Prior to the end of the year, analysts at Bell Potter were busy picking out the shares to buy in 2022.

Among the 30+ shares that the broker named were the two listed below. Here’s why it thinks they could have a great year:

Cooper Energy Ltd (ASX: COE)

In the energy sector, Bell Potter has named Cooper Energy as an ASX share to buy in 2022. The broker has put a buy rating and 38 cents price target on its shares. This compares favourably to the current Cooper Energy share price of 28 cents.

Bell Potter believes the company is well-placed to benefit from supply deficits in Australia’s south east coast market.

It commented: “Supply deficits in Australia’s south east coast market should support gas prices over the medium to long term and COE has a portfolio of conventional gas assets leveraged to this theme. Upgrades at the Orbost Gas Processing Plant in the March 2022 quarter will provide a step-change in production and earnings in FY23.”

“In the Otways, cutover to the larger, low cost Athena gas plant in late 2021 will provide uninterruptable gas processing and spare capacity for potential new Otway Basin discoveries. An upgrade to prospective Otway gas resource estimates is expected in the March 2022 quarter,” it concluded.

Money3 Corporation Limited (ASX: MNY)

In the Industrials sector, the broker has picked out this automotive-focused consumer finance provider. It has put a buy rating and $4.35 price target on its shares, which compares to the latest Money3 share price of $3.45.

Bell Potter believes the company is well-positioned to hit its guidance in FY 2022 and for further solid growth in the coming years.

It explained: “MNY is a beneficiary of favourable macro conditions for loan book growth, evidenced by strong originations in Nov’21 which are likely to accelerate into CY22 as VIC/NSW and NZ emerge from lockdowns. With ample funding headroom to support its strong outlook and greater book leverage, we believe MNY is well placed for its FY22 NPAT Guidance of $50m.”

“Having built a solid platform for growth, and improved ROE over the medium term, we believe MNY is well placed to deliver double digit forecast EPS growth over the next 3 years, and we see value in the business at its current PER of ~14x FY22e & ~11x FY23e, with a FY22e dividend yield of ~3.6% ff (~5.2% grossed up),” the broker added.

The post Top analysts say these ASX shares have upside potential of at least 25% appeared first on The Motley Fool Australia.

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• Forget Bitcoin! These were the 5 crypto assets you wish you’d held in 2021
• Why is the Pilbara Minerals (ASX:PLS) share price having such a stellar start to 2022?
• Down 70% in six months: Is the Sezzle (ASX:SZL) share price a massive bargain?
• Own NIB (ASX:NHF) shares? Here are the key dates for your investor diary in 2022
• 3 excellent ASX shares for growth investors in January

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 Pilbara Minerals Ltd (ASX: PLS) share price is off to a flying start in 2022.

The stock has gained 10.94% since the final close of 2021 despite no news having been released by the company.

It also came in as one of 2021’s top performing mining and resources shares of the S&P/ASX 200 Index (ASX: XJO).

It goes without saying, the Pilbara share price is on a roll. As of Monday’s close, its trading at $3.57, 2% higher than its previous close.

For context, the ASX 200 slipped 0.08% today.

Let’s take a look at the expert opinions that might have helped drive the lithium producer’s shares higher lately.

What might be boosting the Pilbara Minerals share price?

According to reporting by The Age, Bank of America (NYSE: BAC) upgraded its guidance for the Pilbara Minerals share price. Meanwhile, its analyst Jack Gabb is bullish on the company’s next lithium auction.

As The Motley Fool Australia has previously reported, many experts predict lithium will be a hot commodity in 2022, with demand exceeding supply by up to 5,000 megatons of lithium carbonate equivalent.

With Australia accounting for a huge chunk of the world’s lithium resources, the ASX is geared up to benefit from the shortfall.

This is highlighted through Pilbara Minerals’ spodumene concentrate digital auctions, conducted via its Battery Material Exchange.

An auction in September saw the lithium producer receiving a bid of US$2,240 per dry metric tonne. Another in October saw a buyer bidding US$2,350 per dry metric tonne.  

According to the analyst, as quoted in The Age, those prices are just the beginning. It’s reported Gabb expects Pilbara could see spot prices reach as high as US$3,900 per tonne at its next auction.

Sector fundamentals remain strong with spot spodumene prices set to increase significantly this quarter and contract prices still playing catch-up… Hence, we expect spot pricing to remain elevated.

Such expectations have reportedly led the Bank of America to increase its expectations for the company, lifting its price target for Pilbara Minerals by 13%.

That could have led the market to bid the company’s stock higher in turn.

Over the last month, the Pilbara Minerals share price has gained 42%. Additionally, it’s recorded a 226% gain over the last 12 months.

The post Why is the Pilbara Minerals (ASX:PLS) share price having such a stellar start to 2022? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• What is JP Morgan saying about ASX lithium shares?

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Sezzle Inc (ASX: SZL) share price has fallen approximately 70% in the last six months.

That is a large decline.

In-fact, it has been a pretty rough few months for several operators including Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P), Splitit Ltd (ASX: SPT) and so on.

The market has punished the buy now, pay later (BNPL) industry.

There is growing commentary and concern that regulators are having a closer a look at the BNPL sector with how large it has become. It is more important for the overall payments system and economy.

Australian BNPL under the spotlight

In Australia, the BNPL sector is coming under greater scrutiny and there is a growing call for merchants to be able to add surcharges to customers who use that option. Why? On the Reserve Bank of Australia’s website is this segment from last year:

The Bank’s longstanding view, which has been borne out by experience following the Bank’s reforms in the early 2000s, is that the right of merchants to apply a surcharge promotes payments system competition and keeps downward pressure on payment costs for businesses.

If a business chooses to apply a surcharge to recover the cost of accepting more expensive payment methods, it may encourage customers to make the payment using a cheaper option. In addition, the possibility that a consumer may choose to use a lower-cost payment method when presented with a surcharge helps put competitive pressure on payment schemes to lower their pricing policies, indirectly lowering merchants’ payments costs. The possibility of surcharging may also help merchants to negotiate lower prices directly with their payments service provider.

By helping keep merchants’ costs down, the right to apply a surcharge means that businesses can offer a lower total price for goods and services to all of their customers.

How does Australia regulation affect the Sezzle share price?

Sezzle isn’t an Australian-based business, though sentiment about Australian peers could possibly impact things.

In the US, where Sezzle is based, officials are also looking at the industry.

Just before Christmas, the Consumer Financial Protection Bureau (CFPB) issued a series of orders to five BNPL companies: Affirm, Afterpay, Klarna, PayPal, and Zip. The CFPB said it is concerned about accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.

CFPB Director Rohit Chopra said:

Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too.

Is the company still growing strongly?

Whilst the Sezzle share price has been sinking, its underlying merchant sales (UMS) have continued to scale quickly.

For the month of November 2021, Sezzle saw its growth of 83% year on year with the annualised run rate reaching US$2.5 billion.

For the 4-day period of Black Friday to Cyber Monday, there was growth of 53% for the US and Canada, with in-store growth of 783% and online rising 46%.

Active merchants went up 84% year on year and active consumers rose 60%.

Is the Sezzle share price a buy?

The broker Ord Minnett thinks so, with a price target of $9.90. If that happened during 2022, it would be a return of around 250%. Ord Minnett notes the success of Sezzle of a partnership in the huge US retail space.

The post Down 70% in six months: Is the Sezzle (ASX:SZL) share price a massive bargain? appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst performing ASX BNPL shares of 2021
• Latitude (ASX:LFS) boss warns many ASX BNPL companies “will go out of business”
• Zip (ASX:Z1P) share price dives 8% amid US concerns and Sezzle merger rumbles
• Why is the Sezzle (ASX:SZL) share price tumbling 7% today?

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. owns and has recommended Afterpay Limited and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay 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 NIB Holdings Limited (ASX: NHF) share price is heading south on Monday following the broader market’s slump. This comes amid the private health insurer announcing some key dates for its 2022 calendar this morning.

NIB shares finished trading on Monday at $7.04, down 2.63%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has recovered throughout the day, posting a drop of just 0.07% to 7,448.2 points.

What’s on the agenda for NIB in 2022?

With the new year upon us, one of Australia’s premier health insurance provider, NIB released its 2022 calendar to investors.

The most important date in the near term is on 21 February, where NIB will deliver its half-year results for FY22.

In addition to its six-month performance report, a 2022 interim dividend is also expected to be announced.

The ex-dividend date for the interim dividend is scheduled to fall the following week on 3 March. This is when investors must have purchased NIB shares to be eligible for the upcoming interim dividend payment.

Furthermore, eligible shareholders can elect to participate in the dividend reinvestment plan (DRP) with the deadline being 7 March. For those who participate, a discount will be applied to the volume-weighted average price of receiving NIB shares.

The payment date for the interim dividend is set for 4 April, where investors will collect a portion of the company’s profits.

In contrast, NIB handed shareholders a fully-franked interim dividend of 10 cents per share for the first-half of FY21.

The above process will again repeat itself with NIB releasing its full-year results again sometime in August. Although these dates are yet to be released by the company.

NIB share price snapshot

NIB shares have been on the move since this time last year, leaping almost 20% over the period.

Based on today’s price, NIB commands a market capitalisation of roughly $3.23 billion and has approximately 458.46 million shares outstanding.

The company currently has a trailing dividend yield of 3.41% and a price-to-earnings (P/E) ratio of 20.

The post Own NIB (ASX:NHF) shares? Here are the key dates for your investor diary in 2022 appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Medibank and NIB rise, Bega sinks
• Here’s why the NIB (ASX:NHF) share price is pushing higher today

Motley Fool contributor Aaron Teboneras owns NIB Holdings Limited. 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 NIB Holdings 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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Are you interested in adding some ASX growth shares to your portfolio in January? If you are, you may want to look at the ones listed below.

Here’s what you need to know about these growth shares:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first growth share to consider is actually an ETF that gives investors easy exposure to many of the Asian region’s best growth shares. The BetaShares Asia Technology Tigers ETF is home to ~50 companies that are leading Asia’s technological revolution. These include Alibaba, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and WeChat owner Tencent. And while regulatory concerns have been weighing on their shares this year, some analysts believe this has created a buying opportunity.

Breville Group Ltd (ASX: BRG)

Another ASX growth share to look at is Breville. It is the leading appliance manufacturer behind the Sage, Kambrook, Baratza, and eponymous Breville brands. These brands have been resonating extremely well with consumers for many years, underpinning consistently solid sales and earnings growth. The good news is that this is expected to continue in the future thanks to favourable industry tailwinds, its continued investment in research and development, and its global expansion. Macquarie is a very positive on Breville. The broker currently has an outperform rating and $34.37 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

A final ASX growth share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies. There are currently over 30,000 tradies using the platform, which is underpinning strong growth across all its key metrics. In addition, the company just announced the acquisition of New Zealand rival Builderscrack. This gives Hipages access to a NZ$26 billion total addressable market and 4,000 active tradies. Goldman Sachs is a big fan of Hipages. It currently has a buy rating and $5.15 price target on its shares.

The post 3 excellent ASX shares for growth investors in January appeared first on The Motley Fool Australia.

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• 2 top ETFs that could be buys in January 2022
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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 Hipages Group Holdings Ltd. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and Hipages Group Holdings Ltd. 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 Sydney Airport (ASX: SYD) share price is one to watch in the coming month as its potential takeover deal unfolds.

Shares in the company are currently swapping hands at $8.69, down 0.12%. In the past month, the Sydney Airport share price has gained just over 1%.

Let’s take a look at what’s happening with the company lately.

Takeover decision pending

Investors are taking a keen interest in Sydney Airport shares lately.

As my Foolish colleague Sebastian reported, Sydney Airport was in the top three most traded S&P/ASX 200 Index (ASX: XJO) shares by volume on Friday when 11 million shares changed hands. At the time of writing, 12.34 million shares had been traded so far today.

In the next few weeks, Sydney Airport’s share price could be impacted by a pending decision on the Sydney Aviation Alliance’s proposed $23.6 billion acquisition of the company. Sydney Aviation Alliance is a consortium of investors including Global Infrastructure Partners, AustralianSuper, IFM Investors, and QSuper.

Shareholders are due to vote on the shareholder offer at a meeting on Thursday 3 February. News that the Foreign Investment Review Board has no objection to the takeover saw the Sydney Airport share price lift in late December.

It was also boosted after the Australian Competition and Consumer Commission and the European Commission gave their approval of the takeover deal on 9 December. Sydney Airport shares gained nearly 3% on the day.

All regulatory conditions for the acquisition have now been met. However, shareholder and court approval are still required.

The Sydney Airport board has recommended investors vote in favour of the $8.75 per share deal in the absence of a superior proposal.

Sydney Airport was in the top 5 best ASX 200 travel shares of 2021, gaining 35.41% for the calendar year. The big movement took place in July when news of the takeover came to light. Shares in the company gained nearly 34% between market close on 2 July and 5 July.

Share price snap shot

The Sydney Airport share price has surged nearly 38% in the past 12 months, well outperforming the  S&P/ASX 200 Index (ASX: XJO)’s gain of around 10%.

Since close of trade on New Year’s Eve, the Sydney Airport share price is stayed in the green, climbing from $8.68 to its current price of $8.69.

Sydney Airport has a market capitalisation of around $23.5 billion based on the current share price.

The post Why is the Sydney Airport (ASX:SYD) share price worth keeping an eye on? appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021
• These 3 ASX 200 shares are topping the volume charts this Thursday
• Sydney Airport (ASX:SYD) share price climbs amid another takeover green light

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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2022 has started off poorly for the Xero Limited (ASX: XRO) share price.

The company’s stock has tumbled 13.38% year to date despite no price-sensitive news having been released to the market. That continues on from a disappointing 2021 wherein its stock slumped 3.6%.

However, the future might be brighter for the business and accounting-focused software-as-a-service provider.

At the time of writing, the Xero share price is $126.66, 3.19% lower than its previous close. For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.06% right now.

Let’s take a look at what might be weighing on the stock lately and what the future might bring it.

What’s weighing on Xero’s stock in 2022?

The last time the market heard price-sensitive news from Xero was way back in mid-November. Thus, it’s not likely that news from the company is driving its share price this month.

Instead, it could be the general tumble that faced many ASX tech stocks last week that has driven Xero’s value lower.

On Thursday, Australia woke up to a bloodbath across much of the United States’ market. Tech shares took the brunt of the plunge, with the Nasdaq Index sliding 3.3%.

The disastrous session was likely due to the US Federal Reserve, which seemingly suggested an upcoming rate hike.  

The Xero share price plummeted alongside the S&P/ASX Technology Index (ASX: XTX) on Thursday. They fell 6.5% and 5.6% respectively.

Unfortunately, its unlikely fears of rate rises have abated. That might be the reason the All Tech Index is down once more today, shedding 0.9% at the time of writing.

What might be next for the Xero share price?

The Motley Fool’s Tony Yoo reported on expectations of the Zero share price last month.

He spoke to Medallion Financial managing director Michael Wayne, who remains certain of the company’s stock. Yoo quoted Wayne as saying:

[Xero] has been a good performer over a long period of time. We are drawn to the capital-light and scalable software-as-a-service attributes of the business.

We continue to be encouraged by the sticky nature of the product.

But the fundie won’t be buying at its current share price. He believes Xero would be a buy at around $110 to $115.

Though, back in mid-December, my Foolish colleague Tristan Harrison reported that Credit Suisse had tagged Xero’s stock with a $160 price target, implying a 26% upside on its current share price.

Either way, the two experts agree Xero will likely continue its historically strong – though, perhaps momentarily disappointing – performance in the future.

The post The Xero (ASX:XRO) share price has already dumped 13% so far this year. What’s next? appeared first on The Motley Fool Australia.

More reading

• Why Accent, Careteq, Pro Medicus, and Xero shares are dropping
• Are these 2 ASX tech shares good buys in January?
• How did the S&P/ASX All Technologies Index (XTX) perform in 2021?
• ASX 200 tech shares on watch after Nasdaq selloff
• Here’s how the Xero (ASX:XRO) share price performed in 2021

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 Xero. The Motley Fool Australia owns and has recommended Xero. 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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In late trade, the S&P/ASX 200 Index (ASX: XJO) is fighting hard to get into positive territory but is just falling short. At the time of writing, the benchmark index is down slightly to 7,448.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Accent Group Ltd (ASX: AX1)

The Accent share price is down 6% to $2.19. This morning analysts at Morgans retained their hold rating but trimmed their price target on the retailer’s shares to $2.40. According to the note, the broker believes that Accent will report a ~50% decline in earnings before interest and tax (EBIT) during the first half. In light of this, it appears to believe its shares don’t offer enough value for money at current levels to be considered a buy.

Careteq Limited (ASX: CTQ)

The Careteq share price is down 22% to 15.5 cents. This morning this assisted living technology company’s shares landed on the ASX boards following the completion of its IPO. Careteq raised $6 million at 20 cents per new share. And while the company claims to have a whopping $39 billion market opportunity, it hasn’t been enough to stop its shares from tumbling on day one.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price is down 3% to $52.44. This is despite the team at Morgans upgrading the health imaging company’s shares to a hold rating just days after downgrading them to a reduce rating. However, the broker still appears to believe that investors should wait for a better entry point around the $50.00 mark.

Xero Limited (ASX: XRO)

The Xero share price is down 3% to $126.74. This follows broad weakness in the tech sector again on Monday. It isn’t just Xero shares falling hard. The S&P ASX All Technology index is down 0.8% at the time of writing. Investors appear concerned with tech valuations given the prospect for rising interest rates in the United States.

The post Why Accent, Careteq, Pro Medicus, and Xero shares are dropping appeared first on The Motley Fool Australia.

More reading

• Why the Accent (ASX:AX1) share price is sinking 6% today
• ASX 200 (ASX:XJO) midday update: AGL and Novonix shares shoot higher
• What’s going on with the Pro Medicus (ASX:PME) share price?
• Top ASX dividend shares to buy in 2022
• Are these 2 ASX tech shares good buys in January?

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 Pro Medicus Ltd. and Xero. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. and Xero. The Motley Fool Australia has recommended Accent Group. 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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Consumer lobby group Choice has called for contracts for difference (CFDs) to be banned to retail investors.

CFDs effectively bet on the changing value of an asset without actually owning the asset itself. These products, offered by many stockbrokers, can be linked to all sorts of assets — shares, stock market indices, foreign currency, commodities, and now cryptocurrencies.

They are usually highly leveraged, meaning potential losses can be far greater than the initial outlay.

Although they are also used by professionals to hedge risk, they can land inexperienced retail investors in trouble due to the big debts involved.

In a 2020 court case, the Federal Court’s Justice Jonathan Beach criticised the heavy debts in CFDs that entrap “unsophisticated retail investors” seeking “financial heroin hits”.

High pressure sales tactics are also used by some brokers to peddle CFDs to vulnerable consumers.

Ban CFDs to retail investors, simple

The court ruling fined three trading firms for “unconscionable conduct” for aggressively selling CFDs. 

That same year the Australian Securities and Investments Commission (ASIC) moved to place temporary limits on such products.

However, that product intervention order expires in May. Choice is urgently calling on its renewal until 2031, or for an outright ban for retail investors.

“If the order is not renewed, consumers would risk potentially losing billions of dollars in CFD losses as seen in 2020,” read Choice’s submission to ASIC.

“CFD issuers would be allowed to resume unfair trading practices, including being able to sell highly-leveraged financial products to retail consumers.”

Both the United States and Hong Kong have banned the sale of CFDs to retail investors. Other jurisdictions like the United Kingdom have restrictions on what can be offered to everyday consumers.

“Choice believes the sale of CFDs to retail clients has limited, if any, public benefit,” stated the Choice submission. 

“Given the widespread harm identified by ASIC, Choice recommends that the sale of CFDs to retail clients be banned.”

Current restrictions protecting retail consumers

Choice quoted ASIC’s own numbers to demonstrate how effective the temporary restrictions have been:

• 94% drop in retail net losses, from $377 million to $22 million
• 50% drop in average retail account loss from $1,962 to $986

“CFDs are precisely the kind of financial product that should be subject to market-wide product interventions.”

ASIC’s current product intervention order will only be extended with a green light from the federal minister for financial services Jane Hume.

The post ASX retail investors should be banned from ‘financial heroin’: Choice appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: AGL and Novonix shares shoot higher
• 2 ASX 200 shares that could be top buys for growth
• 2022 will be an awesome year for ASX shares: Here’s why
• How much the average Australian investor earned in 2021
• 5 things to watch on the ASX 200 on Monday

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 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 DroneShield Ltd (ASX: DRO) share price is pushing higher during afternoon trade following a business update from the company.

At the time of writing, the defence contractors’ shares are up 5.71% to 18.5 cents. In comparison, the All Ordinaries (ASX: XAO) is down 0.21% to 7,757.8 points.

What did DroneShield announce?

Investors are buying up DroneShield shares after the company reported a record performance for 2021.

In its statement to the ASX, DroneShield advised it achieved $10.5 million in revenue last year. This represents a 94% increase when compared against the prior comparable period (FY20 $5.4 million).

In addition, customer and grant cash receipts totalled $14.8 million in 2021, a 174% growth on 2020 levels.

Notably, the company broke new records, despite COVID-19 continuing to impact business operations. The diversity in receipts primarily came from Australia, the United States, and Middle Eastern customers.

This consisted of payments across multiple product lines such as DroneShield’s $3.8 million contract with the Australian Department of Defence.

In addition, DroneShield is actively engaging in a potential US$55 million contract with a Middle Eastern customer. Although details are sketchy at this point in time on who the deal is for and what it involves.

The company noted that it has over $200 million in its sales pipeline across the globe. This is a small fraction of the total $6 billion addressable market for counter-drone, electronic warfare and signals intelligence products.

DroneShield declared a healthy cash balance of $9.5 million, with no debt.

Management commentary

Speaking on the outstanding achievement, DroneShield CEO Oleg Vornik said:

2022 is shaping as another record year, with over $200m in sales pipeline diversified across geographies and products, underpinned by our talented staff who are global leaders in their respective technology segments.

We have also taken advantage of our supply chain relationships to secure access to material amounts of complex circuit board and other inventory, which serves as a further differentiator to our customers, reducing final product delivery lead times, in the current environment of supply chain disruptions for much of the industry.

Importantly, Software as a Service (SaaS) and, generally, software-related revenues are expected to continue increasing as total percentage of customer cash receipts.

About the DroneShield share price

Over the last 12 months, the DroneShield share price has pushed marginally higher by around 3%.

The company’s shares reached a 52-week high of 22.55 cents in September last year, before treading lower.

At today’s price, DroneShield presides a market capitalisation of around $77.37 million, with approximately 418.23 million shares on issue.

The post DroneShield (ASX:DRO) share price soars 5% on rapid revenue growth appeared first on The Motley Fool Australia.

More reading

• Why the DroneShield (ASX:DRO) share price is lifting 5% today

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 DroneShield Ltd. The Motley Fool Australia has recommended DroneShield Ltd. 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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