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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was in fine form and stormed notably higher. The benchmark index jumped 1.3% to 6,644.1 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise again.

The Australian share market is expected to continue its rise on Wednesday. According to the latest SPI futures, the ASX 200 is expected to rise 37 points or 0.55% at the open. This follows a very positive night of trade on Wall Street which in late trades sees the Dow Jones up 1.5%, the S&P 500 jump 1.6%, and the Nasdaq rise 1.4%. The Dow Jones broke through the 30,000 points mark for the first time.

Fisher & Paykel Healthcare half year results.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price will be on watch this morning when it releases its half year results. The medical device company is expected to deliver strong first half growth thanks to increased demand for ventilators during the pandemic. In August, the company provided full year guidance for operating revenue of approximately NZ$1.61 billion and net profit after tax of NZ$365 million to NZ$385 million. An update on this guidance is likely today.

Oil prices jump higher.

Energy producers including Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO) could push higher again today after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 4.3% to US$44.92 a barrel and the Brent crude oil price has risen 3.8% to US$47.81 a barrel. This appears to have been driven by a combination of vaccine news and President Trump allowing the Biden administration transition to start.

Gold price continues to sink.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) could come under pressure after the gold price sank lower again. According to CNBC, the spot gold price dropped a further 1.85% to US$1,803.30 an ounce. This is being driven by reduced demand for safe haven assets.

Harvey Norman AGM update.

The Harvey Norman Holdings Limited (ASX: HVN) share price could be on the move today. The retail giant is holding its annual general meeting and traditionally provides the market with a sales update at the event. Expectations are high after its rival JB Hi-Fi Limited (ASX: JBH) delivered a strong update at its meeting last month.

More reading

• Santos (ASX:STO) share price on watch following Narrabri Gas Project approval
• ASX 200 rises more than 1% on Tuesday
• ASX stock winners from the $23 billion Victorian state budget
• Macquarie’s model portfolio of ASX stocks to hold in the post-COVID recovery
• Why the Oil Search (ASX:OSH) share price is up 48% in November…and gaining again today

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. 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 Xero Limited (ASX: XRO) share price will be in focus on Wednesday following the release of an announcement after the market close.

What did Xero announce?

This afternoon Xero announced the launch of an offering of US$600 million senior unsecured convertible notes due in 2025 to be issued by its wholly owned subsidiary, Xero Investments, and guaranteed by Xero.

Xero’s CEO, Steve Vamos, advised that the note offering represented the next step in its ongoing program to optimise the company’s financial structure as it executes its strategic priorities.

According to the release, the notes will be listed on the official list of the Singapore Stock Exchange and their conversion will be settled in cash. This is unless the issuer elects to physically settle the conversion through the issue of Xero shares to the relevant noteholders.

Why is Xero launching a notes offering?

Xero advised that it will be using the proceeds, after all costs, to repurchase its existing notes, fund potential acquisitions and strategic investments, and for general corporate purposes.

Xero’s chief financial officer, Kirsty Godfrey-Billy, expects the notes offering to create value for shareholders.

She said: “The new offering, combined with the restructuring of our existing convertible note liability, will benefit shareholders and provide Xero with additional financial flexibility to pursue strategic investments, and deliver ongoing innovation and support of our customers and partners.”

Xero is no stranger to making bolt-on acquisitions. Just last month the company completed the acquisition of Waddle.

Waddle is a cloud-based lending platform that helps small businesses access capital through invoice financing. Management noted that the acquisition aligns with its strategy to grow the small business platform and to address critical small business financial needs.

That acquisition was for an upfront cash payment of A$31 million and subsequent earnout payments based on product development and revenue milestones of up to A$49 million.

More reading

• Is the Xero (ASX:XRO) share price a buy?
• 3 big things you might have missed from the Xero (ASX:XRO) results
• Why Orocobre, Ramsay, Webjet, & Xero shares are dropping lower
• The ASX 200 fell 0.5% on Thursday
• Why are ASX tech shares all over the place 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 Xero. 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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In this article are two ASX shares that are rapidly growing and rated as buys.

The Motley Fool investment services are always combing the market for some of the best opportunities for returns.

These are two businesses that are currently rated as buys by one of the services:

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australia and New Zealand. It has a variety of businesses. Burson Auto Parts provides parts quickly to mechanics across the country. It has a variety of wholesale specialist businesses including AAD, it also recently acquired the Commercial Truck Parts Group which provides parts for light and heavy commercial trucks. It has a retail segment with its key business being Autobarn. Bapcor has service businesses such as Midas and ABS. Finally, the company has a growing presence in Asia, with a network in Thailand.

The auto parts ASX share recently revealed that in the first quarter of FY21 it saw total revenue growth of 27%, despite government COVID-19 restrictions in Victoria and Auckland.

Burson Trade experienced revenue growth of 10%, with same store sales growth of 7.7% – there was 17% growth excluding Victoria. New Zealand revenue grew 6% and same store sales rose 4%. Retail revenue soared 47% with Autobarn same stores sales going up 36% and AB Company same store sales rose 50%. Finally, specialist wholesale revenue grew by 45%, though excluding acquisitions revenue rose by 18%.

Bapcor CEO Darryl Abotomey spoke of the company’s defensive qualities in the trading update: “The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus.”

The ASX share expects to deliver a strong first half, though it couldn’t provide a forecast of earnings for the current year due to uncertainty.

Bapcor is currently rated as a buy by the Motley Fool Share Advisor service. According to Commsec, it’s valued at 18x FY23’s estimated earnings.

Temple & Webster Group Ltd (ASX: TPW)

This is an online furniture and homewares business.

In FY20 the ASX share generated revenue growth of 74% year on year to $176.3 million. Second half revenue rose by 96% and fourth quarter revenue went up 130%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 467% to $8.5 million. Cashflow was positive during the year and it ended with cash of $38.1 million with no debt. During FY20 active customers went up 77% year on year to 480,000.

Like Bapcor, growth has continued into the first quarter of FY21. Year to date revenue, between 1 July 2019 to 19 October went up by 138%.

The first quarter of FY21 saw EBITDA generation of $8.6 million, which was more than the full FY20 year EBITDA.

Temple & Webster said that October revenue growth was still more than 100% which management said was pleasing because it’s coming into the most important trading time of the year.

At the time of the trading update, the ASX share said its contribution margin continued to be ahead of its 15% target.

Temple & Webster was pleased to point out that customer satisfaction remains at record levels, with its net promoter score of around 70% and newer cohorts continuing to perform better than historical comparisons.

The ASX share said that it’s committed to a high-growth strategy to take advantage of the structural shift towards online, capitalising on both organic and inorganic (acquisition) opportunities.

Temple & Webster is currently rated as a buy by the Motley Fool Share Advisor service.

At the current Temple & Webster share price, it’s valued at 37x FY22’s estimated earnings.

More reading

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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 owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended 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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The Santos Ltd (ASX: STO) share price will be one to watch on Wednesday following the release of a positive announcement after the market close.

What did Santos announce?

This afternoon Santos revealed that Federal Environment Minister Sussan Ley has signed off on the $3.6 billion Narrabri Gas Project.

As a result, it will now embark on a 12 to 18 month appraisal program ahead of a Final Investment Decision (FID) for the next phase of project development.

Pleasingly, Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher, notes that the conditions on the approval were consistent with those already set by the New South Wales Independent Planning Commission.

Furthermore, they were generally in line with those for its GLNG operations, where the company is operating safely and efficiently, and protecting water resources and the environment.

Mr Gallagher commented: “We accept the conditions from the Commonwealth, which are very much in line with our other operations across the country and welcome the approval that all relevant matters of national environmental significance have been adequately addressed.”

“Santos is excited about the prospect of developing the Narrabri Gas Project, a 100 per cent domestic gas project that will deliver the lowest-cost source of gas for NSW customers,” he added.

Mr Gallagher believes the development of the project will be a boost to the economy as it recovers from the COVID-19 pandemic.

The chief executive said: “As the economy recovers from COVID-19, game-changing projects like Narrabri are critical to creating jobs, driving investment, turbo-charging regional development and delivering more competitive energy prices.”

What now?

The company has already begun workover activities on existing wells under its current exploration tenures and is working to get various agreements in place that are required prior to the next phase of development.

“Now all we want to do is to get on with creating jobs in New South Wales and Narrabri, and making a real difference to people’s lives in rural and regional communities,” Mr Gallagher concluded.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why the Oil Search (ASX:OSH) share price is the worst performer today
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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. 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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On Tuesday the MyDeal.com.au Limited (ASX: MYD) share price was a particularly positive performer.

The newly listed online retail marketplace provider’s shares finished the day over 7% higher at $1.29.

This means that the MyDeal share price is now up 29% from its initial public offering (IPO) listing price of $1.00.

What is MyDeal?

MyDeal is an online retail marketplace provider with a focus on furniture, homewares, appliances, technology, baby products, and hardware.

It recently raised $40 million from its IPO, which will be used to drive future growth. This includes growing its private label business, investing in its proprietary technology, and investing in advertising to grow its customer base and brand.

The online retailer has been a positive performer in FY 2021. It recently released a first quarter update which revealed quarterly gross sales growth of 317% to $56.67 million.

This was driven by the accelerating shift to online shopping and a 268% increase in active customers to 669,897 compared to the prior corresponding period.

Can the MyDeal share price go higher?

One broker that still sees a lot of value in MyDeal shares is RBC Capital Markets.

Earlier this month it initiated coverage on the company with a buy rating and $1.60 price target. This price target implies potential upside of 24% over the next 12 months.

RBC commented: “We think MYD is at an inflection point as annualised gross transaction value (GTV) exceeds $200m, SKUs pass 5m and customers approach 700k. Key operating metrics indicate the business is starting to benefit from a flywheel effect.”

“This increasing scale presents an opportunity for MYD to position itself as a leading online player focused on a category that is seeing accelerating online penetration. A successful private label strategy is key, as it improves unit economics, provides a point of differentiation and can help build a brand,” the broker concluded.

It also notes that its shares trade at a sizeable discount to Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW).

More reading

• 2 ASX small cap shares tipped for big things
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• MyDeal.com.au (ASX:MYD) share price up 7% on trading update
• These 3 ASX shares to IPO recently are struggling
• Are these small cap ASX shares the next Kogan (ASX:KGN) and Nearmap (ASX:NEA)?

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 and Temple & Webster Group Ltd. The Motley Fool Australia has recommended 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Shares of Tesla Inc (NASDAQ: TSLA) have already soared nearly 500% so far in 2020 but will surge to new all-time highs in the coming year.

That’s according to Wedbush analyst Daniel Ives. On Monday, Ives raised his price target on Tesla’s stock from $500 to $560 but presented a bull case that envisions the stock more than doubling to $1,000. His new base target represents potential gains for investors of roughly 14% over the stock’s closing price on Friday of about $490. It’s the bull case, however, that is most intriguing.

Ives cited several recent achievements by Tesla, including its inclusion in the S&P 500 Index (SP: .INX) and the company’s “sustained path to profitability” as helping continue Tesla’s momentum. He views the bull-story growth through the lens of increasing demand for electric vehicles (EVs) worldwide.

“Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from about 3% of total auto sales today to 10% by 2025,” Ives wrote in a note to clients.

Will Tesla’s stock price hit $1,000?

Tesla started out 2020 saying it expected to deliver 500,000 vehicles, though it was somewhat hamstrung by the pandemic. The company has delivered roughly 318,000 cars so far this year, so reaching its initial target seems unlikely.

With sales of EVs expected to triple over the next few years, and Tesla the clear market leader in the space, it isn’t unthinkable that Tesla will be able to reach that 1 million vehicle-delivery goal over the next several years — if not sooner.

That said, Tesla already has a significant amount of growth baked into its share price. The stock’s valuation clocks in at a lofty 19 when a reasonable price-to-sales ratio is typically between 1 and 2. While it’s certainly possible that Tesla’s stock price could hit $1,000, I don’t expect it to happen in the coming 12 months.

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

More reading

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Danny Vena owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The TOWER Limited (ASX: TWR) share price lifted today after the company entered a settlement agreement with the Earthquake Commission (EQC). The deal regards an outstanding receivable resulting from Canterbury earthquakes. At the time of writing, the Tower share price is up 4.6% to 58.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is hovering above 1.2% to 6,855 points.

Let’s take a closer look at the New Zealand-based insurer and what’s driving the Tower share price higher today.

Settlement reached

Tower said it had settled with EQC for $42.1 million, with the funds including disbursement to reinsurers and costs.

The company advised that the write-off of the residual amount would impact its FY20 reported net profit by $9.5 million. The additional funds will further strengthen its capital position moving forward into FY21.

Pleasingly for Tower, the settlement amounted to 76% of the gross carrying value listed in its accounts. Tower will provide an update on dividend payments with its FY20 results to be released tomorrow.

What did management say?

Commenting on the agreement, Tower chief executive Sid Miller said:

The series of earthquakes suffered by the Canterbury region caused a number of complexities in allocating building and land damage and the cost of repair between different earthquake events. This settlement is a significant milestone for EQC in our Canterbury Earthquake recovery program.

Tower chair Michael Stiassny, added:

The Canterbury earthquakes remain a significant event in New Zealand’s history and will have a lasting impact on the community. For Tower, this legacy resulted in distractions that have been progressively removed over the years and it is important we provide the management team with clear air to move the business forward and accelerate.

The board determined that reaching this settlement agreement dealt with any remaining unpredictability and gave certainty to our shareholders, who will be pleased to see this risk removed from our business.

Tower share price summary

The Tower share price has had a challenging 2020, falling from its multi-year high of 74.5 cents in December 2019 to today’s price of 58.5 cents. This represents a decline of 21%.

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• Why the Next Science (ASX:NXS) share price dropped 9% today
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• The Auroch (ASX:AOU) share price rocketed 11% higher today. Here’s why.
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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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GetSwift Ltd (ASX: GSW) shares plummeted today after the company announced it received a letter from the Federal Treasurer of Australia, Josh Frydenberg. The letter was advising the Treasurer’s views on the company’s proposed plans to re-domicile itself in Canada. By the close of trade, the GetSwift share price had plunged by 10.94% to 28.5 cents. This came after the company this morning reported Mr. Frydenberg’s letter has effectively blocked the company’s plans to delist itself from the ASX, pending the conclusion of its court cases.

What’s the background behind this?

The GetSwift share price has plunged since September when the company announced it was planning to delist itself from the ASX, and list its shares with an obscure Canadian stock exchange, Neo. At that time, management said the move reflected its business strategy in North America, and the fact its significant investors are based there. Under the proposed scheme, a newly formed corporation incorporated in Canada named GetSwift Technologies would become the parent company of the GetSwift group of companies.

This move was subsequently brought to the Foreign Investment Review Board (FIRB) for approval. In a letter dated 20 November, the Treasurer advised the company that he was “considering whether I should issue an order prohibiting GetSwift from making the proposed acquisition”.

The Treasurer wrote:

Without prejudging the outcome of Australian legal proceedings currently on foot, it is my preliminary view that the proposed acquisition would be contrary to the national interest at this time due to there being ongoing legal matters concerning GetSwift, which are yet to be resolved.

What legal matters is GetSwift currently facing?

The legal matters to which the Treasurer referred in his letter concern ongoing legal proceedings brought by the Australian Securities and Investment Commission (ASIC) against the founders of GetSwift – Bane Hunter and former AFL player, Joel Macdonald. 

ASIC alleges that GetSwift, through its directors, Mr. Hunter and Mr. Macdonald, made misleading representations regarding customer contracts to the ASX in 2017, which sent its share price soaring at the time. If found guilty, both men could face permanent corporate bans in Australia. 

The company is also facing another class action brought by law firm, Phi Finney McDonald, on behalf of shareholders. This addresses concerns about the amount of GetSwift cash finding its way overseas, as well as the recent plans to relocate to Canada.

How did the GetSwift share price do in 2020?

As mentioned, the GetSwift share price has plunged more than 60% after its delisting announcement in September. On a year to date basis, the GetSwift share price has lost 40%. At the current price of 28 cents, the company has a market capitalisation of around $69 million.

GetSwift is a technology-based, last mile logistics provider. It makes money from customers like Red Rooster in Australia by determining the best delivery route to transport product from stores to customers’ homes. The company is yet to be profitable.

More reading

• ASX 200 rises more than 1% on Tuesday
• Here’s why the Bravura Solutions (ASX:BVS) share price raced higher today
• ASX stock winners from the $23 billion Victorian state budget
• 3 reasons the Redbubble (ASX:RBL) share price is in the buy zone
• Elon Musk is now the world’s second richest person

Motley Fool contributor Eddy Sunarto 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 S&P/ASX 200 Index (ASX: XJO) rose by around 1.25% today to 6,644 points.

Here are some of the main highlights from the ASX today:

Some resource ASX shares surged higher today, except gold

Gold was the one resource sector to suffer a decline today whilst other areas like oil went higher.

The Silver Lake Resources Limited. (ASX: SLR) share price fell 9.4%, the Perseus Mining Limited (ASX: PRU) share price fell 7.6%, the Northern Star Resources Ltd (ASX: NST) share price fell 8.9% and the Saracen Mineral Holdings Limited (ASX: SAR) share price dropped 9%.

At the opposite end of the ASX 200 was the oil business Beach Energy Ltd (ASX: BPT) share price which rose around 8.2%. The Whitehaven Coal Ltd (ASX: WHC) share price shot higher by 6.9% and the Woodside Petroleum Limited (ASX: WPL) share price went up around 3%.

Over the weekend, the Oxford University-AstraZeneca vaccine showed average effectiveness of 70%, with one dosage option giving 90% protection.

Other resource shares also went higher with the BHP Group Ltd (ASX: BHP) share price rising 3.4% and the Rio Tinto Limited (ASX: RIO) share price going up around 2.2%.

Brickworks Limited (ASX: BKW)

Brickworks held its annual general meeting and gave a trading update as well.

The construction business gave some more details about its industrial property trust’s progress that it owns half of together with Goodman Group (ASX: GMG).

It said that development activity by the property trust has continued at an unprecedented scale. At Oakdale West, construction of the Amazon distribution facility is well advanced and is due to be completed in September 2021. Brickworks also said that infrastructure works are also proceeding to schedule and will allow construction of the Coles Group Ltd (ASX: COL) distribution warehouse to commence early in 2021.

Once these two facilities are completed, net rental distributions will increase by over 25% and gross assets held within the property trust is expected to exceed $3 billion. Management said that there is sufficient remaining land to provide at least a further five years of development.

Brickworks said that its Australian building products division has made a strong start to FY21, with first quarter earnings well ahead of the prior corresponding period.

However, in North America sales in recent months have been below expectations because of impacts of COVID-19.

The Brickworks share price went up 4% today in reaction to this update.

TechnologyOne Ltd (ASX: TNE)

ASX 200 software business TechnologyOne reported its FY20 result today. It grew revenue by 4% to $299 million. Revenue from its software as a service (SaaS) and continuing business went up 12% to $269.8 million and SaaS annual recurring revenue (ARR) rose by 32% to $134.6 million.

Reported profit before tax went up 8% to $82.5 million and underlying profit before tax went up 13% to $86.1 million. The company reported that its underlying profit before tax margin increased to 29%, up from 27% in the prior corresponding period.

Reported profit grew by 8%. It was impacted by a one-off increase in legal provisions, because of a judgement against TechnologyOne in a civil employment case.

The company continues to work on a transition away from its legacy licence business to SaaS. Its legacy licence business was down 34%, which reduced the profit and loss by $14 million in FY20.

TechnologyOne declared an annual dividend of 12.88 cents, which was an increase of 8% compared to last year. Its cashflow generation of $66.4 million was an increase of 49% compared to last year.

The TechnologyOne share price rose by around 0.4% in reaction to this news.

More reading

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• ASX energy shares surge ahead as oil rises to 9-month high
• Why ASX, Kogan, Myer, & Northern Star shares are dropping lower
• Could Citi’s forecast spell good news for the Lendlease (ASX:LLC) share price?
• Why ASX gold shares are the worst performers so far today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 was a great day of trade for the Bravura Solutions Ltd (ASX: BVS) share price on Tuesday.

The financial technology company’s shares charged 4% higher to end it at $3.43.

Why did the Bravura share price charge higher?

This afternoon Bravura released the annual general meeting presentation for its virtual event.

At the event the company spoke positively about its long term prospects and provided the market with commentary around its expectations for FY 2021.

In respect to the former, management believes Bravura is well-positioned for long term growth. Particularly given the high level of investment it has made into its key Sonata platform.

Bravura Chair, Neil Broekhuizen, commented: “We have invested over A$210m in our flagship product Sonata. This investment has positioned Sonata as a market leader in our key regions and has delivered excellent returns for shareholders.”

“In FY20, we invested an additional A$36m in our product suite to further enhance digital functionality across our offerings. This includes the development of Sonata Alta, our new cloud-based operating model that gives our clients the agility to ‘plug and play’ best-of-breed technology solutions to achieve the functionality they need,” he added.

In light of this, the company’s chief executive officer, Tony Klim, believes Bravura is “well positioned to achieve sustainable growth in the years ahead, energised by our new Sonata Alta proposition and recent acquisitions.”

FY 2021.

While the longer term outlook is looking rosy, its near term performance is facing sizeable headwinds due to the COVID-19 pandemic.

Management notes that the pandemic has lengthened the sales cycle and stifled its growth this year.

Mr Klim commented: “As noted at Bravura’s FY20 results, while the new sales pipeline remains strong, due to the wider impact of COVID19 there is greater uncertainty in the timing of deal closures when compared to prior years. It is possible that FY21 NPAT will be similar to FY20.”

However, Mr Klim has warned that the majority of its earnings will be generated in the second half of the financial year.

He explained: “In October 2020, we also flagged that the second wave UK lockdowns and stalling Brexit negotiations have increased uncertainty and are slowing the progress of pipeline opportunities in the UK. As a result, Bravura expects FY21 NPAT to be weighted approximately 80% to the second half of FY21.”

Mr Klim appears confident this is just a short term headwind and expects the company to benefit from favourable industry tailwinds in the future.

The chief executive said: “The onset of the COVID-19 pandemic has increased the importance financial institutions have placed on engaging more closely with their customers. Bravura has developed enhanced digital applications that allow our clients to meet this demand. Our technology platforms address the key issues faced by the world’s financial institutions.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions 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.

The post Here’s why the Bravura Solutions (ASX:BVS) share price raced higher today appeared first on Motley Fool Australia.

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