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There are some interesting reasons why the Temple & Webster Group Ltd (ASX: TPW) share price could be a buy right now.

What is Temple & Webster?

Temple & Webster describes itself as Australia’s online retailer of furniture and homewares.

It has over 200,000 products on sale from hundreds of suppliers. The business runs a drop shipping model where products are sent directly to customers by suppliers, enabling faster delivery times and reducing the need to hold inventory, allowing for a larger product range.

The drop ship range of products is complemented by Temple & Webster’s private label range which is sourced directly from overseas suppliers.

Why the Temple & Webster share price could be interesting

1: Fast revenue growth

Temple & Webster continues to generate fast revenue growth, particularly since the COVID-19 pandemic came along.

In FY19 the company generated revenue growth of 41% to $101.6 million. In FY20 the online business made $176.3 million revenue, up 74%. In the FY21 half-year result it saw revenue climb by 118% to $161.6 million.

The recent half-year result included trade and commercial division revenue growth of 89% year on year. Private label sales has increased as a percentage of total sales, up to 25% of total sales, an increase from 18% in the first half of FY20.

Management revealed that the second half has started strongly with January’s revenue growth being more than 100%.

2: Increased customer demand and growing market share

The number of customers increased by 102% over the period to 687,000.

Temple & Webster’s CEO Mark Coulter explained the benefits of gaining market share during the most-affected COVID-19 months: “The NAB online sales index suggests our category grew around 57% during the months of April to July, while we grew around 150% for the same period. We believe this is due to the increasing benefits of scale as we get larger. We are forging closer relationships with our suppliers as we become a more significant part of their business which allows us to obtain stock security, better terms and exclusive product ranges. We are also making larger investments in areas such as technology and data, brand awareness and our private label products; and we can produce more content by having more creative resources. In effect, the bigger we get, the better and strong our customer proposition becomes, which is a virtuous cycle.”

The e-commerce business also said that the amount of dollars per active customer increased by 6% to $401 due to higher repeat purchasing.

The company’s customer satisfaction score, the NPS, has seen consistent year on year growth thanks to increase in the improvements in quality, range and service.

3: Rising profit margins

Whilst the FY21 half-year revenue went up by 118%, the earnings before interest, tax, depreciation and amortisation (EBITDA) surged by 556% to $14.8 million.

Temple & Webster explained that a large part of its margin improvement came about from the growth of private label products.

Fixed costs as a percentage of revenue decreased to 7.5%, down from 11.6% last year.

The gross profit margin increased from 44.2% to 45.5% in the result and the EBITDA margin grew from 3.1% to 9.2%.

Valuation

The Temple & Webster share price has fallen by almost 20% since 25 January 2021. According to Commsec, it’s now trading at 39x FY23’s estimated earnings.

In terms of the outlook, the ASX share’s leadership think there are still strong tailwinds including: the ongoing adoption of online shopping due to structural and demographic shifts, an acceleration of these trends due to COVID-19, an increase in discretionary income due to travel restrictions and the continued recovery of the housing market and unemployment levels.

More reading

• ASX retail shares show strong signs of resurgence 
• Here’s a bargain ASX share in a sea of expensive stocks
• 3 great ASX tech shares to buy
• How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?
• ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength

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

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The Noxopharm Ltd (ASX: NOX) share price gained more than 21% today, surging in a last-minute buying frenzy to close at 83 cents.

Noxopharm is an Australian clinical-stage drug development company. Its Veyonda drug is being designed to support cancer patients undertaking chemotherapy or radiotherapy treatment.

Noxopharm share price rockets upon survival benefit results

The company announced today that it would present its latest research findings at the American Society of Clinical Oncology (ASCO) Genitourinary Cancers Symposium later this week. 

The research pertains to extending the lives of patients who have late-stage prostate cancer. 

Noxopharm’s LuPIN study enrolled a total of 56 patients with metastatic castration-resistant prostate cancer. Patients were treated with a combination of Veyonda with ¹⁷⁷Lu-PSMA-617, an experimental radiopharmaceutical.

The goal of the combined (LuPIN) treatment was to slow or block tumour progression so that patients can live a better quality of life, and their survival is extended in a well-tolerated way.

The median overall survival (mOS) for the 56 participants in the LuPIN study was 19.7 months, an increase on the 17.1 months reported 12 months ago.

This survival benefit exceeds that reported for any current standard of care treatment, including one acquired by Pfizer Inc (NYSE: PFE) in 2016 for US$14 billion.

The LuPIN data reinforces Noxpharma’s belief that a combination of Veyonda and ¹⁷⁷lutetium-PSMA-617 represents a “long-awaited forward leap” in cancer treatment.

Words from the CEO

Commenting on the company’s latest progress, CEO Dr Graham Kelly said:

Today’s clinical data continues to cement the view that Veyonda is on track to become a major new immunotherapy oncology drug of medical and commercial significance.

The DARRT program has already suggested this and the LuPIN program now confirms it. All of which augurs well for our upcoming IONIC program. Collectively, these three programs highlight the diversity of use and potential value of Veyonda.

The Noxopharm share price has gained more than 41% year-to-date and is up more than 250% over the past 12 months.

More reading

• Why the Noxopharm (ASX:NOX) share price is bouncing up today

Motley Fool contributor Gretchen Kennedy 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 S&P/ASX 200 Index (ASX: XJO) fell by 0.9% today to 6,821 points.

Here are some of the highlights from today:

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price was the best performer in the ASX 200, rising by 6.6% today.

Macquarie said that trading conditions have improved across the group in the quarter ending 31 December 2020.

The investment bank said that its annuity-style businesses called Macquarie Asset Management (MAM) and banking and financial services (BFS) experienced a profit increased in the third quarter compared to the prior corresponding period. Net profit for the nine months from these businesses was broadly in line with the prior corresponding period due to base and performance fees being flat, partially offset by BFS margin pressure, increased credit impairment charges and higher costs to support clients through COVID-19.

The ASX 200 business said that its market-facing businesses of commodities and global markets (CGM) and Macquarie capital experienced a significant increase in net profit in the third quarter. However, FY21 year to date profit was broadly in line with FY20 year to date thanks to stronger activity across most CGM businesses, offset by lower fee revenue and principal income in Macquarie Capital.

Macquarie said that it has $8.1 billion of surplus capital and that it’s expecting the FY21 result to be slightly down on the FY20 result.

The Macquarie CEO, Ms Wikramanayake, said: “Macquarie remains well-positioned to deliver superior performance in the medium term due to our deep expertise in major markets, strength in business and geographic diversity and ability to adapt our portfolio mix to changing market conditions, an ongoing program to identify cost savings initiatives and efficiency, our strong and conservative balance sheet and a proven risk management framework and culture.”

Crown Resorts Ltd (ASX: CWN)

The Crown share price will be under scrutiny this week after the casino business was ruled to be not suitable to hold the licence to run the Barangaroo casino unless there are several changes, a NSW casino inquiry has found, according to reporting by media such as the Australian Financial Review.

Some of the recommendations include James Packer selling his shareholding to 10% (or less) of the company, down from 37%. Another suggestion is board changes.

Commissioner Patricia Bergin wrote: “Any applicant for a casino licence with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to triads and organised crime groups would not be confident of a positive outcome.”

Challenger Ltd (ASX: CGF)

The Challenger share price fell by almost 15% today, it was the worst performer in the ASX 200 after releasing its half-year result.

Challenger that its assets under management (AUM) increased over six months by 13% to $96.1 billion. Year on year, annuity sales increased by 12% to $2.2 billion and total life sales rose 10% to $3.4 billion.

Challenger’s normalised net profit before tax of $196 million was down by 30% compared to the prior corresponding period. Normalised earnings per share (EPS) was down by 35%.

The ASX 200 company said that it was on track to achieve its normalised net profit before tax guidance which is in the range of $390 million to $440 million. Challenger said that the bank acquisition will drive medium-term growth.

The board of Challenger decided to declare an interim dividend of 9.5 cents per share.

More reading

• Crown (ASX:CWN) shares on watch after being found unsuitable to operate Sydney casino
• Countdown to launch of new ASX indexes for ESG boom
• Why Challenger, DEXUS, Emeco, & Zip shares are tumbling lower
• ASX 200 down 0.4%: Macquarie impresses, Challenger disappoints, & Suncorp rises
• Why Douugh, Macquarie, Starpharma, & Suncorp shares are storming higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Macquarie Group Limited. The Motley Fool Australia has recommended Crown Resorts 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 Piedmont Lithium Ltd (ASX: PLL) share price surged higher today following the addition of a seasoned minerals executive to its board.

At market close, shares in the Australian lithium miner finished the day at 74.5 cents, up 12%.

New appointment

The Piedmont share price moved higher today after the company’s appointment of experienced mining executive Todd Hannigan to its leadership team. His new role as non-executive director took immediate effect from yesterday.

Piedmont noted that Mr Hannigan would bring a wealth of experience to the company with industry knowledge and corporate relationships. His focus on battery manufacturing and advanced materials is expected to help progress Piedmont’s Lithium Project in the United States.

The company noted that Mr Hannigan served as CEO for Aston Resources Limited from 2010 to 2011. During this period, he led Aston Resources from a small private company to one of the largest-listed coal companies on the ASX. The company raised roughly $2 billion in equity funding to acquire and develop the Maules Creek coal project. At the end of 2011, Aston merged with fellow mid-tier miner Whitehaven Coal Ltd (ASX: WHC) in a $5.1 billion deal.

Most recently, in January 2021, Mr Hannigan took up the role of non-executive chair of Tao Commodities Limited. The minerals exploration company is currently working on bringing its Titan Project – a rare earth, titanium and zircon rich project in the United States – online within the coming years.

Mr Hannigan graduated from the University of Queensland, holding a Bachelor of Engineering (Mining) with Honours. He also has an MBA from one of the world’s leading and largest graduate business schools, INSEAD.

What did management say?

Commenting on the appointment, Piedmont independent chair Jeff Armstrong said:

Todd is an outstanding addition to our board and will add valuable leadership and experience. Todd is a large shareholder in Piedmont which is a testament to the quality of our Piedmont Lithium Project.

Based in Victoria, Todd will serve as an independent director and provide support for our continued ASX listing (via Chess Depositary Interests or “CDI’s”) following our proposed re-domiciliation from Australia to the United States this year.

How has the Piedmont share price performed?

The Piedmont share price has rocketed more than 500% in the 12 months, reflecting positive investor sentiment in the lithium industry.

The company’s share hit a multi-year low of 6.2 cents in March, before surging to a high of 82.5 cents.

Based on the current share price, Piedmont’s market capitalisation now stands at $1 billion.

More reading

• Fossil fuels vs renewables: What’s ahead for ASX energy shares?
• ASX coal stocks increasingly isolated with rise of start-ups like MGA Thermal
• The Piedmont Lithium (ASX:PLL) share price just rocketed 32% to a record high
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher
• These were the worst performing ASX 200 shares last week

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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The Crown Resorts Ltd (ASX: CWN) share price will be one to watch when it returns from its trading halt.

This morning the casino and resorts operator requested the halt ahead of the release of the Commissioner’s report in relation to an inquiry into the suitability of Crown Resorts holding the licence for Sydney’s Barangaroo casino.

What has happened?

This afternoon that final report was released and reveals that Commissioner Patricia Bergin has deemed Crown Resorts to be unsuitable to operate its new Sydney casino. This follows a public inquiry which uncovered allegations of money laundering.

According to the ABC, the final report states that Crown Resorts needs to make sweeping cultural changes if it wants to be considered a suitable operator in the future.

Though, it is worth noting that this final report remains a recommendation that requires final approval by the Independent Liquor and Gaming Authority (ILGA). But that is expected to be a formality at this point.

What was said?

According to the AFR, Commissioner Bergin labelled the company as arrogant and “quite unsuitable to hold a casino licence in New South Wales.”

She said: “Any applicant for a casino licence with the attributes of Crown’s stark realities of facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to triads and organised crime groups would not be confident of a positive outcome.”

“It is obvious that such attributes would render an applicant quite unsuitable to hold a casino licence in New South Wales.”

“These facts and the stark realities expressed so baldly may also suggest that it is obvious that the licensee is not suitable to continue to give effect to the Barangaroo Licence and that Crown is not suitable to be a close associate of the licensee,” she added.

All eyes will be on the Crown share price when it returns to trade after this major setback. This could possibly be as soon as Wednesday morning.

More reading

• ASX 200 rises, Worley dumped, Mesoblast rises
• Why the Crown (ASX:CWN) share price could be hit harder than others today
• 5 things to watch on the ASX 200 next week
• Why Cleanaway, Crown, Pro Medicus, & Vulcan shares are tumbling lower
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts 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 AD1 Holdings Ltd (ASX: AD1) share price has been flying high today after the company announced a milestone contract award.

The AD1 share price rocketed to an intraday high of 6.8 cents, up 25%, in opening trade but has retreated through the day to 5.7 cents, up 9.62%.

A quick take on AD1

Based in Melbourne, AD1 provides customer-branded recruitment technology platforms, utility software billing services and management platforms.

Its ‘Acquire solutions’ is an energy industry sales intelligence tool that allows a company to manage its sales database.

‘Zone solutions’ is a customer portal that collates information to provide a range of reporting metrics for customers. The platform also offers customer-self service options, negating the need to connect to a company representative.

What did AD1 announce?

In today’s release, AD1 advised its utility division has signed a 5-year agreement with Australian energy retailer, Locality Planning Energy (LPE).

The new deal will expand AD1’s current scope of work for LPE. This will include energy sales intelligence (Acquire) and customer portal (Zone) solutions for LPE’s existing customers. In turn, the new offering will enable improved cost efficiencies by enhancing the customer experience using sophisticated technology.

The expanded agreement builds on the original contract signed in May 2018. AD1 previously delivered billing & operations Software-as-a-Service (SaaS) solution and related managed services for LPE’s on-market customers.

It’s expected that the new deal will generate revenue of about $10 million for AD1 over the 5-year term. This is a 200% revenue increase on the previous contract signed.

Management commentary

AD1 CEO Prashant Chandra welcomed the new agreement, saying:

This is a landmark deal for the company and we are thrilled to extend and expand our partnership with LPE for a further five years.

Our utilities SaaS solutions assist energy retailers enhance their value offering and achieve their growth objectives in a very cost-effective manner. The five-year expansion of services is a validation of the value in our commercial offering.

Mr Chandra said additional revenues under the deal would start post-implementation, which was anticipated to be completed during the July-September 2021 quarter. It would increase the company’s recurring SaaS and managed services revenue by approximately 50% compared to FY20, he said.

AD1 share price snapshot

The AD1 share price has surged 510% higher since early June last year. At the current share price, AD1 has a market capitalisation of $34 million.

More reading

• Why the Harvey Norman (ASX:HVN) share price just hit a decade-high
• 3 under the radar ASX small cap shares to watch
• Why the Bionomics (ASX:BNO) share price is climbing today
• What to expect from the JB Hi-Fi (ASX:JBH) half year result
• Here’s why the Alterity Therapeutics (ASX:ATH) share price blasted 20% higher today

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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The Australian share market may be dropping lower today but that hasn’t stopped the Harvey Norman Holdings Limited (ASX: HVN) share price from continuing its ascent.

In afternoon trade the retail giant’s shares are up 1% to a decade-high of $5.68.

This latest gain means the Harvey Norman share price is now up almost 19% since the start of 2021.

Why is the Harvey Norman share price at a decade-high?

Investors have been fighting to get hold of the company’s shares in recent months due to a very strong sales update in November and recent positive updates from its rivals. This has sparked hopes of a blockbuster half year result later this month.

In respect to its November update, the retailer revealed aggregated sales revenue growth of 28.2% between 1 July and 21 November compared to the prior corresponding period.

Management advised that this was driven by strong same store sales growth across almost all regions and particularly in the ANZ market.

Australian franchisees delivered a 30.4% increase in comparable store sales, whereas its New Zealand stores reported a 20.4% lift in comparable store sales. This includes stores that were temporarily closed due to COVID-19.

Pleasingly, thanks to margin expansion, Harvey Norman’s unaudited profit before tax grew 160.1% between 1 July and 31 October.

What is expected for the first half?

According to a note out of Goldman Sachs, its analysts are expecting Harvey Norman to deliver sales of $2,294.8 million and earnings before interest and tax of $634.7 million.

This represents a 26.2% and 105.8% increase, respectively, compared to the first half of FY 2020.

On the bottom line, Goldman expects its net profit after tax to increase 117.8% to $432.1 million. This is forecast to lead to an interim dividend of 20 cents per share, up 233.3% year on year.

Is it too late to buy Harvey Norman shares?

Goldman Sachs currently has a buy rating on the company’s shares.

However, it is worth noting that the recent rise in the Harvey Norman share price means it is now trading well ahead of the broker’s price target of $4.90.

One broker that still sees upside for the company’s shares is Macquarie. Last week it put an outperform rating and $6.00 price target on Harvey Norman shares.

More reading

• ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength
• Why these market experts aren’t concerned about the ASX 200’s pullback
• Top brokers name 3 ASX shares to buy today
• This ASX company will double its earnings this year: fundie
• With retail sales numbers rising, how are these 3 ASX shares performing?

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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If you’re looking to gain exposure to the small side of the market, then you might want to take a look at the small cap ASX shares listed below. 

Here’s why these small cap ASX shares could be ones to watch:

Felix Group Holdings Limited (ASX: FLX)

Felix is a cloud-based enterprise software-as-a-service marketplace platform provider for the commercial construction and related industries. It connects contractors and their third-party vendors, automating, and streamlining a range of critical procurement-related business processes. Since launching in 2013, its online Vendor Marketplace has grown to become a leading marketplace for the Australian commercial construction sector. In FY 2020 the company reported sales revenue of $3.7 million. This compares to its global total addressable market estimated to be worth $7.2 billion.

PlaySide Studios Limited (ASX: PLY)

PlaySide Studios is one of the largest independent video game developers in Australia. At present, the company has a total of 52 titles developed, including games based on its own original intellectual property and games developed with Hollywood studios. The latter comprises titles relating to Jumanji, The Walking Dead, and Disney Pixar’s Cars. From these titles, PlaySide delivered a 55% increase in revenue to $7 million in FY 2020. This is just a fraction of its global market opportunity, which the company currently estimates to be worth $77.2 billion per annum.

Serko Ltd (ASX: SKO)

Serko is an online travel booking and expense management provider. Its Zeno Travel product provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Whereas its other platform, Zeno Expense, allows users to automate and streamline the expense administration function, identify out-of-policy expense claims, and prevent fraud. Times have been hard because of the pandemic, but demand is starting to pick up. This should be supported by its recent deal with travel giant Booking.com.

More reading

• 3 growing small cap ASX shares to watch
• 2 ASX shares that this fundie really likes right now
• 2 stellar small cap ASX shares rated as buys
• 3 exciting ASX tech shares to buy
• 2 very exciting small cap ASX shares to watch

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 Serko Ltd. The Motley Fool Australia has recommended Serko 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 Bionomics Ltd (ASX: BNO) share price continues to climb today after the company announced it had received commitments for a placement.

At the time of writing, shares in the clinical-stage biopharmaceutical company are up 2.2% to 22.5 cents. Today’s movement follows major gains for the Bionomics share price recently, up 48% over the past week.

What’s moving the Bionomics share price?

Bionomics advised that it has entered agreements for a placement with several North American and European institutional and sophisticated investors to raise almost $16 million.

Under listing rule 7.1, the company will use its 15% placement capacity to issue 110,287,132 ordinary shares to eligible investors. Each share price will be offered at 14.5 cents, reflecting a 20% discount on the 30-day volume-weighted average recorded on 5 February. Notably, the new parcel of shares is trading at a 55% discount based on the current Bionomics share price.

The company expects the placement to be completed before 26 February.

Once the capital raise is wrapped up, Bionomics will launch an entitlement offer to its existing shareholders. The share purchase plan will offer the same price of 14.5 cents apiece. Bionomics will release further details to the ASX market in due course.

In addition, Apeiron Investment Group will help fund Bionomics’ BNC210 Phase 2b Clinical trials to treat post-traumatic stress disorder (PTSD). This was conducted with Apeiron underwriting a further raising of $15 million at a minimum price of 6 cents per share.

Management commentary

Bionomics executive chair Dr Errol De Souza welcomed the progress, saying:

We were pleased that a number of well-known specialist life sciences investment funds participated adding to a very strong shareholder base, which includes Apeiron Investments, Biotech Value Fund, Merck, Peter Thiel and Mike Novagratz.

We remain on track to the completion of our ongoing 7-day dosing pharmacokinetic study of our novel BNC210 tablet formulation in 1Q CY2021 and starting the Phase 2b PTSD trial in mid-2021.

Apeiron founder Christian Angermayer added:

We are pleased to support Bionomics both as an underwriter in this placement and as a long-term shareholder of the company. We look forward to participating in the entitlement offer alongside other investors.

PTSD and other mental health disorders are enormous burdens for those that live with them. Bionomics’ lead drug BNC210 has already received fast track designation from the FDA and I am confident of the strong potential of the upcoming Phase 2b PTSD trial to drive value for both patients and shareholders.

Foolish takeaway

The Bionomics share price has accelerated over the past 12 months, gaining more than 228%. The company’s shares hit a low of 3 cents in March, before moving on an upwards trajectory.

At the current share price, Bionomics commands a market capitalisation of $165 million.

More reading

• What to expect from the JB Hi-Fi (ASX:JBH) half year result
• Here’s why the Alterity Therapeutics (ASX:ATH) share price blasted 20% higher today
• CBA, Westpac, ANZ adopt same tech as Bitcoin
• Afterpay and Zip were among the most traded ASX shares last week
• ASX retail shares show strong signs of resurgence 

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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With earnings season now underway, I have been looking at what is expected from some of Australia’s most popular companies.

On this occasion, I’m going to take a look a retail giant JB Hi-Fi Limited (ASX: JBH).

What is expected from the JB Hi-Fi half year result?

A strong first half result is expected from JB Hi-Fi on 15 February. And while much of its financials have been pre-released in January, there’s still plenty to be keeping an eye on.

In case you missed it, last month JB Hi-Fi revealed that it had a very strong half thanks to continued elevated customer demand for consumer electronics and home appliance products.

As a result, it expects to report a 23.7% increase in sales to $4,941.2 million and a whopping 86.2% lift in net profit after tax to $317.7 million for the half.

What else should you look for?

According to a note out of Goldman Sachs, it has suggested that investors watch out for a number of key factors.

These include cash flow, drivers of performance across operating leverage, its gross margins, and a trading update for January.

Goldman is expecting the retailer to report an operating cash flow of $224.9 million, capital expenditure of $28.5 million, and a net cash position of $257.8 million.

From this, it is forecasting the company to declare a fully franked interim dividend of 178 cents per share, which is up 79.8% on the prior corresponding period.

Looking ahead, Goldman commented: “While we expect trends into January to have remained strong, even if moderating, any trading updates or outlook updates will be key indicators to understand the earnings trends into 2H21 and beyond.”

Is the JB Hi-Fi share price in the buy zone?

Goldman Sachs believes the JB Hi-Fi share price is fully valued now and has put a neutral rating and $51.60 price target on its shares.

It prefers Super Retail Group Ltd (ASX: SUL) and has a buy rating and $14.80 price target on its shares.

More reading

• ASX retail shares show strong signs of resurgence 
• Here’s a bargain ASX share in a sea of expensive stocks
• 2 ASX dividend shares with yields above 5%
• 3 ASX dividend shares with large yields and consistent payouts
• 3 ASX dividend shares with yields above 4%

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

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