On Monday, the S&P/ASX 200 Index (ASX: XJO) was back on form and started the week with a solid gain. The benchmark index rose 0.65% to 7,370.8 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to give back some of these gains on Melbourne Cup Day. According to the latest SPI futures, the ASX 200 is expected to open the day 7 points or 0.1% lower this morning. This follows a mixed start to the week on Wall Street which in late trades sees the Dow Jones up 0.1%, the S&P 500 down 0.1%, and the Nasdaq trading 0.3% higher.

Reserve Bank meeting

The Reserve Bank of Australia will be meeting today to discuss the cash rate. While the market is expecting the central bank to keep rates on hold at the current record low of 0.1%, it is also expected to signal the end of quantitative easing, scrap its yield target framework, and could bring forward its rate hike guidance.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a decent day after a solid night for oil prices. According to Bloomberg, the WTI crude oil price is up 0.55% to US$84.03 a barrel and the Brent crude oil price has risen 1.1% to US$84.63 a barrel. An improving demand outlook boosted prices.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could rise today after the gold price pushed higher. According to CNBC, the spot gold price is up 0.5% to US$1,792.7 ounce. The precious metal appears to be trading in a narrow range ahead of the Federal Reserve meeting this week.

Westpac shares downgraded

The Westpac Banking Corp (ASX: WBC) share price will be on watch today after being downgraded by analysts at Goldman Sachs. This morning the broker downgraded the bank’s shares to a neutral rating with a $25.60 price target. Goldman commented: “We revise our FY22/23/24E EPS by -6.0%/-9.1%/-9.5% driven by: i) a weaker NIM trajectory, ii) lower other operating income from asset sales and weaker markets, partly offset by iii) better performance on BDDs.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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• Here’s everything to know about the Westpac (ASX:WBC) dividend after its earnings update
• ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn
• Can the Macquarie (ASX:MQG) share price break new highs over $200?

Motley Fool contributor James Mickleboro owns shares of 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 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 Global Lithium Resources Ltd (ASX: GL1) share price took off today following a company update on its recent equity raise.

At Monday’s closing bell, the lithium explorer’s shares finished the day 34.02% higher to 65 cents a pop.

Global Lithium completes placement

In its release, Global Lithium advised it had received firm commitments for its strategic placement to raise $13.6 million.

The company highlighted strong support from a major lithium industry player, Yibin Tianyi. The lithium chemical arm of Contemporary Amperex Technology Co (CATL) invested $6.2 million for a 9.9% interest in Global Lithium. CATL is arguably the world’s biggest electric vehicle producer.

The remaining amount ($7.3 million) came from an array of institutional and sophisticated investors.

The offer will see approximately 36.88 million new ordinary shares issued at a price of 37 cents each. This represents around a 31% discount to the last closing price of 48.5 cents on 28 October (before going into a trading halt).

Global Lithium will use its existing placement capacity to create the new shares for institutional and sophisticated investors. Under listing rule 7.1, this allows up to 15% of its total shares to be issued without shareholder approval.

Furthermore, the company will seek shareholder approval at its annual general meeting (AGM) in December for the Yibin Tianyi placement.

The directors of Global Lithium have also taken up the decision to participate in the capital raise. This too will be subject to shareholders giving the nod at the AGM.

What’s the money for?

The company will primarily use the proceeds to accelerate lithium exploration at the Marble Bar Lithium Project (MBLP). In particular, the funds will be allocated to the following:

• Further lithium resource extension, targeting and regional exploration drilling
• Initial exploration drilling along the southern extension of the greenstone belt
• Further exploration at the company’s under-explored gold prospects, including the Twin Veins project
• Completion of preliminary metallurgical test work program; and
• Pursue potential growth opportunities.

Global Lithium managing director, Jamie Wright commented:

To be able to secure support from a lithium industry participant with the credibility of Yibin Tianyi is a strong vote of confidence in our Company and we look forward to developing our relationship with them over time.

The capital raising funds provide us with the ability to ramp up our activities on site as we seek to grow our project and we are looking forward to a busy 2022 period.

Drilling is continuing at our MBLP and we will update the market as we start to receive results.

About the Global Lithium share price

Adding to today’s rise, Global Lithium shares have gained around 225% since listing on the ASX in May. The company’s share price reached an all-time high of 69 cents today.

Based on valuation grounds, Global Lithium presides a market capitalisation of roughly $57.83 million, with over 88.9 million shares outstanding.

The post Global Lithium (ASX:GL1) share price explodes 34% higher on capital raising update appeared first on The Motley Fool Australia.

More reading

• Here’s why the Global Lithium (ASX:GL1) share price rocketed 15% before a trading halt

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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The Appen Ltd (ASX: APX) share price has been marching upwards off of its lows during the past month. Despite this, the data annotation company hasn’t released a price-sensitive announcement since late August. This beckons an eyebrow raise in light of the recent performance.

Shares in Appen settled at $11.08 at the end of Monday’s trading session, adding 3.1% in the process. Today’s gain means the Appen share price has now delivered a head-turning 23% over the last month. For comparison, the S&P/ASX 200 Index (ASX: XJO) added 1.3%. Meanwhile, another member of the WAAAX shares, Altium Limited (ASX: ALU) climbed 10%.

So, what gives? Why is a share price that was crushed 65% in the last year suddenly showing some signs of life?

Let’s take a look.

Why has the Appen share price been performing the last month?

It wasn’t too long ago that blood was in the streets of the Appen share price. Following downgrades to the company’s guidance, investors scurried to the lifeboats of a potentially sinking ship. As a result, the value of Appen descended along with the waning sentiment.

Since then, some time has elapsed and the acquisition of Quadrant Global has been completed. At the same time, investors’ nerves seemed to have settled as the share price finds a groove around the low double-digit price point.

Additionally, retail market participants don’t seem to be the only ones looking at Appen with fresh eyes recently. As we have previously covered, analysts at Citi have retained a buy rating on Appen shares with a 12-month price target of $17.

Furthermore, insiders within the Appen management team and board of directors have been loading up lately. According to notices, Richard Freudenstein and Venessa Liu have both purchased shares during the past few months. Notably, board member Freudenstein bought up $313,941 worth of Appen shares at the end of August.

Considering all these points in conjunction with each other, there is potential the broader market is beginning to see value in the Appen share price.

For reference, the company currently trades on a price-to-earnings (P/E) ratio of 33. This compares to the Australian IT industry average P/E ratio of 45 times.

The post The Appen (ASX:APX) share price has jumped 23% in the last month appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium and Appen Ltd. The Motley Fool Australia owns shares of and has recommended Altium and Appen 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 Pioneer Credit Ltd (ASX: PNC) share price has come out of a trading halt to accelerate to a 2-month high today. The financial service provider announced two positive updates which had led investors to load up on its shares.

At one point during early afternoon trade, Pioneer shares rose as high as 60 cents apiece. However, after some profit-taking, its shares have retraced to close at 58 cents, up 23.40%.

What did Pioneer update the ASX with?

In its release, Pioneer advised it has secured a $200 million four-year senior debt facility agreement with Fortress Investment Group.

In addition, the company amended the expiry date for its medium-term notes until 2026 and increased the size to $60 million.

It is expected that both the senior debt facility along with the medium-term notes will reduce Pioneer’s cost of funding. This will provide the company with ample firepower to pursue growth opportunities. The $260 million of senior and subordinated facilities frees up $32 million on the balance sheet.

Pioneer managing director, Keith John commented:

Upon completion, we expect Pioneer’s enhanced capital structure will return the business to profitability.

By introducing flexibility into our balance sheet, we will be able to aggressively compete in the acquisition of PDP’s1 and firmly establish Pioneer as the top challenger brand in the industry.

Furthermore, our demonstrated ability to grow the Pioneer performing arrangements portfolio will continue to drive liquidations and realise the value of our future investments.

Pioneer also completed a $5.4 million capital raise to boost its liquidity profile. Institutional and high-net worth investors took part in the offer.

The company issued each share at a price of 60 cents each. This represents a 27% premium on last Thursday’s closing price of Pioneer shares at 47 cents.

The Company revealed a significant turnaround for FY22 and expects earnings growth for years to come.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is projected to be more than $59 million. This is $5 million more than what was achieved in FY21.

Net profit after tax (NPAT) is also expected to rise to $1.5 million, up from a negative $19 million the year before.

Pioneer share price summary

Over the past 12 months, Pioneer shares have lost around 20%. Year-to-date hasn’t been so positive, with the company share price flat for the period.

Based on valuation grounds, Pioneer presides a market capitalisation of roughly $38.56 million, with 71.4 million shares on issue.

The post Here’s why the Pioneer (ASX:PNC) share price raced 23% higher on Monday appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ASX growth shares to buy this month
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• Here are the top 10 ASX shares today
• Is the AGL Energy (ASX:AGL) share price a value trap?
• 3 great ASX tech shares that might be good buys

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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There are a lot of growth shares for investors to choose from on the Australian share market.

To narrow things down, I have picked out three ASX growth shares that are highly rated. Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. It is the leading appliance manufacturer behind a collection of brands including Sage and the eponymous Breville brand. Over the last decade, the company has been growing at a solid rate. And FY 2021 was no exception. During the 12 months, Breville recorded a 24.7% increase in revenue to $1,187.7 million and a 42.3% jump in net profit after tax to $91 million. Positively, further solid profit growth is expected by analysts in FY 2022 thanks to strong demand, the benefits of the Baratza acquisition, and its international expansion.

Morgans is positive on FY 2022 and the company’s long term growth outlook. As a result, its analysts currently have an add rating and $34.00 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another 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. In FY 2021, Hipages outperformed its upgraded full year revenue guidance with a 22% year on year jump to $55.8 million. Pleasingly, it has started FY 2022 strongly. Despite lockdowns in New South Wales and Victoria, Hipages continued to grow its recurring revenue during the first quarter. It reported a 14% increase in revenue over the prior corresponding period to $14.9 million. Approximately 96% of this revenue is now recurring in nature.

Goldman Sachs was impressed with last week’s update. In response, the broker retained its a buy rating and lifted its price target to $4.45.

Kogan.com Ltd (ASX: KGN)

A final ASX growth share to look at is this growing ecommerce company. It has been benefitting greatly from the shift to online shopping over the last few years and looks well-placed to continue this trend over the long term. Especially given its strong market position, growing private label business, recent acquisitions, and rapidly increasing loyalty program members. And while Kogan is going through a difficult spot with its inventory, this appears to be more than reflected in its recent share price performance.

Credit Suisse has an outperform rating and $13.88 price target on its shares.

The post 3 fantastic ASX growth shares to buy this month 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. owns shares of and has recommended Hipages Group Holdings Ltd. and Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended 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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Shares in biopharmaceutical company Antisense Therapeutics Limited (ASX: ANP) made an abrupt downturn today and finished the session 18.64% lower at 24 cents apiece.

The Antisense Therapeutics share price fell sharply after the company released a key update to the market today regarding its current and upcoming clinical programs.

Here are the details.

What did Antisense announce?

Antisense advised that it received the thumbs up from European regulators regarding the next steps to authorisation of its drug candidate ATL1102. The drug is being investigated as a potential remedial and medical breakthrough in the treatment of non-ambulant boys with Duchenne muscular dystrophy (DMD).

As the company is currently running a Phase IIb/III trial for the compound, the news ensures the study will be completed in accordance to European standards. This earmark is an integral step of approval for getting drugs to market in the EU.

As a result of the update, Antisense also announced that it has “received firm commitments in an oversubscribed institutional placement” to raise $20 million via an issue of approximately 83.3 million new fully paid ordinary shares.

About the placement

The placement was at a value of 24 cents per share – a corresponding 16% discount from Antisense’s opening price on Monday – and represents around 12% of Antisense’s fully diluted float at the time of writing.

Shareholders will therefore be diluted by that amount once the transaction and share allotment settles on Thursday.

Antisense noted that the placement was “strongly supported by existing shareholders, with the company also welcoming a number of new institutional investors to the share register”.

Aside from this placement, the company also intends to conduct a non-underwritten 1 for 9.4 entitlement offer to raise an additional $16.8 million at the same 24 cents per share.

One caveat embedded into both placement includes 1:2 free-attaching options issued to participants in both offers.

If all options are fully exercised, this will raise a further $36.8 million to “fund the clinical program through to Phase IIb/III trial results in mid-2024 whilst also funding the open label extension study at the same point”.

What’s the money for?

All-in-all, Antisense intends to use the monies from both financing rounds to fund a series of advancements, including:

• Progression of the current Phase IIb/III DMD clinical trial
• Startup costs for an open label expansion study
• Drug manufacturing costs
• Ongoing research and development (R&D) commitments
• Working capital requirements for ongoing operations.

Antisense laid out additional details of its operations, the capital raising plans, and its ongoing clinical programmes in an investor presentation today as well.

Management commentary

Speaking on the announcement, Antisense managing director Mark Diamond said:

We are both pleased and extremely proud to have received this positive opinion… which provides us with great confidence to undertake our Phase IIb/III trial in DMD in a manner consistent with the expectations of the regulator and which if successfully completed, could bring us an approval to market ATL1102 for the treatment of DMD in Europe, the world’s second largest pharmaceutical market.

Antisense Therapeutics share price snapshot

The Antisense Therapeutics share price has been an outsized performer this last 12 months, gaining 123% in that time after rallying 88% since January 1 this year.

Both of these results are a step ahead of the benchmark S&P/ASX 200 index (ASX: XJO)’s climb of around 25% in the same time.

The post Here’s why the Antisense Therapeutics (ASX:ANP) share price has plummeted 19% on Monday appeared first on The Motley Fool Australia.

More reading

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• Why Jefferies sees 35% upside in the HT&E (ASX:HT1) share price

The author Zach Bristow has no positions 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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Today, the S&P/ASX 200 Index (ASX: XJO) kicked off the new week with a green session. At the end of the trading day, the benchmark index finished 0.64% higher at 7,370.8 points.

The markets were awash with gains across all sectors except financials on Monday. Investors exhibited disappointment for the full-year result of Westpac Banking Corp (ASX: WBC) posted today. Acting on this emotion, the market sold off the big four bank by nearly 7%. Meanwhile, communication services and utilities performed exceptionally well.

The question is: which shares delivered the biggest returns to investors on the ASX today? Here are the ten stocks that rose to the occasion:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Imugene Ltd (ASX: IMU) was the biggest gainer today. Shares in the biotechnology company rose 6.06%. This move followed the announcement of a strategic collaboration with US-based Eureka Therapeutics. Find out more about Imugene here.

The next biggest gaining ASX share today was Orocobre Ltd (ASX: ORE). The lithium producer’s share price climbed 5.73% as the sector rallied today. Uncover the latest Orocobre details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Imugene Ltd (ASX: IMU)	$0.525	6.06%
Orocobre Ltd (ASX: ORE)	$9.41	5.73%
WiseTech Global Ltd (ASX: WTC)	$53.98	5.68%
Xero Ltd (ASX: XRO)	$155.63	4.09%
Champion Iron Ltd (ASX: CIA)	$4.58	4.09%
Charter Hall Group (ASX: CHC)	$18.02	3.98%
Codan Ltd (ASX: CDA)	$10.44	3.88%
Ausnet Services Ltd (ASX: AST)	$2.565	3.85%
Reece Ltd (ASX: REH)	$20.64	3.77%
Megaport Ltd (ASX: MP1)	$18.58	3.74%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today 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. owns shares of and has recommended MEGAPORT FPO, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended MEGAPORT 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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As the AGL Energy Limited (ASX: AGL) share price slips further to the downside on Monday, some investors might be wondering if it is a cheap company that will keep getting cheaper.

Now trading for $5.65 at market close, the electricity generating and retailing company has evaporated 55.55% of its share price from this time a year ago. Even worse, shares in AGL Energy have tumbled 71.41% over the past 5 years, signifying value destruction en masse.

To put the underperformance into context — $10,000 invested in the S&P/ASX 200 Index (ASX: XJO) 5 years ago would now be worth ~$14,233 before dividends. Meanwhile, the same amount invested into AGL Energy would now be worth a disappointing ~$2,859 before dividends. That means an ASX investor would have been nearly 5 times better off in the Aussie index than in AGL shares by this time.

At present, AGL could be considered ‘cheap’ based on some valuation metrics. This poses the question, is the AGL share price a value trap waiting to leave its mark on another bunch of unsuspecting value investors. Or, is the company set to stage a comeback.

Sometimes you get what you pay for

Typically, a lot of the metrics used for assessing ‘value’ are rear-facing. Whether it be a 12-month trailing price-to-earnings (P/E) ratio, price-to-book ratio, debt-to-equity ratio, or net tangible assets.

These financial tools are heavily weighted towards the road already travelled, not so much the road ahead. The danger hidden within this is the potential for the road ahead to be filled with even more potholes than experienced prior.

For example, AGL Energy’s P/E ratio of ~10 at the end of June 2020 might have looked appealing. Especially when compared to the utilities industry average of nearly 20. Yet, now the AGL share price is far lower and has a negative P/E ratio due to its current unprofitability.

While there are often companies ripe for a contrarian approach, sometimes you get what you pay for. Often a company will be donning a low P/E ratio as a result of its less than appealing future outlook. In some cases, this unattractive future is exactly what plays out, pushing the share price lower.

What about the AGL Energy share price?

This brings us to the question: is the AGL Energy share price a value trap? It has appeared to be a prime example in recent years. However, to label it as a trap for future investors is not possible. Mostly because only time will reveal the answer.

Currently, the company is struggling through a loss-making period, a high debt-to-equity ratio, and a renewable shift that is putting the pinch on energy margins. The AGL Energy share price will be dependent on how the business structurally performs from here.

If profits resume and dividends are increased, then it will be shown it was a value trap no more. Whereas, if the company is unable to turn things around, the value trap could be on full display.

The post Is the AGL Energy (ASX:AGL) share price a value trap? 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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ASX tech shares may be the place to look for faster-than-average profit growth because of the ability to grow revenue and margins at a quicker pace than typical industrial businesses due to the intangible nature of software.

Some tech businesses are expecting a lot of growth over the next decade, and have already experienced a substantial increase in size over the last five years.

Here are three ASX tech shares that are growing quickly:

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an exchange-traded fund (ETF) that is based on the e-sports and video gaming industry.

It had a total of 26 positions at the end of September 2021. Some of its holdings are tech giants, some are hardware manufacturers and some are game developers. You may have heard some of the top ten holdings: Nvidia, Tencent, Advanced Micro Devices, Sea, Nintendo, Activision Blizzard, Netease, Electronic Arts, Bandai Namco and Take-Two Interactive Software.

The revenue of the gaming sector has been growing revenue at a double digit pace for years and it could continue to do so as non-Western regions spend on video gaming content as well as watching it.

E-sports continues to grow in popularity and is creating various earnings streams for the companies involved, including fees, advertising and so on.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is a large ASX tech share that provides enterprise resource planning (ERP) software.

The company is currently transitioning its clients to a software-as-a-service model (SaaS). It’s seeing rapid growth, with the recent FY21 half-year update showing SaaS annual recurring revenue rising by 41% to $155.8 million. The company’s HY21 profit before tax increased by 44% to $37.3 million.

Over the long-term it’s expecting “strong” growth driven by its global SaaS software as it increases its usage with existing clients, wins new clients and expands globally.

Over the next few years, management are predicting that its SaaS and continuing business is expected to grow by approximately 15% per annum, once it has wound down its legacy licence fee business. It also sees its total ARR increasing to more than $500 million by FY26m from the current (at the time) base of $233 million.

The company is expecting that economies of scale from its global SaaS ERP software will help its profit before tax margin increase to 35%.

The ASX tech share recently expanded its business with an expected £12 million acquisition of Scientia Resources Management, a UK company that services the higher education sector.

TechnologyOne is currently rated as a buy by the broker Morgans.

Hub24 Ltd (ASX: HUB)

Hub24 is a fintech business that provides platforms for financial advisers and their clients with a range of investment options with managed portfolios, as well as leading transaction and reporting functionality.

The core business is growing quickly. At 30 September 2021, its funds under administration (FUA) had grown to $63.2 billion, with the platform FUA rising to $45.4 billion – that was an increase of 139% year on year and 9.5% quarter on quarter. This was helped by platform net inflows of $3 billion.

Its new business pipeline continues to grow, with 30 new license agreements signed during the first quarter of FY22.

The ASX tech share also plans to expand its business and win more clients with the acquisition of Class Ltd (ASX: CL1). Class shareholders will get 1 Hub24 share for every 11 Class shares they have, plus $0.10. It is expected that the deal will deliver increased value, efficiency and product solutions for both existing and new customers. The deal is expected to add 8% to underlying earnings per share (EPS).

Hub24 is currently rated as a buy by the broker Credit Suisse, with a price target of $36.50. Credit Suisse thinks that it can offer good cross-selling potential between the two businesses.

According to Credit Suisse, the Hub24 share price is valued at 57x FY23’s estimated earnings.

The post 3 great ASX tech shares that might be good buys appeared first on The Motley Fool Australia.

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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 shares of and has recommended Hub24 Ltd. The Motley Fool Australia owns shares of and has recommended Class Limited. The Motley Fool Australia has recommended Hub24 Ltd and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. 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.

Pinterest (NYSE: PINS) and Snap (NYSE: SNAP) both suffered steep declines over the past month.

Pinterest’s stock, which had been under pressure since its disappointing second-quarter report in late July, jumped to the low $60s in late October amid rumors of an acquisition by PayPal (NASDAQ: PYPL). However, the stock subsequently tumbled to the mid $40s after PayPal shot down those rumors.

Snap’s stock, which had steadily risen after the company offered bullish long-term guidance at its investors day in February, plunged to a five-month low in late October after it posted a disappointing third-quarter report.Over the past three months, shares of Pinterest and Snap have declined about 40% and 30%, respectively, as the S&P 500 has risen 4%. That volatility burned many investors who recently bought both stocks, but will both companies recover and generate much bigger gains over the long term?

Let’s take a closer look at Pinterest and Snap’s plans for the future and see which social media company might be more valuable by 2025.

How much are Pinterest and Snap worth today?

Pinterest is worth about $29.4 billion, or eleven times this year’s sales, as of this writing. Snap is worth $87.6 billion, or 22 times this year’s sales.

Here’s how rapidly both companies have been growing over the past two years, and what analysts are expecting for the next two years:

Revenue Growth (YOY)	FY 2019	FY 2020	FY 2021 (Estimate)	FY 2022 (Estimate)
Pinterest	51%	48%	55%	31%
Snap	45%	46%	62%	41%

Source: Earnings reports. Yahoo Finance. YOY = Year-over-year.

Based on those growth rates, it seems odd that Snap’s price-to-sales ratio is twice as high as Pinterest’s. However, investors are still willing to pay a premium for Snap because it isn’t losing active users on a sequential basis — as Pinterest did in the second quarter.

Can Pinterest and Snap keep growing?

Pinterest’s number of monthly active users (MAUs) rose from 265 million at the end of 2018 to 454 million in the second quarter of 2021. But that marked a sequential decline from 478 million MAUs in the first quarter.

The bulls believe that slowdown, which Pinterest attributed to reopening trends, will be temporary. But the bears believe its growth peaked during the pandemic, and that its MAU growth will stall out as those tailwinds fade.

That uncertainty, along with Pinterest’s reluctance to provide multi-year growth targets, has made it difficult to assess the company’s future.

Statista Research estimates Pinterest’s MAUs in the U.S. will steadily climb from 91 million in the second quarter of 2021 to nearly 109 million by 2025. eMarketer expects 18.5% of Pinterest’s MAUs to buy products from its shoppable pins by 2025, up from 16.2% in 2021.

Pinterest’s international business has been gaining MAUs at a much faster rate than its domestic business. If Pinterest grows its overseas MAUs at twice the rate of its domestic MAUs over the next four years, it could increase its international MAUs from 363 million in the second quarter of 2021 to 510 million in 2025 — and give the platform nearly 620 million MAUs.

Snap, which ended the third quarter with 306 million daily active users (DAUs), expects to grow its annual revenue by about 50% over the next few years. It expects the expansion of its self-service ads, a rising mix of higher-value video ads, new augmented reality games and filters, and the expansion of a “social shopping” platform to drive that growth.

However, Snap also seemingly underestimated the impact of Apple‘s (NASDAQ: AAPL) iOS update, which allowed users to opt out of data tracking features and targeted ads. That change caused it to miss analysts’ revenue estimates last quarter, and could throttle its near-term growth.

Which company will be worth more by 2025?

Pinterest and Snap will both face significant challenges over the next four years. But if Pinterest stabilizes its MAU growth and continues to expand its social shopping ecosystem, its revenue should continue to rise.

If Snap stays ahead of Meta‘s Instagram and ByteDance‘s TikTok in the teen market, expands its AR and social shopping platforms, and adapts to Apple’s platform changes, it could also keep growing.

Therefore, both companies should continue to grow at comparable rates through 2025. If Pinterest hits analysts’ targets for 2021 and 2022, then continues to generate an average of 25% revenue growth for the following three years, it could generate $6.7 billion in revenue in 2025. If Snap follows that same path, it could generate $11.2 billion in revenue in 2025.

So even if Pinterest and Snap were trading at the same price-to-sales ratios in 2025, Snap would likely still have a much higher market cap.

Look beyond the market caps

Pinterest probably won’t be worth more than Snap by 2025, but that doesn’t make it an inferior investment. Both of these social media companies have clear strengths and weaknesses, and investors should focus on those issues instead of fretting over which company has the higher market cap. 

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

The post Will Pinterest be worth more than Snap by 2025? appeared first on The Motley Fool Australia.

More reading

• Why Pinterest stock plunged on Monday
• Why PayPal stock popped On Monday
• Pinterest Q3 earnings: Here’s what to look for
• If Paypal buys Pinterest, what could it mean for Afterpay shares?
• Pinterest stock: Buy, sell, or hold ahead of possible buyout?

Leo Sun owns shares of Apple, Pinterest, and Snap Inc. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple, Meta Platforms, Inc., PayPal Holdings, and Pinterest. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple, Meta Platforms, Inc., PayPal Holdings, and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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