The Ramsay Health Care Ltd (ASX: RHC) share price is falling this morning. This comes after the company announced key new information and updates within its presentation at the Macquarie Australia Investment Conference. 

At the time of writing, the Ramsay Health Care share price is trading for $66.62. down 0.7%.

What might drive the Ramsay share price 

Credit rating update

Credit rating agency Fitch has accredited Ramsay with an investment-grade credit rating of BBB (stable). 

Ramsay CFO Martyn Roberts said in response to the company’s first international credit rating: 

Achieving this credit rating is a positive first step in our program to diversify Ramsay’s sources of debt and extend and stagger the tenure.

Ramsay Australia update 

Ramsay Australia is the largest private hospital operator in Australia with 72 hospitals and an estimated market share of 27%. Additionally, Ramsay Australia contributed approximately 46% of the Group’s revenue in 1H21. 

Ramsay’s Australia division reported a 4.6% increase in total patient revenue for 3Q21. This was driven by a broad increase in services. In particular, this growth included surgical and non-surgical admissions, psych and rehab admissions, maternity volumes, and activity levels.

The update also noted that average costs per month associated with operating in a COVID environment are gradually reducing. However, the company is working through the higher cost of inventory acquired at the height of COVID. Furthermore, it will continue to be impacted by inflated costs for some items in the current environment. 

Ramsay UK update 

Ramsay UK experienced an 82% decline in revenues in 1H21 to $86 million from $493 million in 1H20. This decrease was due to capacity restrictions. From 1 January 2021 to 31 March, Ramsay has operated under a new volume-based agreement with the National Health Service England (NHS). This agreement utilised the capacity of 14 Ramsay hospitals during 3Q21. 

Ramsay continued to treat non-COVID NHS priority cases. However, continued strict lockdown conditions resulted in a 6.2% decline in admissions on the prior corresponding period. 

From a year-to-date perspective to 31 March 2021, admissions are tracking at approximately 83% of the prior corresponding period (pcp). The relaxation of lockdown restrictions in recent weeks has seen a recovery in the pipeline of private and self-funded patients. 

Ramsay Europe update 

Ramsay Europe is the second-largest private care provider in Europe. The company operates specialist clinics and primary care units in approximately 350 locations across five countries. Ramsay Europe contributed approximately 52.5% of the Group’s revenue in 1H21. 

In mid-March, the French Government started to restrict elective surgery capacity. The company reveals that the average capacity across all French facilities during March/April was 40%. As a result of elective surgery restrictions and COVID lockdowns, admissions for 3Q21 was announced to be “materially below” the pcp. 

More reading

• 2 high quality ASX 50 shares for your retirement portfolio
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• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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 SEEK Limited (ASX: SEK) share price has been on form on Tuesday.

In morning trade, the job listings giant’s shares jumped 7% to a record high of $32.91.

At the time of writing, the SEEK share price has eased back, but remains 3% higher at $31.62.

Why is the SEEK share price charging higher?

The catalyst for the strong rise by the SEEK share price today was the release of a market update this morning.

That update provided investors with details relating to its Zhaopin divestment, its dividend, and its guidance for FY 2021.

In respect to the former, SEEK announced that all conditions precedent to completion of the Zhaopin transaction have been satisfied. As a result, it will now reduce its holding in Zhaopin from 61.1% to 23.5%.

Approximately A$500 million of the total anticipated gross proceeds of A$697 million were received in April.

Dividend update

The SEEK board has decided to return some of the funds raised from the Zhaopin transaction to shareholders.

According to the release, it has determined to pay a dividend of 20 cents per share with a record date of 11 May and a payment date of 24 May.

Post receipt of funds from the transaction and including payment of the dividend, SEEK notes that it is operating well within its original pre-existing borrower group covenant limits. This has enabled it to end its temporary arrangement which allowed an increase in key covenant limits through to 30 June 2021.

FY 2021 guidance

Management notes that its results for the nine months ended 31 March and its outlook for the remainder of the year are ahead of previous expectations.

This has been driven by the outperformance of its SEEK ANZ (primarily SMEs) and SEEK Asia businesses.

As a result, it now expects FY 2021 revenue to be in the order of $1,740 million and EBITDA to be ~$510 million. This compares to previous guidance of $1,700 million and $510 million, respectively.

On the bottom line, reported net profit after tax is expected to be in the order of $150 million, up from $100 million previously.

SEEK’s Founder and CEO, Andrew Bassat, said: “Completion of the Zhaopin transaction and receipt of funds is an important milestone. A portion of the Zhaopin proceeds will be returned to shareholders as a dividend, which reflects our confidence in SEEK’s outlook and ongoing cash generation. Post the dividend, SEEK will still have significant balance sheet flexibility for ongoing re-investment and future dividends.”

“We are pleased to upgrade our FY21 guidance. Our willingness to invest through the cycle has meant our key businesses, in particular SEEK ANZ and SEEK Asia are now capitalising on improving macro conditions. Of note, SEEK ANZ continues to benefit from record high levels of SME hiring activity and increasing usage of our depth products. We look forward to providing another update at SEEK’s full year results in August,” he concluded.

More reading

• These ASX 200 shares are tracking the Aussie economy higher in 2021
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• Is the SEEK (ASX:SEK) share price in the buy zone?
• Where to invest your Rio Tinto (ASX:RIO) dividends

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK 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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Andromeda Metals Ltd (ASX: ADN) shares are edging higher in early trade after the company heralded news regarding its crown jewel – the Great White deposit. At the time of writing, the Andromeda share price is trading 2.38% higher at 21.5 cents.

Shareholders will be grateful for the positive update, with Andromeda shares down by around 26% over the last month. For comparison, the All Ordinaries Index (ASX: XAO) is up by around 2.6% over the same period.

Let’s take a closer look at today’s news from the mineral exploration company.

Halloysite-kaolin

Andromeda shares are in the green following news that the company’s aircore drilling program has begun at its Great White deposit.

The drilling program will allow Andromeda to continue testing and defining the product of its ultra-bright halloysite-kaolin resource. It will also potentially help to extend the zone of mineralisation at the project.

The Great White Deposit is a high-quality, halloysite-kaolin resource located in South Australia. Andromeda has a 75% stake in the project, with its joint venture partner Minotaur Exploration Ltd (ASX: MEP) holding the other 25%.

Halloysite is a rare derivative of kaolin. According to Andromeda, the high purity of halloysite-kaolin from Great White makes it a premium feedstock for the production of high purity alumina (HPA). HPA is used to make electronics, watch faces, smartphone components, and it’s a key ingredient for lithium batteries.

Andromeda has also advised the ultra-bright kaolinite at its Great White deposit works well to create coatings and polymers.

The company reported that testing of ultra-bright kaolinite from Great White found, after processing, its brightness was beyond the scale used to measure kaolinite’s purity.

The aircore drilling program will be targeting areas to the north of the known deposit and to the south of a proposed mining pit.

Andromeda Metals share price snapshot

Today’s news comes at a good time for the Andromeda share price, which has had a challenging year so far on the ASX.

Currently, the Andromeda share price is down 31% year to date. Though, it’s still around 330% higher than it was this time last year.

The mineral explorer has a market capitalisation of around $453 million, with approximately 2 billion shares outstanding.

More reading

• Andromeda Metals (ASX:ADN) share price falls despite project update
• Why is the Andromeda (ASX:ADN) share price on a rollercoaster today?

Motley Fool contributor Brooke Cooper 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.

What happened

Shares of Amazon (NASDAQ: AMZN) were climbing last month after the tech giant posted strong first-quarter earnings at the end of the month and benefited from a broader rally in early April.

According to data from S&P Global Market Intelligence, Amazon shares finished the month up 12%. As you can see from the chart below, the stock gained steadily over much of April.

AMZN data by YCharts

So what

Amazon shares surged early in the month, riding higher on news about Biden’s $2.3 trillion infrastructure plan, a strong March jobs report, and the defeat of a unionization drive at an Alabama warehouse. (Votes against unionizing outnumbered votes for by more than 2-for-1.)

As the leader in e-commerce and cloud infrastructure, Amazon is in a great position to benefit from the passage of an infrastructure bill that would improve roads, helping make deliveries faster, and expand internet access. As a retailer, the company should also benefit from the economic reopening, which is already driving consumer spending higher.

Towards the end of the month, the stock gained in tandem with blowout results from other tech stocks, pointing to strong growth at the company in digital advertising and cloud computing.

Amazon itself posted smashing results in its Q1 report with revenue up 44% to $108.5 billion, outpacing expectations at $104.6 billion, and saw earnings per share more than triple to $15.79, easily beating estimates at $9.54. The company’s profit margins continue to expand rapidly due to growth in businesses like advertising, third-party seller services, and cloud computing.

Now what

Looking ahead, the company expects another round of strong growth in the second quarter, calling for $110 billion to $116 billion, or 27% revenue growth at the midpoint. Though Amazon may face some headwinds from the reopening as shopping habits trend away from e-commerce, the company now has more than 200 million Prime members. Over the last year, it has invested more than $45 billion back into its business in areas like logistics, which will only reinforce its competitive advantage. 

Expect its profit margins to continue to expand as its high-margin businesses keep growing.

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

More reading

• Amazon just posted a record profit margin: 3 reasons it will get even better
• ASX 200 Weekly Wrap: Shares have average week but a great month
• Retail just changed. Forever…
• Disney says it’s using Amazon’s infrastructure for its worldwide Disney+ expansion
• Amazon on track to beat Walmart as biggest U.S. retailer by 2025

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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 recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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 continuing to ascend on the back of another positive update.

At the time of writing, the private health insurer’s shares are swapping hands for $6.31, up 1%.

What did NIB announce?

Investors appear pleased with the company’s strategic direction, pushing NIB shares higher in early morning trade.

In a statement to the ASX, NIB advised it has sold its digital healthcare directory platform, Whitecoat to Commonwealth Bank of Australia (ASX: CBA).

Along with other shareholders, NIB approved the terms of the sale yesterday.

As a result, the company expects to receive roughly $9 million in profit before tax on the sale of its shareholding in Whitecoat.

In the 8 years of operation, Whitecoat has grown to become Australia’s largest digital healthcare services directory. Currently, the online platform features more than 300,000 healthcare providers for consumers to find, book, and pay for treatment. In 2018, Whitecoat expanded its market presence by offering its services to New Zealand.

NIB managing director, Mark Fitzgibbon commented on the sale:

The sale to CBA will lift critical mass and the “network effect” these kinds of platforms rely upon. It will also bring the level of investment required to further develop Whitecoat’s technology.

Just as Elon Musk doesn’t manufacture every component of a Tesla nor will we see single companies build monolithic end to end solutions in the world of digital healthcare. Like for Tesla, our job at nib is to assemble the best tech functionality into a seamless and integrated experience for our members and providers. There remains so much more to do.

Mr Fitzgibbon highlighted that NIB never considered Whitecoat as part of its core strategy. This is because the online platform leans towards healthcare provider payments as opposed to health insurance plans. Furthermore, he assured that the sold-off business represents just one of many components of its total digital ecosystem for consumers and healthcare providers.

About the NIB share price

NIB shares have been on fire lately, storming close to 20% since releasing its trading update and outlook for FY21. It’s worth noting, the company’s shares reached a fresh 52-week high of $6.28 yesterday, before some slight profit-taking occurred.

NIB has a market capitalisation of roughly $2.8 billion, with approximately 457.7 million shares on issue.

More reading

• ASX 200 Weekly Wrap: Shares have average week but a great month
• Top brokers name 3 ASX shares to sell next week
• These were the best performing ASX 200 shares last week
• How the Commonwealth Bank (ASX:CBA) share price moved this week
• Why ASX bank shares may be facing a big sell-off in the next few weeks

Motley Fool contributor Aaron Teboneras owns shares of NIB Holdings Limited. 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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The Recce Pharmaceuticals Ltd (ASX: RCE) share price has been a positive performer on Tuesday.

In morning trade, the pharmaceutical company’s shares are up 3.5% to $1.17.

This latest gain means the Recce Pharmaceuticals share price has now almost tripled in value over the last 12 months.

Why is the Recce Pharmaceuticals share price storming higher?

Investors have been buying Recce Pharmaceuticals shares this morning following the release of an update on its Recce 327 (R327) product.

According to the release, R327 has demonstrated bactericidal activity against all six antibiotic resistant ESKAPE pathogens. This includes drug resistant mutations (superbugs), as well as two additional World Health Organisation (WHO) priority pathogens list. The study was conducted by an independent Contract Research Organisation.

Management advised that the bactericidal activity of R327 demonstrated a three-log or 99.9% reduction in the number of colony forming units (CFUs) over 24 hours against all six strains at various concentrations and times.

What are ESKAPE pathogens?

These antibiotic resistant bacteria have been named ‘ESKAPE’ due to their propensity of escaping the biocidal action of antibiotics. They are collectively responsible for over 720,000 hospital acquired infections in the United States alone each year.

The ESKAPE pathogens include both Gram-positive and Gram-negative bacteria; Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, and Enterobacter species.

The release explains that ESKAPE pathogens are also responsible for 42.2% of blood infections, around 50 million infections each year, resulting in one in five deaths in the community or one in three deaths in hospitals and are associated with higher lengths of stay, cost of care, and mortality compared with non-ESKAPE pathogens.

In light of this, there is a large market opportunity for a successful anti-infective product.

Recce Pharmaceuticals’ CEO, James Graham, said: “We are encouraged by the data from this study and will continue to explore the potential of RECCE 327 to treat hospital-acquired infections. Antimicrobial resistance is one of the most urgent threats to global public health with the suite of ESKAPE pathogens posing a significant threat due to their virulence and rapid development of drug resistance.”

“Additionally, with R327 effective against two more priority pathogens listed by the WHO, we believe reinforces the potential of R327 to treat some of the greatest threats to human health,” he concluded.

More reading

• Why is the Recce (ASX:RCE) share price falling today?
• Recce (ASX:RCE) share price surges 6% on clinical trial registration
• The Recce (ASX:RCE) share price is up 7% after its drug saved a human
• Why EML, NextDC, Qantas, & Recce shares are racing higher

Motley Fool contributor James Mickleboro 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.

The post Why the Recce Pharmaceuticals (ASX:REE) share price is storming higher today appeared first on The Motley Fool Australia.

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The Super Retail Group Ltd (ASX: SUL) share price has been a strong performer in morning trade on Tuesday.

At time of writing, the retail conglomerate’s shares are up 5% to $12.20.

Why is the Super Retail share price surging higher?

Investors have been buying the company’s shares following the release of a trading update ahead of its appearance at the Macquarie Group Ltd (ASX: MQG) Australia Conference 2021.

According to the release, Super Retail’s strong form has continued since the end of the first half.

For the first 44 weeks of FY 2021, Super Retail delivered group like-for-like sales growth of 28%. This is an increase on the like-for-like sales growth rate of 24% that it achieved during the first half and was driven by growth across the business.

The release explains that like-for-like sales are up 21% for Supercheap Auto, 20% for Rebel, 59% for BCF, and 17% for Macpac.

Strong margins continue

Super Retail’s Managing Director and CEO, Anthony Heraghty, was very pleased with the company’s second half performance and notes that its margin improvements have been maintained. This is also likely to have given the Super Retail share price a boost today.

He said: “I am pleased to report that the Group has delivered strong Easter trading across all brands, particularly BCF and Macpac. Given the continued strength of customer demand, the Group has maintained relatively subdued levels of promotional activity in the second half. As a result, the gross margin improvement which the Group delivered in the first half has been maintained in the second half.”

“The Group is in a well-stocked inventory position, which has benefitted from the arrival of orders made in the first half. Higher shipping costs in the second half have impacted inventory costs but these have been partly offset by favourable currency movements.”

“As previously advised, second half operating expenses will reflect catch-up on projects deferred during COVID-19 and increased reinvestment in the business. Given the impact of COVID-19 on FY20 sales, the Group will now report FY21 like-for-like sales against both FY20 and FY19 trading, to enable a comparison with non-COVID trading conditions,” he concluded.

The Super Retail share price is now up over 100% since this time last year.

More reading

• 2 top ASX dividend shares for income investors
• Should you always reinvest your ASX dividends with a DRIP?
• Why retailers are stepping up as top performing ASX shares this week
• Brokers name 2 quality ASX dividend shares to buy
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is under pressure on Tuesday morning.

In early trade, the travel agent’s shares are down 1% to $16.70.

Why is the Flight Centre share price trading lower?

Investors have been selling the company’s shares following the release of a presentation ahead of its appearance at the Macquarie Group Ltd (ASX: MQG) Australia 2021 Conference.

That presentation included an update on its performance during the third quarter of FY 2021.

According to the release, after a subdued sales period in January and February, Flight Centre delivered record COVID-period sales revenue in the month of March.

The release explains that March turnover was more than $100 million higher than February, up 32.7% month-on-month. This took gross quarterly total transaction value (TTV) back above $1 billion for first time since COVID-19.

Positively, management advised that it is expecting to report further growth in April, though no actual figures were provided.

Balance sheet

At the end of the third quarter, the company’s strong balance sheet was maintained. It has $1.5 billion in cash and $1.1 billion in total liquidity.

Furthermore, the company has repaid $100 million in short-term bank debt during the second half following its $400 million convertible note issue.

However, Flight Centre is still operating at a loss. During the third quarter, its monthly operating cash outflows were steady at $30 million to $40 million per month. This reflects the heavy restrictions that are still in place, which are preventing more rapid revenue growth, and reduced JobKeeper subsidies.

In light of this, it is expecting its second half underlying loss to be broadly in line with its first half loss in FY 2021. This could be what is weighing on the Flight Centre share price today.

Positively, management does believe that a return to profitability is coming. It continues to target a return to profit in FY 2022 on a month-to-month basis in both the corporate and leisure segments.

This will be supported by a potential Trans-Atlantic corridor opening between the UK and North America and pent-up demand in leisure and corporate markets.

Current trading levels

Flight Centre provided an update on current trading levels compared to pre-COVID times.

In respect to corporate business, it was tracking at 29% of historic TTV levels at the end of the third quarter. Based on this, management believes it is winning market share.

As for global leisure TTV, that was tracking at 14% of historic levels at the end of the third quarter. Management notes that this is recovering slower than the corporate market due to its heavy weighting towards international travel. Though it sees significant uplift opportunities as travel corridors/bubbles open and restrictions ease for vaccinated travellers.

Following today’s decline, the Flight Centre share price is down 10.5% since this time last month.

More reading

• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• Are ASX travel shares about to go through a big recovery?
• Brokers favourite ASX share for the COVID-19 reopening trade
• Airbnb predicts huge rebound, ASX travel shares in the hot seat

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A new ‘ethics calculator’ has found younger investors don’t find gambling, tobacco, pornography or alcohol a major problem when it comes to selecting stocks. 

Melbourne investment firm Nucleus Wealth surveyed 1,450 actual and potential investors on their morals during stock selection.

One question was whether the person would put money into a company that made money from a “vice” — named as gambling, tobacco, pornography, alcohol or cannabis.

“Only a third (31%) of Gen Ys chose to exclude at least one vice,” said Nucleus chief executive Damien Klassen.

“The majority of Baby Boomers (51%) chose to exclude at least one vice.”

The result reflects the more tolerant attitude towards the vices in recent years in general society. For example, betting companies such as Pointsbet Holdings Ltd (ASX: PBH) and Betmakers Technology Group Ltd (ASX: BET) are doing well, with many US states now legalising wagering on sport.

Another example is the proliferation of cannabis companies, with decriminalisation occurring in many US states and potential liberalisation in Australia.

The study also found women were 70% more likely to be put off by companies dealing in vice.

Anyone can now take the survey yourself, as Nucleus has posted the ethics calculator online. Your answers can be instantly compared to the attitudes of other investors in the different generations.

Everyone’s united on climate change though

The different generations all came together when it came to companies that are dubious on climate change action.

Millennials (53%) and Baby Boomers (49%) led the way on how likely they were to avoid investing in such stocks.

“I think you could extrapolate a message to politicians that climate change is so important that around half of investors will not invest in companies contributing to climate change,” said Klassen.

Human rights were also a unifying force, except for what the survey called the Silent Generation, which were people born before 1946.

“More than 50% of two groups made an exclusion because of human rights concerns. Human rights issues include the lack of women on boards and in senior management positions,” Klassen said.

“The one anomaly was the silent generation’s views, of whom only 26% said they wished to avoid investing in those companies linked to poor human rights practices.”

Investors are anti-war but don’t care about religion

All generations reacted strongly to businesses that contribute to war, according to Klassen.

“Boycotting investing in companies directly associated with war — such as munitions and armaments producers — was another prominent finding,” he said.

“The strongest feeling was amongst Baby Boomers, with 53% indicating they would not invest in war-related industries.”

Women were far more likely to exclude a stock for war than men, the study found.

Animal welfare was another issue where all generations showed empathy, except for the Silent Generation, with only 21% of that group concerned.

The survey also asked investors if they cared if they would avoid putting money into a business because of their religious leanings. 

Most respondents didn’t care.

“This category includes companies typically excluded by investors with Islamic or Catholic values. All generation groups registered only low single digits, and the average across the whole sample is just 2%,” the study stated.

Klassen said that Nucleus allowed its clients to exclude certain companies based on their moral convictions.

“In our experience, there is clearly interest among investors in enacting their moral outlook through the investment process,” he said.

More reading

• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher
• ASX 200 up 0.25%: Westpac result impresses, PointsBet jumps
• Leading brokers name 3 ASX shares to buy today
• Leading broker tips PointsBet (ASX:PBH) share price to shoot higher
• 5 things to watch on the ASX 200 on Monday

Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd and Pointsbet 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

Shares of Facebook (NASDAQ: FB) were climbing last month after the social media giant delivered a blowout earnings report at the end of the month. The stock also rose in early April along with the broader market in response to a number of bullish news reports.

According to data from S&P Global Market Intelligence, the stock finished the month up 10%. As you can see from the chart below, shares spiked on April 29 after the earnings report came out.

So what

Facebook gained early in the month on news of Biden’s infrastructure bill, a better-than-expected March jobs reports, and an accelerating vaccine rollout, before giving back much of those gains in the middle of the month.

On April 29, the stock jumped 7.3% in response to a strong earnings report.

Robust advertising demand drove revenue up 48% to $26.2 billion, well ahead of analyst estimates at $23.7 billion, and profits surged as the company lapped a weak performance in the quarter a year ago when lockdowns first hit. Operating income nearly doubled to $11.4 billion, and earnings per share came in at $3.30, easily beating expectations at $2.37.

The company is benefiting from a boom in digital advertising that drove a 30% increase in ad prices and has also seen solid growth in users thanks to the pandemic. Additionally, CEO Mark Zuckerberg said the company’s Oculus AR/VR platform was reaching an inflection point as revenue in the “other” category, which is mostly made up of Oculus, jumped 146% to $732 million. 

Now what

Facebook did not give specific guidance but called for second-quarter revenue growth to modestly accelerate from the first quarter as it laps the nadir of its performance a year ago. In the second half of the year, it sees revenue growth decelerating as comparisons will become more difficult and it faces headwinds related to changes in Apple‘s ad targeting policy, though the company said those wouldn’t be as severe as once expected.

The stock now trades at a trailing price-to-earnings ratio of just 28, making the tech stock look significantly undervalued after the kind of quarter it just delivered.

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

More reading

• Seven West (ASX:SWM) share price wobbles on market update
• 2 must-see takeaways from Facebook’s earnings call
• Why Facebook reported the most impressive earnings of 2021 so far
• Retail just changed. Forever…
• Why Facebook and Apple couldn’t lift the Nasdaq Thursday

Jeremy Bowman owns shares of Facebook. 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 recommends Apple and Facebook and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Apple and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why Facebook stock jumped 10% last month appeared first on The Motley Fool Australia.

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

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