The Weebit Nano Ltd (ASX: WBT) share price has soared into the green in afternoon trade on Monday.

Weebit shares are exchanging hands at $2.82 apiece, up 6% after hitting an intraday high of $2.90 apiece, a 9% jump from the market open.

Today’s moves in the Weebit share price come after it finished in the red last Friday as the computer chip developer released its FY21 earnings.

A quick refresher on Weebit Nano

Weebit Nano develops ‘next-generation’ memory technology for the semiconductor industry.

Its flagship technology uses resistive RAM (ReRAM) technology to make semiconductor elements cheaper and more efficient.

At the time of writing, Weebit Nano has a market capitalisation of $327 million.

How did the Weebit share price respond to the company’s FY21 earnings?

Weebit recorded no revenue for FY21, stating it was still in the “research and development (R&D) stage” and had not yet reached a commercial stage.

The company recorded losses before tax of $11.3 million, a massive 180% year on year increase from the loss recognised in FY20.

The widened loss was underlined by a 3,400% jump in R&D costs that came to $5.3 million, amid a 380% rise in sales and marketing expenses. This was coupled with a 23% increase in administrative expenses over the year.

This came through to a loss on earnings per share of 10.1 cents, signifying a 77% increase from the year prior.

Investors were quick to put the selling pressure on Weebit shares on Friday, selling the company’s shares in droves. As a result, the Weebit share price closed around 4% lower from the open on Friday.

Despite this downward pressure, the Weebit share price has made a recovery on Monday. However, it is still trading well below its 52-week high of $4.27 back in January.

Weebit Nano share price snapshot

The Weebit Nano share price has posted a year to date return of 19%, extending the previous 12 month’s gain of 368%.

These results have outpaced the S&P/ASX 200 index (ASX: XJO)’s climb of about 25% in the past year.

The post Why the Weebit Nano (ASX:WBT) share price has bounced 9% today appeared first on The Motley Fool Australia.

More reading

• Weebit Nano (ASX:WBT) share price falls as losses accelerate 180%

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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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.

Some of the most popular stocks in the market include SentinelOne and Bill.com, each trading at price-to-sales ratios of more than 100, making them among the most expensive out there.

However, the great Warren Buffett once said: “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.”

In other words, it doesn’t matter how popular or fantastic a business is; if you pay too much for the stock, your returns may disappoint you. Visual search engine Pinterest (NYSE: PINS) has been beaten down since its last reported earnings. Here are three reasons why Pinterest is a buy today.

1. Monetization is in the early stages

Pinterest is by no means a small platform; there are currently 454 million monthly active users (MAUs) worldwide, and it is a truly global business with 80% of its MAUs from outside of the U.S. The company is lumped in with other social media platforms like Facebook and Twitter, but Pinterest describes itself as a visual search engine.

Its users come to Pinterest looking to be “inspired,” searching for decoration ideas, recipes, travel destinations, and anything else where a user can take an idea in their head and find a visual to pair it with.

The company only just recently began focusing on implementing tools to monetize the traffic on its platform, rolling out several features that are still new or not yet fully launched, including ad tools, e-commerce integrations with partners like Shopify, video Pins, and the ability to tag products in Pins.

Pinterest is working to generate advertising revenue by blurring the lines between e-commerce and social media, where users find a great Pin and have the option to buy a product directly from it.

These efforts have begun to dramatically accelerate Pinterest’s average revenue per user (ARPU). In Q1 of 2020, Pinterest generated an average of $0.77 per user in revenue on its 367 million MAUs. Fast-forward to the company’s Q2 2021, five quarters later, and Pinterest generated $1.32 per user on 454 million MAUs. In just over a year, Pinterest has grown its user base by 24% and is making 71% more revenue on each MAU.

Facebook’s average user created $10.12 in revenue for its Q2 2021, more than seven times Pinterest (and Facebook continues to improve its monetization), so there appears to be considerable room for Pinterest to grow its revenue per user over time.

2. The financials are already strong

Pinterest has seen strong revenue growth from the combination of attracting more users and generating more revenue from each. Total revenue grew 125% year over year in Q2 2021, to $613 million.

A rapidly growing business is often unprofitable because the company reinvests everything back into itself for growth, but that isn’t the case with Pinterest. In the same quarter that revenue grew 125%, Pinterest posted a positive EBITDA of $178 million and has been EBITDA-positive over the past four quarters.

While revenue grew 125% year over year, Pinterest’s Q2 expenses increased at a slower rate. For example, its cost of revenue and research and development expenses increased just 19% and 23%, respectively, compared to 2020.

As Pinterest continues to grow revenue faster than its expenses, this should result in accelerated profit growth. Investors should monitor the company’s bottom line to see this through over coming quarters.

3. The stock is discounted

Pinterest is currently expected to earn $2.6 billion in revenue for the full 2021 year, a 54% increase over 2020. The stock’s price-to-sales ratio is currently 14. Let’s compare that to Bill.com, mentioned at the top of the article.

Bill.com just announced its most recent quarter, where it grew revenue 86% year over year, and the company posted a net loss for the quarter. Bill.com is in “growth mode,” so we need to acknowledge its strong 74% profit margins, but does it deserve a valuation that is many multiples higher than Pinterest? Let’s remember that Pinterest just grew 125% and is already profitable.

Buy the Buffett way

The stock market doesn’t always make a lot of sense in the short term, where sentiment more than anything dictates whether stocks go up or down. Fundamentals matter more over the long term, and Pinterest has the growth and profitability to eventually rebound from where it currently trades.

Going against the grain and not buying the stocks that everyone loves can feel uncomfortable, and that’s OK. Buying quality companies at a discount often proves the more lucrative strategy over time, and Pinterest could be the latest example of that. 

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

The post Warren Buffett’s advice makes this stock a buy appeared first on The Motley Fool Australia.

More reading

• Why the Weebit Nano (ASX:WBT) share price has bounced 9% today
• Talga (ASX:TLG) share price lifts following drilling update
• Santos (ASX:STO) share price lifts 3% following oil price rise
• Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning
• Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher

Justin Pope has no position in any of the stocks mentioned. 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 Facebook, Pinterest, Shopify, and Twitter. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended Facebook 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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The Talga Group Ltd (ASX: TLG) share price is in the green after the company released news of its Vittangi Graphite Project.

Talga declared it has begun resource depth extension drilling at the Swedish project. Additionally, the company has received expressions of interest exceeding its targeted 2025 anode production capacity by 14 times. Talga expects this demand to exceed 50 times its production capacity by 2030.

Right now, the Talga share price is $1.32, 2.72% higher than its previous close.

Let’s take a closer look at today’s news from the technology minerals company.

New drilling program and increasing demand

The Talga share price is moving upwards today while its drilling program is going lower.

According to Talga, its Vittangi Project is Europe’s largest graphite resource.

The depth extension drilling will explore underneath 3 existing resources to test the project’s estimated mineral resource.

The project’s JORC exploration target estimate was expanded to between 170 million and 200 million tonne at 20% to 30% graphite last month.

The results of the drilling will likely include information regarding potential underground mining operations and future expansion programs.

Talga expects the drilling to finish in October and internal studies using the assay results to begin in the final quarter of 2021.

Additionally, Talga has submitted exploitation concession applications for the project’s Niska deposit to government authorities. It hopes to receive governmental approval and commence developing the site in line with the Niska Scoping Study.

The deposit’s scoping study found that Talga could become the largest lithium-ion battery anode producer outside China by 2025. That could translate well for the Talga share price.

Talga will submit Niska’s environmental permit once Nunasvaara South received its environmental permit. That’s expected to be before mid-2022.

The company is working with 11 automotive companies and the majority of battery manufacturers in Europe under advancing qualification and procurement processes.

Commentary from management

Talga managing director Mark Thompson commented on the news driving the company’s share price higher today:

With very strong commercial interest in our range of green graphite battery anodes, and progression towards production outlined in the Vittangi Anode Project DFS, Talga is in a strong position to be a key player in the European battery supply chain. However, it is also clear that expansion is a necessary step. Vittangi is Europe’s largest, highest grade graphite resource and a world leader in low emission battery anode production for electric vehicles. We want to see as much of that graphite in electric vehicles as possible, helping to decarbonise the global economy.

Talga share price snapshot

The Talga share price has fallen from grace lately.

It is currently 27% lower than it was at the start of 2021. However, it has gained 122% since this time last year.

The post Talga (ASX:TLG) share price lifts following drilling update appeared first on The Motley Fool Australia.

More reading

• Santos (ASX:STO) share price lifts 3% following oil price rise
• Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning
• Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher
• ReadCloud (ASX:RCL) share price slips despite maiden EBITDA profit
• Magnis Energy (ASX:MNS) share price lifts 5% on lithium battery update

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 Santos Ltd (ASX: STO) share price is on fire today, up a healthy 3.18% so far to $6.16 a share at the time of writing. In contrast, the broader S&P/ASX 200 Index (ASX: XJO) is up 0.16% so far this Monday to 7,500 points.

So why is the Santos share price outperforming today with so much enthusiasm?

Well, there are no major announcements out of this ASX 200 energy share today.

So let’s take a look at what’s happening with the crude oil price. Santos, as an ASX energy share, is exposed to this metric arguably above all others.

Higher crude oil prices turbocharge ASX 200 energy shares

Well, it might be no surprise to reveal then, that crude oil prices have also been on fire over the weekend. The price of Brent crude is currently trading at US$72.70 a barrel, up 2.3% in the past 24 hours. Its sister commodity, West Texas Intermediate (WTI) Crude, is also up 1.96% over the same period to US$68.74 a barrel at the time of writing.

If this is the reason why the Santos share price is on the up today, then surely we would be seeing similar moves in other ASX 200 energy shares. Well, it turns out, we are.

Santos isn’t the only one on the rise today. This Monday also sees Beach Energy Ltd (ASX: BPT) shares up a healthy 1.17% so far to $1.08 a share. Oil Search Ltd (ASX: OSH) is also up by 2.43% to $3.80 a share, as is BHP Group Ltd (ASX: BHP), up 3% today.

This indicates that higher energy prices are buoying the entire ASX 200 energy sector today.

About the Santos share price

Although Santos shares are having their time in the sun today, the past few months haven’t been too kind to investors. Even after today’s substantial rally, Santos shares remain down 4.2% year to date in 2021 so far.

Saying that, this company is still up 8.5% over the past 12 months, and also up by more than 43% over the past 5 years. That underperforms the ASX 200 over the past year (the ASX 200 was up 23.73%), but just pips it over 5 years (39.57%).

At the current Santos share price, the company has a market capitalisation of $12.8 billion, a price-to-earnings (P/E) ratio of 32.6, and a dividend yield of 2.28%.

The post Santos (ASX:STO) share price lifts 3% following oil price rise appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Santos (ASX:STO) share price slumps amid misleading emissions lawsuit
• The Santos (ASX:STO) share price is now trading on a trailing 2.35% fully-franked dividend yield
• 5 things to watch on the ASX 200 on Wednesday

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

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The Sonic Healthcare Limited (ASX: SHL) share price faded its morning gains after opening 2.88% higher to a new all-time high of $43.95.

At the time of writing, shares in the medical diagnostics company are flat at $42.72.

Sonic Healthcare positioned to perform COVID-19 testing for vaccine passport

Sonic Healthcare has played a crucial role in pandemic control, performing ~30 million COVID PCT tests from March 2020 to date.

According to the Australian Financial Review (AFR), Sonic Healthcare is “positioning itself as the top contender to conduct the COVID-19 testing for an eventual “vaccine passport” if there is a government tender process”.

Sonic Healthcare CEO Colin Goldschmidt told the AFR that “While there has not been any signal from the government about such a tender process, at the moment the airlines are trying to co-ordinate since they don’t want COVID-19 infected travellers on the plane,”.

“It’s early days, but we are very much investigating what sort of role we can play in terms of travel passports, vaccination and testing, and then linking in with international air carriers. It’s a big and complicated area,” he said.

COVID-19 testing lifting Sonic Healthcare’s earnings

Sonic Healthcare said in its FY21 results that COVID-19 testing has enhanced its financial performance.

As a result, the company’s revenue increased 28% to $8.8 billion while net profit surged 149% to $1.3 billion.

Despite a strong financial performance, the Sonic Healthcare share price fell 2.76% to $41.65 on the day of the announcement.

One potential concern is the company’s increasing dependency on COVID-19 testing.

Sonic Healthcare flagged that COVID-19 PCR volumes were lower in the second half of the year versus the first half, but have been increasing post-year end with the spread of the Delta variant.

Sonic Healthcare share price snapshot

The Sonic Healthcare share price is up 29.91% year-to-date and 33% in the past 12-months.

The company’s shares will go ex-dividend on Tuesday 7 September for 55 cents per share. Investors can expect the dividend to be paid out on Wednesday 22 September.

The post Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. At the time of writing, the benchmark index is up 0.15% to 7,499 points.

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

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is up 3.5% to $4.99. This follows the release of the online beauty retailer’s full year results. For the 12 months ended 30 June, Adore Beauty reported a 48% increase in revenue to $179.3 million and a 53% jump in EBITDA to $7.6 million. A key driver of this growth was a 39% increase in active customers to 818,000.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price has risen 6% to $21.25. Investors have been buying the iron ore miner’s shares following the release of its full year result. For the 12 months ended 30 June, Fortescue reported a 117% increase in net profit after tax to US$10.3 billion. This was just ahead of the analyst consensus estimate of US$10.2 billion. This strong performance allowed the Fortescue Board to declare a fully franked final dividend of $2.11 per share. This doubled its full year dividend to $3.58 per share.

InvoCare Limited (ASX: IVC)

The InvoCare share price has jumped 8% to $12.14. This follows the release of a strong half year update by the funeral company this morning. InvoCare returned to form during the first half, delivering a 13% increase in operating revenue to $257.3 million and a 31% lift in operating EBITDA to $63.6 million.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has surged 11% higher to $14.42. This strong gain has been driven by the release of the online furniture and homewares retailer’s full year results. And while its numbers were largely pre-released at the end of July, today’s release included an update on current trading. That update revealed that revenue between 1 July and 27 August was up 49% over the prior corresponding period.

The post Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher appeared first on The Motley Fool Australia.

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• Fortescue (ASX:FMG) share price jumps 6% on surging revenue
• ASX 200 midday update: Fortescue result and dividend impress, Altium sinks
• The Fortescue (ASX:FMG) dividend has doubled to record levels
• Temple and Webster (ASX:TPW) share price jumps 13% as revenue soars

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 Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended InvoCare Limited and Temple & Webster Group 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 ReadCloud Ltd (ASX: RCL) share price is sliding after the company released its earnings for the financial year 2021 (FY21).

Right now, the ReadCloud share price is trading at 29 cents, 3.33% lower than its previous close.

ReadCloud share price slumps despite improved margin

Here’s how the provider of digital e-learning resources performed in FY21:

• Maiden full-year underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) profit of $15,553, up from FY20’s underlying EBITDA loss of $161,141
• Statutory net loss after tax of $1.15 million
• $7.68 million of revenue, up 3.1% on that of FY20.

FY21 was a year of ups and downs for ReadCloud.

The company advised that its VET segment saw a 52% increase in gross profit to $2.9 million.

Its full-curriculum segment’s revenue dropped 17% to $3.92 million as a result of a $1 million reduction in reseller revenue and the loss of 4 school customers.

ReadCloud said the drop in revenue was partially offset by an increase in eBook sales and new direct full-curriculum customer schools.

The segment recorded $1.18 million of profit.

The ReadCloud platform saw a 21% increase in direct full-curriculum users, of which it now has 57,000. The number of VET-in-school users also increased 56% to 14,000.

The company’s platform now has more than 116,000 users and more than 550 school and educational institution customers.

Finally, ReadCloud’s published and bookseller expenses dropped to $3.05 million in FY21, down from $3.89 million in FY20.

The company ended the period with $6.3 million of cash and $460,000 in debt.

What happened in FY21 for ReadCloud?

Acquisitions and enhancements drove ReadCloud and its share price in FY21.

The company completed its acquisitions of the College of Sound & Music Production and the Ripponlea Institute in FY21.

It’s now the second-largest private operator in the Vocational Education & Training-in-Schools market in Australia by student numbers and the largest by the number of VET qualifications offered.

ReadCloud spent $1.8 million to acquire the Ripponlea Institute, using a mix of cash and scrip. The institute provides VET programs in the language segment to 70 Australian secondary schools and Certificate IV in Training and Assessment.

According to ReadCloud, the College of Sound & Music Production is the market leader in VET courses for the music industry. It provides VET programs to 184 Australian secondary schools. ReadCloud paid $1.45 million for the acquisition, using a combination of cash and ReadCloud shares.

Additionally, ReadCloud worked to enhance its software platform in FY21. The improvements will boost its scalability and maintain its competitive advantage.

Over FY21, the company signed up 22 new schools for full curriculum needs in 2021. To help navigate the challenges, ReadCloud signed up 3 new full-curriculum resellers during FY21.  

As at 30 July 2021, ReadCloud had more than 57,000 direct full-curriculum school customer users, 21% more than it did at the same time the prior year. It also had more than 45,000 reseller full curriculum school customer users, down 20% compared to June 2020.  

What’s next for ReadCloud?

Here’s what those interested in the ReadCloud share price might want to keep an eye on in FY22:

The company plans to leverage its new acquisitions by taking advantage of new cross-selling opportunities.

85% of ReadCloud’s school customers only use one of its VET providers.

It believes schools generally prefer to deal with fewer registered training organisations to simplify the compliance requirements and to only use one software platform.

ReadCloud plans to begin cross-selling courses across its businesses in the future and expects to see the benefits in FY22.

Additionally, ReadCloud will invest in its full curriculum sales channel in FY22.

In response to COVID-19 restrictions, ReadCloud has implemented a new outbound and online video force selling its full-curriculum segment. The new sales strategy has already brought about a pipeline the company’s working on for the 2022 school selling season.

Finally, ReadCloud plans to grow its reseller sales channels. It’s in discussions with a number of school booksellers that might be interested in becoming a ReadCloud reseller.

The post ReadCloud (ASX:RCL) share price slips despite maiden EBITDA profit appeared first on The Motley Fool Australia.

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• Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning
• Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher
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• Altium (ASX:ALU) share price down 12% after earnings report
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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 shares of and has recommended ReadCloud Limited. The Motley Fool Australia has recommended ReadCloud 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 Magnis Energy Technologies Ltd (ASX: MNS) share price is pushing higher today after the company provided a project update.

At the time of writing, Magnis shares are up 5.56% to 38 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.26% to 7,780 points.

What did Magnis announce?

In a statement to the ASX, Magnis advised that the project status of its New York plant is 23% completed.

The company has completed initial works including the internal building clear-out. Now, facility customisation work has commenced with machinery roll-out to start next month. Furthermore, construction material for the facility has continued to arrive at the factory.

The iM3NY team collaborated with Ramboll to continue advancing the lithium battery plant’s design feed information. This includes progress on a number of detailed engineering design works to bring the project online.

Following the Environmental Justice plan approval, the company’s Air Permit application, currently at the public review stage, has received no objections to date. It is expected to be given the green light sometime in the near future.

The company also appointed experienced renewable energy specialist Lukasz Cianciara as Director of Investments.

Mr Cianciara has spent more than 30 years in Senior Level Capital Markets, working for a variety of high-profile companies. They include Citadel Investment Group, Castlepines Global Equity, Brean Capital, CIBC, Sumitomo Bank Capital Markets and Credit Lyonnais.

Management commentary

iM3NY CEO Chaitanya Sharma noted the company’s rapid developments, saying:

There is some serious progress made to date, with things about to ramp up from this point on, which is exciting for our ever-growing team. We are working tirelessly to achieve our milestones on time and on budget.

Magnis chair Frank Poullas added:

Great progress continues to be made and the appointment of Lukasz is a major milestone as iM3NY looks towards a US Listing.

Magnis share price snapshot

Over the last 12 months, the Magnis share price has soared almost 90%. This came off the back of the US government awarding a lithium-ion battery supply contract to Magnis’ partner, C4V.

On valuation grounds, Magnis presides a market capitalisation of roughly $353 million with approximately 929 million shares on its registry.

The post Magnis Energy (ASX:MNS) share price lifts 5% on lithium battery update appeared first on The Motley Fool Australia.

More reading

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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. 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 Altium Ltd (ASX: ALU) share price has sunk into the red during afternoon trade on Monday.

Shares in the software company are on the decline as the company reported its FY21 earnings with mixed results.

Let’s investigate further.

How did Altium perform in FY21?

Altium grew its total revenue by just 1% year on year to US$191 million. Excluding the divested TASKING business, revenue actually climbed 6% from the year prior.

In terms of the revenue split, board and systems revenue gained 2% over the year, whereas the company’s Octopart segment revenue increased by 42% to US$27 million.

Conversely, Altium’s manufacturing revenue came in 7% behind FY20 at just US$2.4 million.

Altium’s recurring revenue also increased as a percentage of overall revenue, comprising 65% of total sales versus 59% the year prior.

Despite the revenue growth, the company’s profit before tax declined 7% year on year to US$48 million. Altium explained this was from its operating costs increasing at a faster rate than sales revenue. Its FY21 EBITDA also decreased by 3% from the year prior.

Even still, net profit after tax (NPAT) came in at US$35 million, which signifies around an 80% increase from FY20.

Altium’s management foresees a period of growth for FY22. In what should be a positive for the Altium share price, the company has upgraded guidance for FY22 and estimates revenue of between US$209 million to US$217 million for the year. This calls for 16% to 20% sales growth from FY21.

The company also forecasts that annual recurring revenue will increase a further 23%-27% over the next year.

Despite the seemingly robust performance, investors are selling Altium shares from the open on Monday.

At the time of writing, Altium shares have clawed back some ground and are now exchanging hands at $31.02, still an 11% drop into the red.

Altium share price snapshot

The Altium share price has struggled this year to date, posting a loss of 11% since January 1. This extends the loss over the previous 12 months to almost 16%.

Both of these results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of about 25% over the past year.

The post Altium (ASX:ALU) share price down 12% after earnings report appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Fortescue result and dividend impress, Altium sinks
• Altium (ASX:ALU) share price on watch after hitting guidance and upgrading outlook
• 5 things to watch on the ASX 200 on Monday
• 3 fantastic ASX shares to buy in September
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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 Wesfarmers Ltd (ASX: WES) share price has slipped to a 1-month low. This comes as prolonged lockdowns weigh on the diversified conglomerate.

Wesfarmers CEO Rob Scott told the Australian Financial Review (AFR) that it might be time to take a different approach instead of being “fully open or fully shut”.

What did Wesfarmers’ CEO say?

Scott argued for a “more considered plan for the reopening of certain sectors under COVID-safe conditions and easing of some community restrictions, including greater freedoms for those who are vaccinated.”

He flagged that continued lockdowns in New South Wales and Victoria would eventually lead to a point where the “benefits of those lockdowns are outweighed by the broader harm that’s being done.”

About Wesfarmers, Scott said, “We’ve got nearly one in 10 workers in Sydney stood down without pay.”

We are seeing mental health issues skyrocket – particularly in the under-30s. We are seeing small businesses and even large businesses under enormous stress. There comes a tipping point where all of this harm being done by lockdowns is worse than the problem we are trying to solve.

Wesfarmers share price slides to month low

The Wesfarmers share price was trending strongly in August, briefly rallying to an all-time high of $67.20 on 20 August.

The record high was short-lived as Wesfarmers shares closed last Thursday at $63.96 – the day before its FY21 results announcement.

Wesfarmers shares fell 2.75% to $62.20 on Friday. That’s after the company flagged the effect of recent COVID-related lockdowns on its retail divisions.

Bunnings sales for the first 7 weeks of FY22 had declined by 4.7% on the prior corresponding period (pcp). Officeworks sales had also slumped 1.5% on the pcp. While combined Kmart and Target sales for the first 8 weeks of FY22 tumbled 14.3% on pcp. Almost 50% of Kmart and Target stores were forced to close by mid-August.

Management warned that:

Given the impact of lockdowns in recent months and the prospect of continued trading restrictions, earnings in the Group’s retail businesses during the first half of the 2022 financial year may be below the prior corresponding period.

At the time of writing, Wesfarmers share price is down another 3.2% to a low $60.21.

The post Wesfarmers (ASX:WES) share price dips amid boss’ call for easing of restrictions appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun 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 owns shares of and has recommended Wesfarmers 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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