The Uscom Ltd (ASX: UCM) share price tumbled today after the company released its quarterly cash report, showing significant falls across every major category.

The Uscom share price was down 6% at the close of trade today, at 15.5 cents per share.

A quick take on Uscom

Uscom is a medical technology company engaged in developing, designing, manufacturing, and marketing premium non-invasive cardiovascular and pulmonary medical devices.

The company’s geographical segment includes Australia, Asia, the Americas, Europe, and other regions. It generates maximum revenue from Asia.

The company offers USCOM 1A, a non-invasive hemodynamic monitor that measures cardiovascular function; BP+; a supra-systolic oscillometric central blood pressure monitor that measures blood pressure and blood pressure waveforms at the heart; and SpiroSonic, a pulmonary function testing device based on multi-path ultrasound technology.

Uscom’s financial woes

For the third quarter of FY21, Uscom reported cash receipts of $0.89 million for the period, which is down 53% from $1.91 million in the preceding quarter, and at $4.2 million year-to-date with Q4 trading still ahead.

Uscom’s sales revenue was $0.78 million, down 20% from $0.98 million in the previous quarter. This follows its record growth of cash receipts of 149% and sales revenue of 125% reported in the prior Q2.

For the current quarter, Uscom’s global entity reported a net operating cash outflow of $0.25 million, while for Q2, cash flow was positive at $0.3 million. Uscom remains cash flow positive for the YTD with $2.03 million cash on hand on 31 March.

What did management say?

Uscom executive chair Professor Rob Phillips said that the future looked a lot brighter for the company.

Q3 sales and receipts remain strong but down due to the impact of the Chinese New Year, effecting China activity for 6 weeks, while both European and US activities remained constrained by the pandemic. Hungary has effectively been closed for the quarter and our US team are still unable to attend hospitals and clinics.

However, we remain cash flow positive for the YTD, supported by strong China sales. Going forward, management noted the 18.3% GDP growth in China for the March quarter and look forward to this growth converting into health spending.

Uscom share price snapshot

The Uscom share price has been tumbling for some time. It’s down 11% over the past month, 3% since 2021 began and 26% over the past 12 months. 

More reading

• Bubs (ASX:BUB) share price hits multi-year low but could keep sinking
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• ASX 200 dips, NIB soars, Perenti rises
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• What’s behind the rising BHP (ASX:BHP) share price today?

Motley Fool contributor Lucas Radbourne-Pugh 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 Bubs Australia Ltd (ASX: BUB) share price was under pressure yet again on Monday.

The goat’s milk infant formula company’s shares tumbled a further 3.5% to a multi-year low of 42.5 cents.

This means the Bubs share price is now down over 64% from its 52-week high of $1.19.

Why is the Bubs share price at a multi-year low?

Investors have been heading to the exits in their droves this year amid concerns over its disappointing performance and its ongoing cash burn.

And with Bubs due to release its third quarter update later this week, it appears as though some investors aren’t sticking around to see that.

Bubs in FY 2021

As with rival a2 Milk Company (ASX: A2M), FY 2021 has been a very disappointing year for Bubs.

Despite all its many product launches, supply deals, and expansions, the company reported a 33% reduction in half year revenue to $18.3 million in February.

This was driven largely by weakness in the daigou channel due to COVID-19 travel restrictions. Though, there are also concerns that Chinese consumers now have a preference for domestic brands and are choosing them ahead of ANZ based options.

And while Bubs points out that it is the fastest growing infant formula manufacturer across the Australian grocery and pharmacy channel, this is from a very small base and comes at a time when the bigger manufacturers are being hit hardest by daigou weakness.

Also weighing on its performance and the Bubs share price was its inventory write off during the first half.

Bubs was forced to write off $3.1 million of inventory during the half. This is the equivalent of 17% of its revenue. And with the daigou channel still under pressure, investors appear concerned that further write offs will have to be made.

Though, as Citi suggested with a2 Milk last week, before that, Bubs may have to discount its product in order to offload it before expiry. This would hurt margins and potentially damage the brand.

Is the weakness in the Bubs share price a buying opportunity?

According to Citi, the Bubs share price could still go lower from here. Its analysts currently have a sell rating and 35 cents price target on its shares.

Based on the latest Bubs share price, this implies potential downside of 18% over the next 12 months.

Citi has concerns over demand and uncertainty relating to its pathway to becoming breakeven at long last.

More reading

• This broker thinks you should buy the Kogan (ASX:KGN) share price dip
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• Why a2 Milk, Centaurus Metals, Kogan, & Youfoodz are sinking today
• Brokers name 3 ASX shares to buy now
• These are the latest ASX shares to be downgraded by brokers today

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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended BUBS AUST 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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When it comes to superannuation, most Australians tend to be pretty happy if their super funds grow at a modest rate, perhaps with some volatility protection as well.

That’s why your average super fund is usually classed as ‘balanced’. This means it invests your money across multiple asset classes to balance between growth potential and volatility protection.

These asset classes usually consist of a mix of ASX shares, international shares, bonds and cash. Since most Aussies tend to be pretty protective over their super funds’ balance, the idea of investing in cryptocurrencies like Bitcoin (CRYPTO: BTC) through super might be unthinkable.

But this idea is reportedly gaining steam.

CEO of BTC Markets, Caroline Bowler, recently told BusinessInsider that she estimates the cryptocurrency exchange now has 5 times as many self-managed super funds (SMSFs) trading on it as during the last cryptocurrency boom in 2017.

“People are looking at it now as something other than as a speculative thing. They’re looking at it as something that’s been around, that’s been tested, that is a genuine investment”, she told BuinsessInsider.

Bitcoin super?

Now, most industry and retail super funds do not let members invest in Bitcoin or any cryptocurrency for that matter. But those restrictions don’t apply to SMSFs.

In fact, according to the Australian Taxation Office (ATO), an SMSF can invest in any ‘collectable or personal use assets’. There are rules around the interpretation of what constitutes a collectable or personal use asset, which you can (and should) read more about.

But these can include anything from gold bullion, artworks and jewellery to wine, boats or vintage cars. And yes, cryptocurrencies like Bitcoin.

So, should you add Bitcoin to your super fund?

Well, it pays to remember that your super fund has the potential to be your biggest asset for retirement outside your family home. As such, you might want to consider the impacts of investing these funds in an asset like Bitcoin.

Cryptocurrencies are some of the wildest and most volatile assets in existence. Remember, Bitcoin has fluctuated between ~US$7,500 a coin and ~US$60,000 a coin in just the past 12 months. And it famously crashed by more than 80% between December 2017 and December 2018.

If you can’t handle that kind of wild ride in your super fund (or indeed out of it), it might not be worth even considering including Bitcoin.

But it’s certainly interesting that some investors are choosing to pursue Bitcoin and other cryptocurrencies with their retirement savings.

More reading

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• Aussie fintech lets ANYONE receive salary in Bitcoin (CRYPTO:BTC)
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• Forget the Bitcoin price, the Dogecoin price is on fire!

Sebastian Bowen owns shares of Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin. 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 S&P/ASX 200 Index (ASX: XJO) fell by 0.2% today to 7,046 points.

Here are some of the highlights from the ASX:

NIB Holdings Limited (ASX: NHF)

The NIB share price went up by around 10% today in response to profit guidance for the rest of FY21.

NIB explained that the COVID-19 pandemic impact on market demand and healthcare treatment were profound and are continuing. However, management said that it’s apparent that the core NIB Australian resident health insurance (ARHI) business is performing well.

At 31 March 2021, total ARHI policyholders had grown to 641,804. Claims experience, especially risk equalisation, continues to be lower than expected.

NIB’s group underlying operating profit (UOP) for the nine months to 31 March 2021 was $140.9 million. The provision for deferred and suspended claims during the pandemic for ARHI was $59 million, compared to $70.7 million for the first half of FY21.

Management said that the extent of the ‘catch up’ in the third quarter in healthcare treatment deferred during the COVID-19 lockdown period appears to be slower than what had been assumed at 31 December 2020.

The “strong” ARHI performance is more than offsetting the COVID-affected international inbound health insurance and travel insurance businesses.

NIB has decided to increase its investment in marketing, growth projects and business transformation because of the ARHI performance.

The ASX 200 health insurance business is now expecting to make UOP of between $200 million to 4225 million for this financial year.

Perenti Global Ltd (ASX: PRN)

The Perenti share price went up by more than 3% today after it said that its subsidiary, the hard-rock underground miner Barminco has received a letter of intent from Newcrest Mining Limited (ASX: NCM) for the development of an underground exploration decline at the Red Chris Project in Canada.

The Red Christ Project is a 70-30 joint venture partnership between Newcrest and Imperial Metals Corporation.

It’s within Tahlton Territory, home to some of Canada’s richest mineral resources in an area known as the Golden Triangle. Barminco has developed a strong relationship with the Tahltan Nation Development Corporation and intends to establish the foundations for an ongoing partnership to create social and economic value for the members of the Tahlton Nation and the region.

Newcrest’s letter of intent is for a scope of works that includes mobilisation and site establishment activities and development of a 3.5km underground exploration decline.

Westpac Banking Corp (ASX: WBC)

The Westpac share price fell 0.2% today after announcing a total $282 million profit hit for its upcoming interim result.

The ASX 200 bank outlined various items that totalled $282 million, some of which were already known.

There were a few items that were above $100 million in size. On the negative side, there was $220 million for additional provisions for customer refunds, payments, associated costs and litigation provisions. There was also $115 million for write-down and of capitalised software and other intangibles as well as $113 million of an accounting loss on the sale of Westpac Pacific, along with transaction costs and payments associated with divestments.

However, these losses were offset by the $288 million positive revaluation of its investment in Coinbase and a $18 million gain on the sale of its Zip Co Ltd (ASX: Z1P) shares.

More reading

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• Is the Commonwealth Bank (ASX:CBA) share price a buy at $90?
• ASX 200 flat: NIB update impresses, Altium upgraded

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The REY Resources Limited (ASX: REY) share price remains flat today despite the company releasing its quarterly activities report, highlighting a new deal with Origin Energy Ltd (ASX: ORG).

The REY Resources share price is 27 cents and hasn’t moved a cent for the past week.

REY Resources is an exploring and developing energy resources company. It operates in two segments, mineral exploration and development and petroleum exploration in Western Australia. REY is currently focused on developing its oil and gas interests in the Canning and Perth Basins.

REY Resources and Origin Energy’s deal

The Fitzroy Blocks are an oil and gas field located in the Canning Basin in the northwest of Western Australia. On 21 December 2020, REY Resources and its fellow Fitzroy Blocks explorers, Buru Energy Limited (ASX: BRU) signed a legally binding letter of agreement with Origin. 

In the agreement, both Buru and Rey will farm out 20% of their respective participating interests to Origin. Origin will need to fully fund several work programs. These include 2D seismic work with total costs of $3 million across the two permits in 2021 and, optionally, one well drilling before 2025.

Subsequently, Origin has been assigned 40% participating interests in the Fitzroy Blocks and the current interests of REY, Buru and Origin in the Fitzroy Blocks are now 20%, 40% and 40% respectively.

REY’s other gas and oil interests

REY still holds a 100% interest in the Lennard Shelf Blocks, although, due to the licence application withdrawn by Buru, REY is now seeking another method for its oil disposal from the region. REY also holds a 100% interest in a petroleum exploration permit in the Derby Block.

REY will also acquire up to 75% equity interest in Australian gas explorers SouthnA, which holds significant interests in the Surat Gas Project, illustrating a busy period for REY Resources and the constantly fluctuating ownership of exploration territory in Western Australia’s mining regions.

REY Resources has relatively high hopes for the Surat Gas Project. Some of the production licences for the project historically had good production history, from five wells in total since the 1980s.

These wells were shut down in 2012, due to the suspension of one gas processing plant. Based on current studies, REY believes that the 3 Avondale wells in and one Deepwater well have good potential for gas production using existing flowlines. Many prospects also have not been tested.

REY Resources share price snapshot

The REY Resources share price has risen 12.5% over the past month and 25% over the past 12 months, beating the overall energy sector by 4%. 

More reading

• Should you invest your super in cryptocurrencies like Bitcoin?
• ASX 200 dips, NIB soars, Perenti rises
• What’s behind the rising BHP (ASX:BHP) share price today?
• Looming grocery price shock to impact on these ASX shares
• Dotz Nano (ASX:DTZ) share price dips on new agreements

Motley Fool contributor Lucas Radbourne-Pugh 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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Shares in BHP Group Ltd (ASX: BHP) and other copper miners have lifted today, alongside rising prices in the red-gold metal.

At the close of trade today, the BHP share price was trading at $47.91, up 0.74%. Rio Tinto Limited (ASX: RIO) ended the day 1.31% higher at $122.74, OZ Minerals Limited (ASX: OZL) finished 0.41% higher at $24.38, and Sandfire Resources Ltd (ASX: SFR) closed 1.14% higher at $6.21.

In comparison, the S&P/ASX 200 Index (ASX: XJO) ended the day 0.2% lower.

Let’s see what factors were driving copper prices – and the BHP share price – higher today.

Copper and BHP share price up

As of writing, copper prices are up 1.16% today to reach a 9-year high of US $4.389 per pound. In comparison, the price of gold is up 0.2% today.

The copper price has risen 8.47% in a month and 86.6% in the past year as demand for copper increases and supply falls. Analysts picked copper’s record-breaking movement just last week.

While not solely focused on the much-used metal, BHP is still the largest copper extractor on the ASX by market capitalisation. Dramatic price movements of any commodity BHP has a material interest in, like copper, will likely affect the BHP share price.

Rising demand

As one of the most widely used metals in industry, copper tends to move in tandem with the global economy. It stands to reason then that as the COVID vaccine continues to be rolled out and expectations for an economic recovery grow, copper prices will continue to rise.

Another reason for copper’s strong growth is the rising demand for renewable energy. Copper is essential, along with lithium and platinum group elements and demand for electric vehicles is expected to grow exponentially into the future. Furthermore, government and industry are increasingly aware of the risks of climate change to both the environment and the economy.

Falling supply

Rising demand is not the only reason for the squeeze on copper prices. Expectations are high that supply will be limited in the near term due to labour disputes in Chile, a major global producer of copper.

BHP operates mines in Chile, and thus the BHP share price could be affected by any fracas in the South American nation.

Reuters reports that Chilean mining unions and dock workers are threatening strike action because of a dispute over pensions. The government wants to limit the amount of money workers can draw from their pension funds to deal with economic hardships after the country was hit hard by the pandemic. 

BHP share price snapshot

Over the past 12 months, the BHP share price has increased 56.8%. It is only slightly down from its all-time high of $50.93 achieved in February this year.

BHP has a market capitalisation of $223.6 billion.

More reading

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Motley Fool contributor Marc Sidarous 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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Consumers should brace for higher grocery prices, but you might be able to hedge against this through some ASX shares.

Experts are warning that you could get a price shock the next time you fill your basket at the local supermarket as a range of soft commodity prices have surged.

These include corn, wheat, soybeans, vegetable oils, reported Bloomberg. This small handful of staples, which form the backbone of much of the world’s diet, have become dramatically more expensive.

Soft commodity prices surge to eight-year high

“This week, the Bloomberg Agriculture Spot Index — which tracks key farm products — surged the most in almost nine years, driven by a rally in crop futures,” reported Bloomberg.

“With global food prices already at the highest since mid-2014, this latest jump is being closely watched because staple crops are a ubiquitous influence on grocery shelves — from bread and pizza dough to meat and even soda.”

Food prices set to rise even further

Cheap lobsters and wine aside, no thanks to belligerent China, food price inflation is probably just around the corner for Aussies.

Higher grocery bills will add to inflationary pressure. This creates a headwind for our economy that’s trying to recover from COVID-19.

“There seems to be sort of a bullish force behind the prices internationally,” Abdolreza Abbassian, senior economist at the United Nations’ Food and Agriculture Organization, said in an interview with Bloomberg.

“The indications are that there is very little reason to believe prices would remain at these levels. It’s more likely they will rise further. Hardship is still ahead.”

ASX shares that benefit from higher commodity prices

But food inflation isn’t all bad news for some ASX shares. In fact, the Graincorp Ltd (ASX: GNC) share price and Elders Ltd (ASX: ELD) share price are direct beneficiaries.

Fertiliser manufacturers like the Nufarm Ltd (ASX: NUF) share price and Incitec Pivot Ltd (ASX: IPL) share price should also find support.

ASX supermarkets could do well too

And if you thought that ASX supermarket shares will be under pressure from higher food costs, think again!

Assuming that they act rationally and pass on these costs to consumers, the higher price at the checkout will make their quarterly sales growth updates a pleasing read for shareholders.

In other words, all things being equal, the Woolworths Group Ltd (ASX: WOW) share price, Coles Group Ltd (ASX: COL) share price and Metcash Limited (ASX: MTS) share price could provide a nice hedge against any price sticker shock!

More reading

• These are the 10 most shorted shares on the ASX
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Motley Fool contributor Brendon Lau owns shares of Elders Limited, Nufarm Limited, and Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Elders 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 Dotz Nano Ltd (ASX: DTZ) share price is slipping today after the company announced new agreements with Zohar Dalia. Shares in the information technology company are down 0.8% at the time of writing, trading at 36 cents.

The tech company operates in anti-counterfeiting, authentication and tracing. It can embed its 4 products – ValiDotz, BioDotz, Fluorensic and InSpec – into plastics, fuels and chemicals. Furthermore, the solutions have application in the oil and gas industry, bio-imaging and liquid tagging.

What’s the deal?

This morning, Dotz Nano told the market it has entered into supply and distribution agreements with Zohar Dalia. The agreements are for antiviral disinfectant with verifiable surface sanitation.

Zohar Dalia is a subsidiary of Israel’s largest manufacturer and supplier of detergent and cleaning products. The supply agreement is that Dotz Nano will supply Zohar Dalia with its nontoxic molecular markers and detectors for Zohar to create a new active surface sanitisation solution.

The distribution agreement will give Zohar the right to sell and advertise the products globally, in approved markets such as the United Kingdom, India, Europe, Australia, and Africa.

Notably, the agreements are not expected to have an immediate material impact on the company’s revenue.

Validation

Despite no material impact on revenue, the company says the deals offer good product validation and follow a successful trial within Tel Aviv Airport where 1000 litres of disinfectant were traced and verified.

Other trials were also undertaken in public areas. As such, the solution has the potential for use across a wide range of spaces including airports, hospitals, hotels and public transport.

Management comments

Dotz Nano chair and interim CEO Bernie Brookes commented on the agreements, saying:

Our supply and distribution agreements with Zohar Dalia further highlight the broad applicability of Dotz’s authentication technology, and the board believes increases our value proposition even further.

It enables us to enter a new sector in several markets with what the board believes to be a superior solution both in terms of effectiveness and the unique ability to verify proper surface sanitation.

About the Dotz Nano share price

While the agreements may not have boosted revenue in the short term, Dotz Nano says they have “significant potential based on the large addressable global market”.

The Dotz Nano share price is up 37% year-to-date and has climbed a massive 792.5% over the past 12 months.

More reading

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• What’s going on with the Nuix (ASX:NXL) share price?
• ASX stock of the day: Talga (ASX:TLG) shares rocket 23%
• Why is the Empire Energy (ASX:EEG) share price sliding today?
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Motley Fool contributor Daniel Ewing 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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ClearVue Technologies Ltd (ASX: CPV) shares were rocketing today after the company announced the completion of another dual listing. By the market’s close, the ClearVue share price was trading at 90.5 cents, 13.13% higher than Friday’s closing price. Earlier in the day, the company’s shares rallied by as much as 18.75% to 95 cents before retreating to their current level. 

From today, ClearVue will be listed on the US-based OTC Market Group Inc.’s OTCQB Venture Market.

ClearVue is a building materials technology company. It works to integrate solar technology into building materials such as glass and facades.

Let’s take a look at what ClearVue announced.

ClearVue’s newest listing 

ClearVue states it has listed on the OTCQB market to allow US- and Canada-based investors more access to the company’s shares. It will also allow these investors to trade ClearVue shares during US trading hours and in US dollars.  

The OTCQB market is the middle tier of the over-the-counter (OTC) marketplace. It’s mostly made up of early-stage and international companies.

An OTC marketplace means there is no broker or exchange in between a seller and a buyer.

There are thorough financial reporting and corporate governance requirements that companies listing on the OTCQB market must adhere to. ClearVue stated it satisfied all of the conditions with its previous ASX compliance.

The ASX will continue to house ClearVue’s primary listing. The company is also listed in Germany on the Frankfurt Stock Exchange, the Stuttgart Stock Exchange and the Berlin Stock Exchange.  

Commentary from management

ClearVue executive chair Victor Rosenberg commented on the company’s new listing, saying:

The Company has a large commercial focus on the key market of the US where we see significantly increased interest in potential sales enquiry activity following the new focus on infrastructure renewal, climate change and renewable solutions under the new administration in Washington.

ClearVue share price snapshot

The ClearVue share price is having a roaring time on the ASX (and its other exchanges) lately, with today’s news just its latest boost.

Currently, the ClearVue share price is up by 206% year to date. It’s also up by 579% over the last 12 months.

The company has a market capitalisation of around $123 million, with approximately 154 million shares outstanding.

More reading

• What’s been happening with ASX renewable energy shares lately?
• Why the ClearVue (ASX:CPV) share price just hit an all-time high
• The ClearVue (ASX:CPV) share price is up 65% in a month. Here’s why

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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Promising young ASX tech company Nuix Ltd (ASX:NXL) has had a rocky start to life on the share market. After first listing on the ASX in early December, its share price soared as high as $11.855, before plunging more than 60% to a low of just $4.20. And even after a modest recovery more recently, its shares are down another 3% today and are currently trading at only $4.47.

Let’s first take a look at what Nuix does, and then investigate the reasons for the massive decline in its share price.

Company background

Nuix is a data analytics company. Its software is designed to help its clients sift through massive amounts of data – including things like social media posts and emails – to deliver insights and actionable solutions. For example, the company’s digital forensics software has been able to help police in Scotland investigate complex fraud cases. In some instances, Nuix was even able to help police cut down the investigation time from years to a matter of months.

Recent announcements

The Nuix share price really went south after the release of the company’s first-half FY21 results. Revenues declined by 4% year-on-year (to $85.3 million), while net profit after tax (NPAT) came in at $9.5 million.

It wasn’t a terrible result for a junior tech company, but it fell short of its own expectations. First half revenues only made up 44% of the company’s full year forecast, while NPAT was 48%. This result underwhelmed investors, and left Nuix with plenty of ground to make up over the second half of the year if it planned to hit its performance targets.

Then, last week, we found out that even Nuix no longer believed it could hit those targets. The company released an updated forecast for FY21, in which it downgraded its full-year revenue target from $193.5 million to between $180 million and $185 million. It also stated that it now expected annualised contract value (ACV) to be between $168 million to $177 million (well below its prospectus forecast of $199.6 million).

Nuix blamed the downgrade on customers switching from “module-based subscription licenses to consumption and Saas [software as a service] license models, resulting in a shift in both revenue and ACV profiles.” While this has had a negative impact on the company’s short-term revenues, Nuix stated that it does not “diminish Nuix’s growth prospects which remain strong, as evidenced by ongoing increases in new customer acquisition and retention.”

There may be some evidence to support this assertion, with the company adding more customers in the nine months ending 31 March 2021 than it had done over the prior comparative period. Nuix has also entered into a number of longer-term (2 to 5-year) contracts with major customers, including a top US law firm and a French financial services company.

Where next for the Nuix share price?

It’s hard to say what will happen to the Nuix share price over the short to medium-term. Unfortunately for Nuix, it has made the mistake of disappointing the market in one of its first financial announcements since listing on the ASX.

The release of the FY21 revenue downgrade – no matter the underlying cause – hasn’t done the company any favours either. It means that the second half of FY21 may well turn out to be a crucial period for the Nuix share price as the company tries to regain some investor trust.

More reading

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Rhys Brock owns shares of Nuix Pty Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty 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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