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Audio Pixels Holdings Ltd (ASX: AKP) shares are plunging today after the company released its quarterly update for the period ending 31 March. At the time of writing, the Audio Pixels share price is down 10.57% to $23.10.

Let’s take a look at how the digital loudspeaker company has been performing.

Quarterly performance

According to its release, Audio Pixels’ main focus for the period has been an “intensive effort” to combine the company’s accomplishments into working devices that can serve as product demonstrators as well as engineering samples for select customers. The primary highlight of the period was the successful sampling of playing chips and multi-chip boards outside of its cleanroom.

However, Audio Pixels has been contending with widespread disruptions throughout the global semiconductor supply chain. Global shortages for the in-demand silicone chips – that are used for virtually all electronics these days – are hitting the company, but these aren’t its only problem.

The company advised the impact of supply shortages on its production has so far been manageable, but “the adverse effect on the packaging of our chips has been dramatic”. Audio Pixels has partnered with a “world-leading” specialty chip packaging company and has “spent over five years developing and perfecting an automated packaging process for our chips”.

But unprecedented production demands on the company’s partner have prevented it from making use of this packaging line.

Background

Audio Pixels is an Australian listed company that has 100% ownership of an Israel-based company, Audio Pixels Limited. The company is focused on the development of an “entirely new generation” of digital loudspeakers. Audio Pixels’ patented technology aims to radically improve the design and performance of speakers by generating sound waves from audio streams through the use of microelectromechanical structures (MEMS).

Founded in 2006, the company is striving to produce high-quality sound production via single silicon chips that can be licensed and/or sold as stand-alone speakers or collectively incorporated into a range of electronic devices as required. According to Audio Pixels, the company is actively engaging with leading consumer electronics manufacturers regarding the development of its technology.

Whilst Audio Pixels’ product is still under development, the company believes market research points to significant demand for real innovation in audio speakers to bring them in line with current device trends.

Audio Pixels share price snapshot

Audio Pixels shares listed on the ASX in 2004. After remaining relatively flat for its first few years of trade, the Audio Pixels share price began really taking off in late 2010. It continued to trend upwards from then, reaching nearly $33 in July 2016. Since then, the company’s share price has been volatile, trading as low as $8.69 in March 2020 and as high as $28 in September 2020.

The Audio Pixels share price had been mostly stable in 2021 until this month, when it has continued to fall dramatically. It has now lost around $5 this month alone, an 18.7% decline. It’s still up by around 60% over the past 12 months, however. 

More reading

• Why is the Anteris (ASX:AVR) share price surging today?
• Why the Atlas Arteria (ASX:ALX) share price is sliding today
• ASX stock of the day: MSL Solutions (ASX:MSL) shares rise 20%
• Why is the Grange Resources (ASX:GRR) share price rising today?
• ASX bank shares best placed to ride the $1bn+ provisioning profit boost this reporting season

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 MSL Solutions Ltd (ASX: MSL) share price is one of the better performers on the ASX today. At the time of writing, MSL shares are up an impressive 19.23% to 16 cents a share. MSL closed at 13 cents a share yesterday and opened at 14 cents this morning before rocketing as high as 20 cents in early trade. That’s a gain of more than 50%. Of course, MSL has cooled off somewhat since, but 20% is still 20%.

Today’s moves are only the latest bit of good news for MSL Solutions shareholders. On the current pricing, the company is now up 32% since last Wednesday, and 128.5% since November last year.

But who is MSL Solutions? And why are MSL shares rocketing so dramatically today?

Who is MSL?

MSL is a tech company that uses a software-as-a-service (SaaS) platform to provide services to the entertainment, sporting and hospitality sectors. Its software systems allow businesses to ‘connect’ to their customers through entry and exit monitoring, ordering facilities, promotions and end-to-end point of sale payment solutions. It also allows businesses to integrate their own internal operations, facilitating data sharing between ‘front of house’ and ‘back of house’ operations. It also provides “actionable insights on key success metrics to venues of all sizes”.

MSL Solutions currently works with over 5,000 customers, which include names like Golf Australia, the Queensland Cricketers’ Club and the Parramatta Eels NRL team.

Last year, the company signed an agreement with buy now, pay later provider Openpay Group Ltd (ASX: OPY). This agreement allowed customers to use Openpay when buying some products from MSL.

Why is the MSL Solutions share price rising today?

We have seen two major announcements from MSL Solutions over the past 2 days that are likely to be the pricing catalysts behind MSL’s gains today.

Firstly, MSL told the markets yesterday that it has signed a ~$3.5 million, 5-year agreement with the American company ASM Global to provide point of sales payment solutions. This agreement covers 22 “large event venues”, including arenas and racetracks, in the United Kingdom which are operated by ASM. It will see ASM install ~900 terminals that will run MSL software. MSL is set to “ earn a combination of upfront software, hardware and services revenue plus annual support revenue over the initial 5–year term”.

Secondly, MSL Solutions released a business update covering the quarter ending 31 March 2021 this morning. In this update, MSL reported its third consecutive quarter of positive operating cash flow. It also saw net cash from operations rise from virtually zero to $1.3 million year on year. MSL tells us that it is on track to record a full year of consistent cash generation from operations, which would be its first since FY2018. The company also reported that it has $4 million in cash on hand as well.

Judging by the MSL share price performance today, and over the past week, investors are clearly liking what they are seeing with the company. At the current share price, MSL Solutions has a market capitalisation of $52.24 million.

More reading

• Why is the Anteris (ASX:AVR) share price surging today?
• Why the Atlas Arteria (ASX:ALX) share price is sliding today
• Why is the Audio Pixels (ASX:AKP) share price falling 11% today?
• Why is the Grange Resources (ASX:GRR) share price rising today?
• ASX bank shares best placed to ride the $1bn+ provisioning profit boost this reporting season

Motley Fool contributor Sebastian Bowen 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 Grange Resources Limited (ASX:GRR) share price is rising today after the company released its quarterly activities report, outlining increased production and sale prices.

At the time of writing, the Grange Resources share price is up 5% to 63 cents per share.

Grange Resources is an Australian-based international iron-ore miner that also has a side hustle in building real estate.

It’s primarily engaged in the exploration, evaluation, and development of mineral resources and iron ore mining operations. Grange Resources’ projects include the Southdown Magnetite and associated Pellet Plant Projects.

The group has two reportable segments. Firstly, the exploration, evaluation, and development of mineral resources and iron ore mining operations. Secondly, the development and construction of housing units.

The company generates the majority of the revenue from the sales of iron ore products in China. Followed by Japan, Australia, and Korea.

Grange Resources’ recent results

The Grange Resources share price is responding to mixed but ultimately positive results in the company’s last quarter. Its pellet production increased for the quarter with 616 kilotonnes, compared to 479 kilotonnes for the December quarter. This is due to the company’s pre-planned major shutdown for the installation of a steel pan conveyor in the previous quarter.

Pellet sales decreased for the quarter to 556 kilotonnes, compared with 754 kilotonnes for the December quarter. However, there was an increase in average received prices for the quarter to $297.66 per tonne. This is was up compared with $236.77 per tonne for the December quarter.

Grange Resources’ unit cash operating cost also increased for the quarter to $113.11 per tonne. Compared with $101.13 per tonne for the December quarter. It has cash and liquid investments of $258.64 million and trade receivables of $73.38 million compared with cash and liquid investments of $202.93 million. Additionally, the company has trade receivables of $79.32 million for the December quarter.

The company has spent outlays of approximately $11.5 million in the quarter on capital projects. These are mainly focused on plant and processing equipment. 

Grange Resources management 

Grange Resources CEO Honglin Zhao was pleased with the company’s results.

The efforts of the Team have been supported by very strong prices in the market, resulting in a strong first quarter of 2021. The Team continues to focus on optimising the life-of-mine plan at Savage River and assessing the strategic and technical studies of its open pit, underground, and Southdown projects.

Grange Resources share price snapshot

The Grange Resources share price has more than doubled since December 2020, and is currently trading 10% higher than a week ago, 27% higher in the past month, and 202% higher than 12 months ago.

More reading

• ASX bank shares best placed to ride the $1bn+ provisioning profit boost this reporting season
• Why the Universal Store (ASX:UNI) share price is up 8% to a record high
• Peter Warren Automotive (ASX:PWR) share price jumps 20% after IPO
• Here’s why the BetMakers (ASX:BET) share price is in the red today
• Province Resources (ASX:PRL) share price rises on acquisition update

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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Expectations are building ahead of the ASX bank reporting season and experts are predicting that the sector will get a $1 billion plus earnings injection on top of operating profit growth.

The extra profit boost comes courtesy of the great COVID-19 unwind. While ASX bank shares had to cut profits to build a cash buffer during the pandemic, they are expected to return a chunk of this back to their bottom lines now.

This places the ASX bank shares in a good position to report higher profits and dividends over the coming few reporting seasons.

ASX banks getting a free ~$1.6 billion profit kick

The extra cash buffer, called provisions, was meant to protect banks’ balance sheet from a potential wave of loan delinquencies.

This never materialised during the COVID outbreak thanks to massive government and central bank support.

While most of us know this, the analysts at Macquarie Group Ltd (ASX: MQG) believes the market is underestimating the upside.

The broker is forecasting around a $1.1 billion to $1.6 billion release in provisions for ASX banks.

ASX banks still on an earnings upgrade cycle

“Only a year ago, we were examining the extent of potential credit losses, and now the focus has shifted to how low bad debts are likely to go,” said Macquarie.

“With very little stress in the system, courtesy of highly accommodating policies and support measures, we continue to see upside risk to consensus expectations from a further reduction in BDD [bad and doubtful debt] charges.”

The strong housing market and robust rebound in the Australian economy means that provisions can stay lower for longer. That puts extra money in banks’ pockets, which can be used to pay dividends.

The ASX banks best placed to benefit

We may be entering a period where loan losses will track below the average in any given cycle thanks to the upswing.

In this regard, Macquarie is forecasting ASX banks to report credit charges of just 10 to 13 basis points a year for the next three years. In contrast, the five-year average is around 11 to 21 basis points.

This means further ASX bank profit upgrades could be on the cards.

However, some ASX banks will benefit more than others. The broker noted underlying loan losses relative to the mid-cycle are lower in recent years for National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) than for Australia and New Zealand Banking GrpLtd (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA).

Upgrade cycle coming to an end?

Macquarie has upgraded its earnings forecast for ASX banks by between 1% and 5%. It doesn’t sound much, but the broker has already upgraded the sector four other times this year alone.

The total earnings upgrade runs to around 15% to 25% and there could be more consensus upgrades coming.

The only thing is we are probably at the tail end of the ASX bank profit upgrade cycle, noted Macquarie.

While the easy money has been made, it’s still too early to be trying to pick ASX banks’ share price peak – not when the tailwinds are still blowing strong.

More reading

• Leading brokers name 3 ASX shares to sell today
• ASX 200 dips, NIB soars, Perenti rises
• What could APRA’s climate guidance mean for ASX bank shares?
• Is the Commonwealth Bank (ASX:CBA) share price a buy at $90?
• Westpac (ASX:WBC) share price higher despite $282 million profit hit

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. 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 Universal Store Holdings Ltd (ASX: UNI) share price has continued its incredible run on Tuesday.

In early afternoon trade, the fashion retailer’s shares are up 8.5% to a record high of $7.64.

This means the Universal Store share price is now up 38% year to date and 100% from its November IPO listing price of $3.80.

Why is the Universal Store share price rocketing higher?

Investors have been buying the company’s shares since its listing due to its exceptionally strong performance during the first half of FY 2021.

For the six months ended 31 December, Universal Store reported a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million.

This was driven by like for like store sales growth of 19.1% and a 128.3% jump in online sales, which offset store closures in Melbourne between August and October.

Why are its shares charging higher today?

The catalyst for the rise in the Universal Store share price today was the release of a trading update this morning.

Pleasingly, that update reveals that its performance has strengthened since the end of the first half.

According to the release, the company has experienced excellent sales performance across its stores and online business, with third quarter headline sales growth of 39.6% and comparative growth of 37.3%.

This comprises like for like store sales growth of 27.5% and online sales growth of 148.2%.

What about the fourth quarter?

Looking ahead, the company notes that it is now cycling a period where its comparative sales measure becomes less meaningful.

This is because this time last year there were national store closures at the height of the pandemic.

Furthermore, although all stores had reopened by 11 May 2020 (at reduced trading hours), foot traffic remained depressed especially in CBD stores and tourist areas.

As a result, sales growth will be extremely strong in the fourth quarter compared to the prior corresponding period, but investors shouldn’t extrapolate this over the remainder of the calendar year.

Is the Universal Store share price in the buy zone?

Despite the Universal Store share price doubling in value since its IPO, one broker believes that its shares can go higher.

According to a note out of Morgans, its analysts have an add rating and $8.37 price target on the company’s shares.

The broker believes Universal Store can grow its earnings by a CAGR of 34% over the next three years.

More reading

• 3 exciting small cap ASX shares for your watchlist
• The ASX share to go gangbusters as COVID vaccines roll out
• 2 rapidly growing small cap ASX shares to watch
• Here’s why SEEK (ASX:SEK) and these ASX shares are at 52-week highs
• 2 rapidly growing small cap ASX shares to buy

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.

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The Peter Warren Automotive Holdings Limited (ASX: PWR) share price has hit the ground running this afternoon following the completion of its initial public offering (IPO).

The automotive retailer’s shares are currently changing hands for $3.50.

This is up 20% from the Peter Warren Automotive listing price of $2.90.

The Peter Warren Automotive IPO

The Peter Warren Automotive share price landed on the Australian share market today after raising approximately $260 million at $2.90 per share.

The proceeds from the offering will allow the company to pursue its growth strategy and provide capital flexibility for further opportunities and acquisitions in addition to strengthening its balance sheet.

Based on a total of 166.6 million shares outstanding, this gave the company a market capitalisation of $483.0 million at listing. However, with the Peter Warren Automotive share price now fetching $3.50, its market capitalisation has ballooned to $585 million.

In FY 2021, the company is forecasting pro forma revenue of $1,565.6 million, gross profit of $257.8 million, and net profit after tax of $31.4 million. This represents year on year increases of 10.8%, 16.7%, and 168%, respectively.

It also means its shares are changing hands for approximately 18.6x FY 2021 forecast earnings.

What is Peter Warren Automotive?

Peter Warren Automotive was founded in 1958 and operates 17 dealerships across Sydney, Northern New South Wales, and Southern Queensland.

The company offers 27 vehicle brands and operates 70 franchises, providing a diversified range of new and used vehicles over the Volume, Prestige and Luxury segments of the automotive market.

From these dealerships, it operates an integrated new and used car retailing business providing the full range of sales and support. This includes parts, service, finance and insurance, and aftermarket products.

The company notes that this full-service offering creates a one-stop holistic offering and provides a strong value proposition for customers. Furthermore, these complementary services contribute to a higher customer retention rate by attracting customers to Peter Warren Automotive at all stages in the life cycle of vehicle ownership.

Judging by the performance of the Peter Warren Automotive share price today, the market appears to believe its full-service offering leaves it well-positioned for growth in the future.

More reading

• ASX 200 down 0.5%: Bingo & Tabcorp takeovers, BlueScope upgrades guidance
• Why the Reliance Worldwide (ASX:RWC) share price is down this morning
• Why the Viva Energy (ASX:VEA) share price is in focus
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 dips, NIB soars, Perenti rises

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.

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The BetMakers Technology Group Ltd (ASX: BET) share price is falling today after the company released its quarterly results.

After dropping several times to an intraday low of $1.23 this morning, the BetMakers share price has regained some ground and is currently trading at $1.25, down 0.4%. 

Let’s take a look at what’s driving the data and analytic company’s share price this morning.

BetMakers’ balance sheet

For the third quarter ending 31 March 2021, the company reported $5.2 million of receipts from customers – up 31% on the last quarter and 206% more than the previous comparable quarter.

While its income was above its average, so were its costs in product manufacturing, operating, staff and leased assets. 

BetMakers reported earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $415,000.

The company received around $57 million after costs from issuing securities and exercising options. $10 million was brought about by a share purchase plan and $50 million by an institutional placement.

BetMakers ended the quarter with around $125.7 million in cash in the bank.

What has Betmakers been up to this quarter?

Betmakers signed an exclusive partnership with Matt Tripp. The deal means Tripp will receive unquoted performance rights in exchange for his pursuit of ‘strategic deals’ for Betmakers. He can also receive both unquoted performance rights and unquoted options for ‘transformational deals’.

Betmakers also entered into agreements to acquire Sportech’s Racing and Digital assets in the United States, United Kingdom and Europe. The company paid £30.9 million for the acquisition.

BetMakers is now working with Sportech and industry regulators to finalise approvals and authorisations for the licences held by the Sportech assets. This is the last condition left before the company can complete the acquisition, which is expected to happen in the current quarter.

BetMakers is also waiting on a legislative process it hopes will allow it to provide fixed odds betting on horse racing in the US. It expects the process to progress in the current quarter.

Commentary from management

Commenting on the results, BetMakers CEO Todd Buckingham said:

The company is well-placed with $125m cash at bank and is on track to complete the acquisition of Sportech’s racing and digital assets in Q4 FY21.

With our strategic partnerships, including with Matt Tripp, and our first-class team and technology assets, we believe the company is extremely well positioned for substantial growth.

BetMakers share price snapshot

The BetMakers share price is having a great year so far on the ASX. Currently, the BetMakers share price is up 77% year to date. It’s also up 416% over the last 12 months.

The company has a market capitalisation of around $977 million, with approximately 775 million shares outstanding.

More reading

• Why this ASX share bull market could run for longer
• The Betmakers (ASX:BET) share price is sliding today
• What happened with the Betmakers (ASX:BET) share price this week?
• Why AVZ, Betmakers, Santos, & South32 shares are storming higher
• Why the BetMakers (ASX:BET) share price is worth watching

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Province Resources Ltd (ASX: PRL) share price is edging higher during late-morning trade. This comes after the company provided investors with an update on the acquisition of Ozexco Pty Ltd.

At the time of writing, the minerals producer’s shares are swapping hands for 22 cents a pop, up 2.3%.

Acquisition completed

Investors appear pleased with the company’s latest news, sending Province Resources shares into positive territory.

According to this morning’s release, Province Resources advised it has completed the acquisition of all shares in Ozexco. This gives right for the company to hold seven exploration licence applications in the Gascoyne region of Western Australia.

The tenements in the area are considered to potentially possess salt, potash and mineral sands. In addition, it provides Province Resource with an opportunity to establish a renewable green hydrogen project over the site.

The newly acquired area also consists of mud-flats in a salt-producing region. The company highlighted that it could be amenable to large-scale solar salt and potash development.

Province Resources revealed it had $7 million in cash to fund future operations.

Earlier in the month, the company entered into a memorandum of understanding (MoU) with global renewable energy leader, Total Eren. The framework paved the way for a feasibility study on potentially developing a proposed HyEnergy Zero Carbon Hydrogen project. This included installing up to an 8-gigawatt renewable power facility, and creating an integrated hybrid renewable energy capacity.

David Frances, managing director of Province Resources, commented:

We are very happy to have completed this acquisition so quickly and smoothly. It is now full steam ahead for Province in our partnership with Total Eren in the assessment of the HyEnergy ZERO CARBON HYDROGEN Project for development as well as continuing to develop our suite of other exciting projects.

Province Resources share price snapshot

The Province Resources share price has delivered astronomical gains to patient investors, rising 2,600% in a year. However, it’s worth noting that year-to-date performance has also been superb, jumping close to 1,600%. The company’s shares reached a high of 25 cents last week.

Province Resources presides a market capitalisation of roughly $214 million, with about 974.6 million shares on issue.

More reading

• 3 ASX shares eyeing Australia’s ‘Hydrogen Valley’
• Why the Province Resources (ASX:PRL) share price just hit an all-time high
• Why the Province Resources (ASX:PRL) share price is up 12%
• Province Resources (ASX:PRL) share price slides despite hitting next project milestone

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. 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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St Barbara Ltd (ASX: SBM) shares are edging lower today despite the company reporting its Simberi Sulphide Feasibility Study highlighted “a robust project with strong financial returns”. At the time of writing, the St Barbara share price is trading 1.98% lower at $2.03.

St Barbara is a gold mining company with projects comprising Leonora in Western Australia, Simberi in Papua New Guinea and Atlantic in Canada. The majority of the company’s revenue is generated by gold sales from its Gwalia underground mine at the Leonora project. 

The company has a diversified asset portfolio consisting of both underground and open-cut mines and exploration projects.

Feasibility study

St Barbara advised that it was “pleased to announce” the results of the Simberi Sulphide Feasibility Study today. It seems investors aren’t quite as upbeat about the news, driving the St Barbara share price lower.

The company’s board has approved pre-investment work of US$13 million in a new sulphide mine, with a final investment decision targeted for March 2022. Key changes from the 2020 pre-feasibility study (PFS) include an increase in nameplate capacity, with an option to expand supported by an improved all-in sustaining cost (AISC) of ~3%.

The pre-investment work will enable a ramp-up in mining, ongoing drilling to further increase ore body knowledge and studies to de-risk the project. Early construction activities will commence upon approval of the social and environmental impact statement (SEIS) which has been submitted this month.

Management comments

St Barbara CEO Craig Jetson commented that the sulphide project is on track for profitability, he said:

The future of the Simberi Sulphide Project has been endorsed by the Board, with a commitment to pre-investment work that will take place as we update mineral reserves, complete reserve definition with drilling and finalise all pre-investment activities. This vote of confidence in the Simberi Operations comes as we work closely with the PNG Government, agencies and community as part of our ongoing consultation and engagement.

This work is continuing despite the current challenges that COVID-19 presents in PNG and is a testament to the relationships we hold in PNG and the vision we have for the Simberi Operations.

St Barbara share price snapshot

The St Barbara share price has fallen by around 21% over the past 12 months and has lost almost half its value since late July 2020. It’s also down 2.4% this week and 17.8% in 2021 so far. Based on the current share price, the company has a market capitalisation of around $1.45 billion.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 shares thrown in the bargain bin: Here’s 3 ideas
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Friday
• Why the St Barbara (ASX:SBM) share price is climbing

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 Archtis Ltd (ASX: Ar9) share price has had underwhelming traction lately. This comes despite strong and growing company fundamentals. 

The Archtis share price has halved since its all-time record high of 60 cents in August 2020. Furthermore, it is down 13% year-to-date. In stark contrast to its share price performance, the company released its quarterly results which highlight record-breaking revenue and recurring licensing. 

Archtis share price flat despite record quarterly results 

The Archtis share price is currently flat despite its strong growth trajectory for accelerated revenue and recurring licensing during the March quarter.

Its revenues for the quarter increased 84% on the prior quarter and up 776% year-on-year to $1.25 million. This was driven by a strong annual recurring revenue from software licensing of $421,000 for the quarter. Up 57% over the prior quarter.

Archtis achieved a number of significant global customer wins, contract renewals, and expansion of existing licenses throughout the quarter. The company believes these milestones strong endorse its secure information sharing platforms NC Protect and Kojensi, as world-leading technology products. 

To further drive growth, the company established a regional presence in London to target Europe, the Middle East, and Africa. In addition, Archtis focused on Singapore to expand its APAC presence. 

Expanding focus

To expand the company’s success in servicing the Australian government and defence industry, Archtis created a US Federal and Defence focused business unit. This unit is designed to serve key US government agencies. 

Operational expenses for the quarter increased 95% over the prior quarter to $2.12 million, reflecting its integration with Nucleus Cyber becoming a part of the company for the full quarter. Archtis has also pushed investment in sales and marketing resources. The intention was to execute its go-to market strategy. This is in line with its ‘use of funds’ segment presented to shareholders during its November 2020 capital raising and March 2021 investor update. 

Despite the increase in costs, the company stands profitable. Furthermore, with a gross profit of $802,000, up 57%. Its gross margins decreased from 75% in the previous quarter to 64%. This is due to an increased proportion of revenue from consulting services. Which is at a lower margin than software licensing, and a one-time pass-through hardware requirement. 

The company retains a healthy cash balance of $12.03 million which is quite significant considering its market capitalisation of just $61 million. 

Archtis share price outlook 

Archtis expects to continue to invest in scalable growth. In particular, in sales and marketing to expand global sales distribution and market awareness. This should translate to continued revenue growth coupled with increasing recurring licensing revenues. Thus, it should drive gross profit and margins higher. 

The company’s strong cash position has given it the confidence to say that it will not require additional capital raises for operational growth, whilst exploring potential strategic acquisitions to expand its product breadth and growth prospects. 

At the time of writing, the Archtis share prices trading for 28 cents, up 5.56%.

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Motley Fool contributor Kerry Sun 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 Could a record breaking quarter bring the Archtis (ASX:AR9) share price back? appeared first on The Motley Fool Australia.

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