with free cash flow in accordance with Dexus’s
distribution policy, the release notes.

Finally, Dexus integrated the funds of APN Property Group onto its platform, acquiring both Dexus Convenience Retail REIT (ASX: DXC) and Dexus Industria REIT (ASX: DXI) in the process.

Management commentary

Speaking on the announcement, Dexus Chief Executive Officer, Darren Steinberg said:

Despite impacts from the pandemic, it has been an active start to the year with growth in our funds management business, continued leasing activity, as well as new acquisitions and selective asset sales. This momentum demonstrates our continued focus on leveraging our platform capabilities to drive performance across our portfolio and in our third party funds.

Our strategy is to deliver superior risk-adjusted returns from high-quality real estate and seek opportunities that can deliver sustainable income streams while growing and diversifying our funds management business

What’s next for Dexus?

The release noted that Dexus maintains its guidance of “delivering distribution per security growth of not less than 2% for the 12 months ended 30 June 2022”.

It bases these forecasts on current COVID-19 expectations and “barring unforeseen circumstances”.

Also, two of its latest sales are expected to settle this year. The sale of 383 Kent Street, Sydney for net proceeds of $385 million is expected to occur in July 2022, whereas 140 and 150 George Street should settle in August with net proceeds of $155 million.

Dexus share price snapshot

In the last 12 months, the Dexus share price has climbed a little over 17%, although it has slipped 8% into the red so far this year.

The post Profit up 82%: Dexus (ASX:DXS) share price steady on active half year results appeared first on The Motley Fool Australia.

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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 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 ELMO Software Ltd (ASX: ELO) share price is pushing higher following the release of its half year results.

At the time of writing, the cloud-based HR and payroll software company’s shares are up over 3% to $4.02.

ELMO share price higher after delivering more strong growth

• Annualised recurring revenue (ARR) up 35% since the end of June to $98.3 million
• Revenue up 41% over the prior corresponding period to $43.1 million
• Cash receipts up 63% to $56.0 million
• Positive EBITDA of $0.3 million, up $0.9 million year on year
• Cash balance of $58.4 million at the end of December
• Reiterated recently upgraded FY 2022 ARR guidance of $107 million to $113 million

What happened during the first half?

For the six months ended 31 December, ELMO grew its ARR to $98.3 million. Management advised that this reflects strong trading conditions due to the increased adoption of cloud-software solutions by businesses to manage remote or hybrid workforces.

This led to ELMO’s midmarket business continuing to grow strongly. At the end up the period, its customers reached 3,281 and its segment ARR was up 31.4% over the prior corresponding period to $38 million. And while the midmarket gross margin softened to 84.2%, its churn levels improved to 9.3%. This translates into a net dollar retention of 103%.

ELMO’s small business solution, Breathe, grew rapidly and reported 10,232 customers and annualised ARR growth of 41%. Positively, management revealed that Breathe’s gross profit margin remains high at 89.4% and its ARR churn improved to 10%. This translates to a net dollar retention of 101%.

But perhaps the biggest positive is the operating leverage the company is achieving. This reflects its strong revenue growth and a reduction in key spend ratios across the business which has driven the positive EBITDA and reduced operating monthly cash burn by 36% year on year.

Management commentary

ELMO’s CEO, Danny Lessem, was pleased with the company’s solid half.

He said: “The ELMO Group has experienced strong growth in the first half of FY22. We are continuing to experience increased demand as more organisations adopt cloud-based technology to manage disparate workforces. The COVID-19 pandemic has accelerated the move to hybrid working which has in turn increased adoption by businesses of cloud-based systems to manage their people, allowing us to upgrade our guidance [on 1 February].”

“We launched two new modules to market in the half that respond to the changing nature of the workplace environment; COVIDSecure and Experiences. Our UK acquisitions are performing exceptionally well and provide a solid foundation to increase our market share in the region. We are on the cusp of surpassing the $100 million in ARR milestone and have solid momentum to continue this growth going into the second half of FY22.”

I was fortunate to have the opportunity to chat with Mr Lessem following the results release. They key takeaway from that chat is that demand for ELMO’s software is continuing to grow due to the hybrid working shift, which is only really getting started.

The CEO also highlighted that ELMO has high gross margins and a very large addressable market, which positions it to become a highly profitable company at scale.

Mr Lessem also notes that its cash balance of $58.4 million is expected to comfortably see ELMO through to breakeven in the not so distant future.

Outlook

Management has reiterated its recently upgraded FY 2022 guidance. It continues to forecast ARR of $107 million to $113 million (28% and 35% growth).

The company also expects positive EBITDA of $1.5 million to $6.5 million for the year.

The post ELMO Software (ASX:ELO) share price higher after reporting more stellar growth appeared first on The Motley Fool Australia.

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• Here’s why the Elmo (ASX:ELO) share price is surging 9% today
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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. owns and has recommended Elmo Software. The Motley Fool Australia owns and has recommended Elmo Software. 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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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

Last week, in a short series of thrilling stock market sessions, a tiny, all-but-unknown Australian maker of electrical equipment — Tritium DCFC Limited (NASDAQ: DCFC) — rocketed to stock market stardom. President Joe Biden appeared to make Tritium the centrepiece of his $7.5 billion plan to build a nationwide network of electric vehicle charging stations, you see. And before you knew it, Tritium stock had exploded 130% higher.

But easy come, easy go. Just two days after its run higher began, Tritium stock lost all its momentum and proceeded to plunge. On Monday, that slump continued and, as of 11:35 a.m. ET, Tritium shares are down another 10.2%.

So what

On Friday, you see, after close of trading for the weekend, Tritium notified investors some shareholders may be preparing to cash in on those gains.  

Filing an F-1 statement with the SEC [Securities and Exchange Commission], Tritium advised that insider shareholders may be preparing to sell 115.4 million shares of stock that they already hold, as well as 8.4 million warrants that confer the right to buy 21.8 million more shares.

Now what

In short, there’s now the potential for more than 137 million shares of Tritium to soon flood onto the market and swamp demand for the stock, driving down share prices even more than they’ve already fallen.

Investors who’ve already seen almost all of their gains from last week washed away aren’t interested in waiting around for the next flood. They’re selling Tritium shares en masse. And given that Tritium is unprofitable and burning cash, and yet the stock still sells for a multiple of 25 times sales, I cannot say I blame them.

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

The post Why Tritium shares keep falling appeared first on The Motley Fool Australia.

More reading

• Why Tritium shares dropped 15% today
• Zap! Tritium (NASDAQ:DCFC) share price rockets another 65%. What’s next?
• Tritium (NASDAQ:DCFC) share price rockets 39% on what Biden describes as ‘great news for the planet’
• Why did the Tritium (NASDAQ:DCFC) share price just leap 7%?
• Here’s how Tritium (NASDAQ:DCFC) has been performing since listing in the US

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 

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

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