The Global Health Limited (ASX: GLH) share price is on the rise today after the company released a positive announcement regarding a significant contract win. In early morning trade, shares in the digital health company were down 6.5% to 35.5 cents before the Global Health share price rallied to its current level of 40 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.16% to 6,586.30 points.

What’s moving the Global Health share price?

The Global Health share price is on the move today after the company reported it has signed an important contract with Butterfly Residential Care. The new deal will see both companies integrate a client management system that focuses on dealing with mental health issues.

Butterfly Foundation is the national organisation for people living with eating disorders and body image issues. The organisation’s mission is to change lives by providing evidence-based support services, as well as delivering prevention and early intervention programs.

Backed by the federal government, Butterfly established a subsidiary called Wandi Nerida which is operated by Butterfly Residential Care. Located on Queensland’s Sunshine Coast, Wandi Nerida is Australia’s first, community-based residential facility for eating disorders.

The state-of-the-art, purpose-built facility will house 13 beds and provide a phased treatment structure to address mental illness. Providing the company is able to secure enough funds, the clinic is expected to open in mid-2021.

The integrated client management contract is worth in excess of $122,000 to Global Health for the initial 12 months. The agreement will feature a portfolio of Global Health products such as its MasterCare services, ReferralNet program, and HotHealth Virtual Care platform.

What did management say?

Wandi Nerida Executive Director, Ms Jodie Ashworth, spoke about the new partnership. She said:

Butterfly Foundation has partnered with Global Health to provide an EMR and PAS solution for Wandi Nerida, Australia’s first residential eating disorder facility. Global Health maintained a high focus on customer service and adaptability throughout the selection process. Their experience with ICT solutions for mental health services made them a clear choice for developing innovative solutions for leading edge health providers.

Adding to Ms Ashworth’s comments, Global Health Managing Director, Mr Matthew Cherian said:

Our team acutely understand what is happening in the mental health space in Australia, having developed the IT services to assist and recognise the importance of this initiative. We are strongly committed to supporting the Wandi Nerida facility to become the benchmark and ultimately viewed as the best practice model in dealing with the specific needs of people living with an eating disorder.

More reading

• Global Health (ASX:GLH) rockets 20% higher on business update
• Global Health (ASX:GLH) share price catches a rocket, up 74%

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been another very positive day of trade for the S&P/ASX 200 Index (ASX: XJO) on Tuesday. In late morning trade, positive vaccine news has helped drive the benchmark index 1.35% higher to 6,377.9 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are crashing lower:

Coles Group Ltd (ASX: COL)

The Coles share price is down almost 5% to $17.81. Investors have been selling the supermarket giant’s shares today amid news that there could be an effective COVID-19 vaccine released before the end of the year. While this is good news for the global economy, life getting back to normal would likely lead to the softening of supermarket sales.

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price has fallen 4% to $2.07 following the release of its full year results. In FY 2020, the agricultural chemicals company posted a 19% decline in net profit after tax to $123.4 million. However, this was driven by individually material items (IMIs) of $65 million. These relate to the write down of obsolete technology and the implementation costs for its Response Plan. Excluding these IMIs, Incitec Pivot’s profit would have been up 23% year on year.

Kogan.com Ltd (ASX: KGN)

The Kogan share price has crashed 10% lower to $21.48. Investors have been rotating out of COVID-winners and into shares which have underperformed during the pandemic. This has led to significant weakness in the tech sector and particularly with ecommerce companies.  

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price has sunk 12% lower to $14.83. This follows a sharp pullback in the gold price overnight due to the COVID-19 vaccine news. It isn’t just Northern Star that is under pressure today. The S&P/ASX All Ordinaries Gold index is down a massive 8.5% at the time of writing. Safe haven assets have suddenly lost their allure with investors as risk appetite increases.

More reading

• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• The 5 best-performing ASX 200 shares so far this year
• 5 things to watch on the ASX 200 on Tuesday
• Here’s why ASX gold shares are surging today
• Why big brokers are bullish about the Woolworths (ASX: WOW) share price 

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 Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It is extremely difficult to predict when the next stock market crash will occur. However, history suggests that it is only a matter of time before investor sentiment declines and equity markets come under pressure.

Of course, stock market declines can provide buying opportunities. By taking a long-term view and purchasing a diverse range of companies with wide economic moats, it may be possible to capitalise on a likely recovery.

Taking a long-term view during a stock market crash

While a stock market crash is very likely to take place at some point in future, it is also equally likely to ultimately give way to a bull market. After all, indexes such as the FTSE 100 Index (FTSE: UKX) and S&P 500 Index (INDEXSP: .INX) have always experienced bull markets following their various bear markets.

As such, it may be beneficial for an investor to take a long-term view of a market decline. In other words, falling share prices are very unlikely to last in perpetuity. Therefore, there could be buying opportunities on offer that deliver impressive returns in the long run.

Clearly, looking beyond the short term is difficult during a stock market crash. Many investors panic. This could lead them to sell holdings and, in doing so, influence their peers to do likewise. However, by ignoring the views of other investors and instead focusing on the long-term recovery potential for stocks, an investor may be able to more successfully navigate a market decline.

Buying companies with wide economic moats

Of course, some companies may not recover from a stock market crash. For example, they may have weak balance sheets that cause financial difficulties in a period of more challenging economic performance. Similarly, companies that lack a competitive advantage may struggle to deliver impressive profit growth compared to their sector peers.

Therefore, buying companies with wide economic moats could be a shrewd move. They may feel the negative impacts of a period of economic weakness to a lesser extent than their peers. This may be due to lower costs, brand loyalty or a unique product, for example. Those same attributes may also lead to stronger financial performance in the long run that translates into a relatively sound share price outlook.

Diversifying in a market downturn

Buying a wide range of companies in a stock market crash could help to reduce overall risks. After all, it is unclear which sectors and regions will recover at the fastest pace.

By having a broad spread of companies within a portfolio, an investor can reduce their reliance on a small number of holdings for their returns. They may also be able to access a broader range of growth opportunities than would be possible in a concentrated portfolio. This may improve their growth prospects as the stock market recovers.

More reading

• Why the Redbubble (ASX:RBL) share price has crashed 20% lower today
• Oyster supplier East 33 (ASX:E33) sets out to make a splash on ASX debut
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Why the LiveTiles (ASX:LVT) share price is jumping 6% higher today
• AUB Group (ASX:AUB) share price higher after upgrade for FY21

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The market may be flying higher on Tuesday but the same cannot be said for the Redbubble Ltd (ASX: RBL) share price.

In morning trade the ecommerce company’s shares are down a massive 20% to $3.95.

Why is the Redbubble share price crashing lower?

On Tuesday investors have been selling the shares of companies that have been COVID-winners and switching into COVID-losers following the announcement of a potentially effective COVID-19 vaccine by Pfizer.

Overnight Pfizer announced the first set of results from its phase 3 COVID-19 vaccine trial, which provided the first evidence of its vaccine’s ability to prevent COVID-19 infections.

According to the release, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.

This is significantly better than expected and could mean a return to normality sooner than hoped.

“Today is a great day for science and humanity,” said Dr. Albert Bourla, Pfizer Chairman and CEO. I’m sure most readers would agree with this statement.

What else is happening?

It isn’t just Redbubble that is under pressure. Fellow ecommerce companies Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) have also fallen very heavily during morning trade.

At the time of writing, the Kogan share price is down 10% and the Temple & Webster share price is down 20%.

Other COVID-winners such as Afterpay Limited (ASX: APT), Ansell Limited (ASX: ANN), Domino’s Pizza Enterprises Ltd (ASX: DMP) and NEXTDC Ltd (ASX: NXT) are also tumbling notably lower on Tuesday.

COVID-losers rebound.

Money is piling into a large number of companies that have struggled through the pandemic, sending their shares hurtling higher today.

For example, COVID-losers such as Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), Scentre Group (ASX: SCG), and Sydney Airport Holdings Pty Ltd (ASX: SYD) have also recorded double digit gains today at the expense of Redbubble and co.

More reading

• The 5 best-performing ASX 200 shares so far this year
• 2 ASX shares that are growing profit very fast
• I plan to invest heavily in ASX shares next week
• 3 ASX shares you’ll regret not buying during this correction
• Why Redbubble, Kogan, Marley Spoon and 1 other ASX share are surging

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, Flight Centre Travel Group Limited, Kogan.com ltd, and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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East 33 Limited (ASX: E33) is an aquaculture company specialising in oyster production and supply. The company is aiming to get listed on the ASX (indicative date 3 December 2020) and opened its IPO on 23 October. It is setting out to raise $32 million through the issue of 160 million new shares at 20 cents per share.

A closer look at East 33

East 33 was formed to acquire and operate a portfolio of long-existing oyster farms and distributors, with the goal of creating Australia’s largest vertically integrated group of Sydney rock oyster producers, suppliers and exporters. According to East 33’s prospectus, it will control approximately 9% of Sydney rock oyster production and 25% of industry distribution.

There are two stages to East 33’s acquisition strategy. The first stage was completed in December 2019, with 4 assets acquired. The second stage is the acquisition of another 6 assets, which will be carried out as a condition to the company listing on the ASX.

A key feature of its acquisition model is the continued participation of the oysterfarm operators in the new company. Many of these operators are families that have been involved in the industry for generations.

It also aims to create an ‘iconic’ Australian export by taking the Sydney rock oyster to the world. In a press release announcing the IPO, East 33’s co-founder and executive chair James Garton said:

We are proud to be part of the transformation of the Sydney Rock Oyster industry. This unique oyster has been enjoyed in Australia for more than 150 years and we look forward to deploying the skills of our farmers to showcase it to the world. The Sydney Rock Oyster should be our native version of French Champagne or Beluga Caviar.

East 33’s financial performance

Let’s look at East 33’s profit as of June 2020: 

	FY18 Audited ($m)	Change in %	FY19 Audited ($m)	Change in %	FY20 Audited ($m)
Gross revenue	18.96	34.39%	25.48	5.18%	26.80
Cost of Sales	-10.40	34.52%	-13.99	-8.90%	-12.84
Gross Profit	8.56	34.23%	11.49	21.49%	13.96

Table: author’s own. Data Source: East 33 Prospectus

East 33’s cost of sales dropped 8.9% in 2020. Management attributes this cost reduction to the aggregation of oyster farms, which has reduced production and transportation costs.

At the same time, East 33 is looking to increase its sales. Amongst all sales channels, distributing to local restaurants and international exports (to Japan, China and Singapore) took up 15% of the company’s profit in 2020. The two segments also had the highest mark up price of 376% and 3.25%, respectively, compared to other parts of the value chain, according to the company’s prospectus.

East 33’s financing strategy

In conjunction with the equity raised, East 33 will receive debt financing to a value of $10 million. The company has advised the proceeds will be used for the following:

• $27.1 million to fund the cash component of the consideration for acquisitions
• $4.4 million to fund its growth capital expenditure
• $1.6 million to fund its marketing and branding activities
• $5.7 million to fund its administrative costs and working capital
• $3.2 million to pay costs and expenses arising in connection with the offer and the other related transaction costs

East 33 will use more than 60% of the funds raised to fund acquisitions of oyster farms and distributors.

In addition to the funding strategy, East 33 will appoint two directors who have international brand experience gained through luxury goods group LVMH and China’s largest privately-owned integrated aquatic port. The company expects these new hires to help increase East 33’s capability to penetrate the high-end consumer market in Asia. 

East 33’s IPO is due to close on 16 November, in view of a 3 December listing under the ticker E33.

More reading

• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Why the LiveTiles (ASX:LVT) share price is jumping 6% higher today
• AUB Group (ASX:AUB) share price higher after upgrade for FY21
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• Pushpay (ASX:PPH) investor day presentation: any updates to recover its share price?

Motley Fool contributor MWUaus has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The OFX Group Ltd Fully Paid Ord. Shrs (ASX: OFX) share price wasn’t invited to the morning rally after it posted its profit results.

But it may not only be earnings news that’s holding back the stock as the S&P/ASX 200 Index (Index:^AXJO) jumped by around 2%.

Hopes that a COVID‐19 vaccine is just around the corner is fuelling today’s bull run. This means the ASX stocks that benefitted the most from the pandemic are copping the biggest hit and vice-versa.

ASX tech stocks on the nose

This explains why the Afterpay Ltd (ASX: APT) share price and Kogan.com Ltd (ASX: KGN) share price are among the biggest losers at the time of writing.

Some of the negativity towards tech and online stocks may be casting a shadow over the OFX share price, which fell 2.7% to $1.29.

OFX share price dragged by big profit and dividend hit

The fintech’s half year result didn’t help either with management posting a near two-thirds crash in underlying net profit to $2.9 million.

The foreign exchange platform certainly wasn’t much of a winner from COVID-19. Management blamed a sharp drop in transactions in February and March when the pandemic hit for the dismal result.

The drop in earnings forced OFX to slice its interim dividend to $0.81 from the $2.35 a share it paid this time last year.

Silver-lining for the OFX share price

The weakness is largely driven by its consumer business, although its B2B transactions held up better.

The number of new corporate clients improved 10.6%, while revenue from online sellers outside of Asia surged 52% in the half.

This helped support turnover, which dipped 2.7% to $11.2 billion in the six months to end of September this year.

Is the outlook for OFX improving?

Management also told the market that it thinks the worst is over. It noted that transactions bounced by 10.1% across all its business segments in the second quarter of FY21.

OFX attributed the recovery to “a sustainable business model and good execution of its strategy”.

It’s also counting on its new strategic partnership with WiseTech Global Ltd (ASX: WTC) to contribute to future growth.

Lack of guidance will weigh

The reassurances would have meant more if not for the fact that OFX shied away from providing any guidance.

“With the near-term revenue outlook difficult to predict and continued sensible investment in our growth engines, as previously indicated we will not be targeting positive operating leverage for FY21,” said OFX’s chief executive Skander Malcolm.

“That said, we continue to see a good recovery in trading underpinned by strong cash flows, while our growth investments position us well going forward.”

More reading

• Markets volatile on US presidential election results
• The 5 best-performing ASX 200 shares so far this year
• ASX 200 hits 8-month high. Here’s why we could go higher from here
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• 5 things to watch on the ASX 200 on Tuesday

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The LiveTiles Ltd (ASX: LVT) share price is pushing higher on Tuesday after announcing the launch of a new product.

In morning trade the intranet and workplace technology software provider’s shares are up 6% to 25 cents.

What did LiveTiles announce?

This morning the company announced the launch of a new artificial intelligence (AI) product, LiveTiles Vibe.

Management believes that LiveTiles Vibe is an important development, complementing its existing suite of products and addressing a crucial capability in the evolving digital workplace.

It is a user engagement engine, designed to capture feedback from users quickly and easily, and to leverage this feedback to help drive critical business decision making across any topic of importance to the company or team.

It believes the launch will help drive significant customer pipeline, and complete another step in LiveTiles realising its vision for the Intelligent Workplace.

What now?

The company intends to drive co‐marketing and co‐selling of LiveTiles Vibe through existing key partners, notably Microsoft and its partner ecosystem.

It believes the product has a very strong roadmap which will see it evolve quickly over the next 12 months and build upon its current features to make LiveTiles Vibe a critical piece of the digital workplace.

The first market that the company will be targeting is the digital wellbeing market. It notes that employee wellbeing has been identified as one of the top strategic priorities across executive teams globally.

So much so, the Global Wellness Institute (GWI) estimated pre‐COVID‐19 that the global workplace wellness market was projected to grow from US$48 billion in 2017 to US$66 billion in 2022.

However, LiveTiles Vibe will be provided to the market for free initially to rapidly drive a large user base.

LiveTiles Co‐Founder and Chief Executive Officer Karl Redenbach, commented: “It became clear from our discussions with clients that COVID‐19 has fundamentally changed the dynamics of critical business decision making and that a user engagement engine powered by artificial intelligence was sorely needed. LiveTiles Vibe adds to our vision of the digital workplace at a time when our digital workplaces have changed forever.”

“Our vision for LiveTiles Vibe is to help our clients understand their people without adding to their chaotic COVID‐19 remote working lives. Imagine you are doing a critical task. Vibes will appear in that app as a question. You answer that question without leaving that app, it then disappears, and you get back to working at your priority tasks,” he concluded.

More reading

• The LiveTiles (ASX:LVT) share price is falling today. Here’s why.
• Why Afterpay, LiveTiles, PointsBet, & Santos shares are tumbling lower
• Why the Livetiles (ASX:LVT) share price has rocketed up 11% today
• Why the LiveTiles (ASX:LVT) share price is tumbling lower 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 LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Insurance broker AUB Group Ltd (ASX: AUB) has announced some positive metrics and an upgrade on its FY21 guidance at today’s annual general meeting (AGM). The AUB Group share price rose by 1.25% to $17.94 in early morning trading today amid a broader market rise. 

What does AUB Group do?

AUB Group is an insurance broker servicing more than one million client policies and 93 partner businesses across more than 600 locations in Australasia. Combined, the company covers more than $3.2 billion in policy premium. The company has three main business lines – broking service, underwriting, and workplace risk management services.

Main highlights from today’s AGM

AUB Group reported some positive metrics for FY2020, as well as an upgrade on its guidance for FY21.

Here are the main headline results highlighted from today’s meeting:

• Underlying net profit before tax (NPAT) of $53.4 million, up 15.2% from FY19
• This is on the back of a strong underlying revenue of $578 million, a 6.8% increase
• Underlying earnings before interest (EBIT) margin 28.5%, up by 160bps
• Operating cash flow increased from $17 million to $36 million
• A final fully franked dividend of 35.5 cents per share was paid on 6 October 2020. 

In addition, the company also reported that its acquisition of a 40% stake in BizCover was performing in line with expectations, and that Bizcover added $1.8 million to its NPAT figure. This acquisition has expanded AUB’s market share across its network.

Upgrade on FY21 guidance

After the strong full year performance and first quarter of FY21, the company has today issued an upgrade on its FY21 outlook. The company says that the underlying NPAT for FY21 will be in the range of $60–$62 million – this represents an upgrade from 25 August guidance of $58.5–$61 million. This new estimate represents growth of 12.3% to 16.1% over FY20.

AUB notes however that “in providing this upgraded guidance, we realise macro conditions remain volatile and uncertain and that it is relatively early in the financial year .”

How AUB Group share price has performed in 2020

The AUB Group share price has increased by more than 50% in 2020. At today’s price of $18.02, the company commands a market capitalisation of $1.3 billion. 

More reading

• 2 ASX shares that could double your money in 5 years

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Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares have been very strong performers in early trade on Tuesday.

At the time of writing the Flight Centre share price is up 14% to $16.41 and the Webjet share price is up 16% to $4.98.

Why are Flight Centre and Webjet shares zooming higher today?

This morning Australian travel companies woke up to the news they’ve been waiting a long time to hear – an effective COVID-19 vaccine appears to have been developed.

Overnight, US biotech giant Pfizer released the first set of results from its phase 3 COVID-19 vaccine trial. Those results provided the initial evidence of its vaccine’s ability to prevent COVID-19.

According to the release, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.

This is a very big deal, especially given how even Pfizer felt 60% to 70% effectiveness would be a decent result.

While there is still more data to be collected and safety milestones to be achieved, if everything goes to plan the vaccine could be rolled out before the end of the year.

Pfizer advised that, based on current projections, it expects to produce globally up to 50 million vaccine doses in 2020 and then up to 1.3 billion doses in 2021. The Australian government has previously secured 10 million doses of the vaccine.

If the vaccine is developed and rolled out successfully globally, it could mean a much swifter rebound in the travel market than many had even dreamed of.

This would be great news for Flight Centre and Webjet. Both companies are burning through large amounts of cash at present as travel booking volumes sit at just a fraction of pre COVID levels.

More reading

• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• 5 ASX 200 shares that rose by more than 15% last week
• ASX 200 Weekly Wrap: US election special
• These are the 10 most shorted shares on the ASX
• These were the best performing ASX 200 shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Pushpay Holdings Ltd (ASX: PPH) share price slumped 13% on Wednesday last week following its interim report. Today, Pushpay announces its 2020 investor day presentation. Are there any updates that could help its share price recovery after last week’s fall? 

Interim results 

The Pushpay share price took a turn for worse following its interim results on 4 November. The 13% slump was on the highest single day trading volume its shares had seen in more than two years. 

Surprisingly, the interim results read well with growth across all financial and operational metrics. It is possible the market expected even better results considering Pushpay’s 100% share price run this year and 230% increase since March lows. 

The Pushpay business is making significant strides to profitability with expanding margins and operating cash flow improvements over the period. Revenues for the six months ended 30 September 2020 increased by 53% to US$29.6 million. It expects to see continued revenue growth as the business executes its strategy, achieves increased efficiencies and gains further market share in the US faith sector. 

The company’s efficiencies saw a 3 percentage point increase in gross margins from 65% to 68%. This trickled down to expanding operating leverage with total operating expenses improving by 12 percentage points from 50% to 38%. The company expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remain low. 

In recent quarters, the company has made significant strides to profitability with earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) soaring 177% to US$17.1 million and NPAT increasing 107% to US$6.9 million. 

The company upgraded its EBITDAF guidance for the year to between US$54.0 million and US$58.0 million, although uncertainties and impacts surrounding COVID-19 and the broader US economy economic environment remain. In the long-term, Pushpay is targeting more than 50% of the medium and large church segments, an opportunity that represents more than US$1 billion in annual revenue.  

Investor day updates 

The investor day presentation largely reiterated the company’s financial achievements to date including the interim results above. It also highlights the significant uncertainties in forecasts for the US economy, with significant disparities in baseline, relief bill to rescue and no end in sight scenarios. 

In September 2020, the company also announced its largest product launch to date, which included 16 new products, features and enhancements to the Pushpay and Church Community Builder solutions. The launch unveiled the new product name of the Company’s all-in-one engagement solution, ChurchStaq. The investor presentation included a product demo of the complete engagement software. 

The investor day presentation did not reveal any new financial market sensitive information. However, the US market experienced a significant run up overnight which is likely to positively influence the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) on Tuesday. 

More reading

• 3 mid-cap ASX shares with recent price pullbacks
• 3 great ASX tech shares to buy
• Top brokers name 3 ASX shares to buy today
• Why the Pushpay (ASX:PPH) share price could be a growth opportunity
• ASX 200 ends mixed on Wednesday

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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