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Last week’s US presidential elections have resulted in a win for Democratic candidate Joe Biden. Mr. Biden was, of course, running against the incumbent Republican President Donald Trump. After an initially unclear election result, Biden was declared the eventual winner on Sunday (our time), and has since assumed the title of ‘President-elect’.

How has the market reacted to this news? Very well, if the numbers are anything to go by.

Since 4 November (the date of the election in Australia), the S&P/ASX 200 Index (ASX: XJO) is up 6.1%. That’s pretty close to the long-term average the ASX 200 delivers in an entire year (according to State Street Global Advisors, the ASX 200 has returned an average of 7.53% per annum since 2001). And since Biden’s win was called, the ASX 200 is up 4.4%.

So clearly the US election was a major market-moving force. But how exactly have ASX investors really responded to the changing of the guard at the White House?

Reporting in the Australian Financial Review (AFR) this week answers that question.

Biden win leads investors to China… and cannabis

Cannabis and China: not a combination of words we see too often. But that’s where the AFR tells us investors are parking their money at the dawn of the Biden administration.

According to the AFR article, analysis of trading activity on poplar brokering platform Stake over the past week or so has come up with some interesting results. Chief amongst those is that investors are suddenly far more bullish on Chinese companies (at least those listed in the US).

Stake lists Chinese electric car maker Nio Inc (NYSE: NIO) as the most popular share its investors have been buying in the wake of Biden’s win. That displaces long-running favourite Tesla Inc (NASDAQ: TSLA).

It also notes that other Chinese companies like e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) and electric vehicle company Xpeng Motors (NYSE: XPEV) were also in Stake investors’ ‘top 5’ shares.

Why China? Well, according to the AFR article, investors are likely to be “reacting positively to a potential end to the so-called trade war and the Trump administration’s tough stance on China.”

Stake investors were also giving the green light to cannabis stocks. Canadian marijuana company Aurora Cannabis Inc (NYSE: ACB) was reportedly the second-most popular share on Stake in the wake of Biden’s win, after multiple US states also legalised recreational cannabis in last week’s elections. According to the AFR article, Biden’s attitude towards the sector is also much more lenient than Trump’s.

It will be interesting to see whether these trends hold up over the coming weeks and months, or if this surge in interest in cannabis and Chinese companies is more of a flash in the pan.

More reading

• Why the Aristocrat (ASX:ALL) share price could jump next week
• The Hipages (ASX:HPG) share price jumped 16% after its IPO
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Best and worst ASX retail stocks to own in the COVID recovery
• The Soul Patts (ASX:SOL) share price just hit a 52-week high

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd. and 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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Even as the market seems to be losing its puff, the Aristocrat Leisure Limited (ASX: ALL) share price could be poised to rally next week.

The S&P/ASX 200 Index (Index:^AXJO) gave up morning gains and slipped 0.2% during lunch time trade.

The benchmark is up by nearly 9% since the start of the month thanks to news of a potential COVID‐19 vaccine and a Joe Biden US presidency.

Is a market correction looming?

But some experts believe the bounce is an overreaction. The vaccine candidate from Pfizer, as promising as it is, still has some ways to go before it’s available to the general public.

President-elect Biden is also going to face an uphill battle to control the pandemic and execute on his economic agenda.

While experts will continue to debate whether the golden run for COVID beneficiaries like the Afterpay Ltd (ASX: APT) share price and Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price is coming to an end, the stock investors should be watching is Aristocrat.

Why the Aristocrat share price can outperform

The gaming machine maker is set to report its full year results next Wednesday. And if brokers are right, the Aristocrat share price could be set to rally further.

Morgans believes the group’s outlook will give investors something to celebrate over and it reiterated its “add” recommendation on Aristocrat.

“The company’s 2H20 result will have been heavily impacted by COVID-19 but we expect ALL to exit the current environment in a stronger position than competitors,” said Morgans.

“And given an expected sharp deleveraging over the next few years, we see scope for further debt funded acquisitions.”

Is Aristocrat’s weakest business set to recover?

Social distancing and lockdowns to control the spread of COVID have impacted on casinos and gaming venues. These are customers of Aristocrat.

Even then, there are reasons to be optimistic. UBS noted that Aristocrat contributes 28% of net win for casino-owned games despite still having fewer machines than its rivals on the floor.

While that’s encouraging news, make no mistake that Aristocrat’s digital division is really the growth engine for the group.

Digital is the real driver for the ALL share price

“One key positive for the group to come out of COVID-19 has been the significant lift in demand for digital games,” added the Morgans.

“We expect ALL’s digital division to report ~24% (USD) revenue growth in FY20.”

UBS is also optimistic about digital gaming. It estimated that the industry grew by over 30% in the past month.

Why the Aristocrat share price is a “buy”

“For Aristocrat specifically, the digital division appears to be broadly holding share and we feel confident around the 1H21 consensus forecast for +16% growth,” said UBS.

“Looking at individual title performance, Evermerge is now Aristocrat’s second largest social gaming title (behind RAID) and continues to ramp.”

With digital powering ahead and land-based gaming turning the corner, now’s the time to be buying the stock. UBS’s rates the ALL share price as a “buy” with a price target of $34.25 a share.

Morgan’s target on the Aristocrat share price is $36.78 a share.

More reading

• The Hipages (ASX:HPG) share price jumped 16% after its IPO
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Best and worst ASX retail stocks to own in the COVID recovery
• The Soul Patts (ASX:SOL) share price just hit a 52-week high
• 2 ASX healthcare shares that have risen since Pfizer’s vaccine news

Motley Fool contributor BrenLau owns shares of Aristocrat Leisure Ltd. Connect with me on Twitter @brenlau.

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

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The hipages Group Holdings Limited (ASX: HPG) share price has had a mixed start to life as a listed company.

This morning the tech company’s shares landed on the ASX boards following the completion of its initial public offering (IPO) that raised $100.4 million at $2.45 per new share. This gave hipages a market capitalisation of approximately $318.5 million.

In early trade the hipages share price climbed as much as 16% to $2.85. However, it has since given back these gains and is currently trading flat at $2.45.

What is hipages?

hipages is a leading Australian-based online platform and software as a service (SaaS) provider that connects tradies with residential and commercial consumers. It currently has 36,000 tradies subscribed to the platform.

Based on the number of jobs posted, it is the leader in the on-demand tradie economy. The company notes that to date, over three million Australians have changed the way they find, hire, and manage trusted tradies with hipages.

The hipages IPO.

The company advised that its IPO received strong demand from a broad range of retail and institutional investors in Australia and New Zealand.

Its largest shareholder will be News Corporation (ASX: NWS) Australia, with a 25.7% interest. The media giant didn’t sell any shares under the offer and remains a committed and supportive strategic investor in hipages.

Approximately $40 million in gross proceeds was raised through the issue of new shares by the company. The net proceeds will be used to drive future growth through investment in its brand and technology platform, as well as its expansion into new channel and adjacent opportunities.

hipages Chair, Chris Knoblanche, commented: “Today marks an important step in our evolution with hipages well positioned to take advantage of powerful digital and community trends that will drive increased demand for our innovative solutions. We believe hipages has a significant role to play in improving the engagement of Australians with a wide range of trade services. My fellow directors and I are delighted to welcome our new shareholders to the register and thank existing shareholders for their ongoing support, as we embark on the next phase of our journey.”

hipages Co-Founder and CEO, Roby Sharon-Zipser, added: “With 1.4m jobs posted to our platform in FY2020, hipages is the leading online platform connecting consumers and tradies in Australia. Our listing today on the ASX represents an important milestone for hipages and its shareholders as it will enable us to entrench our sector leadership and drive further innovation that benefits both tradies and their customers.”

Outlook.

In its prospectus, hipages is forecasting FY 2021 total revenue of $53.9 million. This will be 15% higher than the prior year. Recurring revenue growth is expected to be 20%.

Pleasingly, the company has started the year strongly and is tracking ahead of its prospectus forecast.

During the first quarter of FY 2021, it delivered total revenue of $13 million, up 17% on the prior corresponding period. Recurring revenue grew 24% during the quarter.

Positively, management advised that October revenue growth has continued at similar levels.

More reading

• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Best and worst ASX retail stocks to own in the COVID recovery
• The Soul Patts (ASX:SOL) share price just hit a 52-week high
• 2 ASX healthcare shares that have risen since Pfizer’s vaccine news
• Brickworks (ASX:BKW) hasn’t cut its dividend for over 40 years

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 Cleanspace Holdings Ltd (ASX: CSX) share price is storming higher today following a positive trading update.

Shares in the respiratory protection equipment provider jumped to as high as $6.80 in opening trade. While shares have since retreated, the Cleanspace share price is still up 12% to $6.50.

In comparison, the All Ordinaries Index (ASX: XAO) is 0.2% lower to 6,639 points.

Let’s take a closer look at what Cleanspace announced today.

Trading update

According to the release, CleanSpace advised that business performance remains strong across key geographical areas in healthcare and industrial sectors. Its product sales mix is 77% healthcare and 23% industrial, and the company reports that geographical sales are evenly split between North America, Europe, and Asia Pacific.

The United States healthcare market saw continued growth in its VA, Sutter and Parkview hospital groups. The company reported that new deployments to community health services and a large dental group also supported its direct sales model.

In Europe, the company has been busy providing personal protection equipment and offering healthcare services. This is due to the second wave of COVID-19 that has locked down the United Kingdom, Germany, France and Spain. Cleanspace built an industrial base in Europe, in which it sees attractive growth opportunities.

Across the Pacific, Australia and Singapore saw demand stabilise with purchases for protection considered for the long term. In Japan, Philippines and Indonesia, strong sales are continuing to flow.

Operations update

Cleanspace said it has set up production teams at its new facility, and remains on track to ramp up operations. It expects the facility to deliver over $100 million in capacity capabilities per year. In addition, Cleanspace noted that supply chains and outbound logistics are well positioned to respond to global demand.

Upgraded guidance

Up to the end of October, Cleanspace reports that sales have been robust and are tracking well ahead of expectations. The company upgraded its forecast for the first half of FY21 and anticipates revenue to be in the range of $34 million to $36 million.

Furthermore, earnings before interest, tax, depreciation and amortisation (EBITDA) for the full six months is predicted to be between $14 million and $16 million.

Consumable sales are currently 45% of total sales and are broadly in line with the previous year, and the current forecast.

What did management say?

Cleanspace executive director and CEO Mr Alex Birrell commented:

The upgrade in the forecast reflects work done to leverage our existing markets and expand the base with new customers. Deeper market penetration strengthens the business for a post COVID-19 environment and reinforces CleanSpace as best practice respiratory protection that offers significant benefits including higher protection, greater user comfort and cost effectiveness.

While Australia has managed to achieve no new COVID-19 cases and low community transmission, other regions are now experiencing second waves. A vaccine in the market will signal the return of growth in economic markets and industrial sectors where we have consistently seen 30%-40% growth, while the impacts of COVID-19 on hospitals has delivered a permanent change in mindset towards PPE, and protection of healthcare workers, in the hospital setting.

More reading

• Sky Network (ASX:SKT) share price shoots 6% higher on upgraded guidance
• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• ASX 200 Weekly Wrap: US election special
• Why the Dubber (ASX:DUB) share price is soaring 8% today
• Why the Encounter Resources (ASX:ENR) share price is up 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. 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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National Tyre & Wheel Ltd (ASX: NTD) shares rocketed up after the company reported that its trading for the first four months of FY21 had exceeded expectations. The update at today’s annual general meeting (AGM) sent the National Tyre share price up by almost 15% to 86 cents in early trade. Shares are now trading at 85 cents, up 13.33%. 

Highlights from the AGM

National Tyre advised that earnings before interest, tax, depreciation and ammortisation (EBITDA) for the half year to 31 December 2020 is now expected to range between $11.5 million and $12.5 million.

The company said it expected the strong performance to continue in the second-half of FY21.

National Tyre shareholders were told that the tyre industry was proving resilient, despite COVID-19-related challenges. However, Asian suppliers have advised that import prices will rise by 1% to 3% over the coming months.

National Tyre also pointed to several short term tailwinds facing the company. These include adverse agricultural conditions, weak truck movements across the country, and the still-depressed domestic travel industry. The company said that consumer demand remained difficult to predict amid the uncertainty surrounding the pandemic.

A quick take on National Tyre

National Tyre distributes motor vehicle tyres, wheels, tubes and related products. It focuses on tyres and wheels that fit passenger cars, SUVs 4WDs, light commercial vehicles, caravans and trailers.

More reading

• Why Fortescue, Nearmap, Saracen, & Westpac shares are dropping lower
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher
• Bailador (ASX:BTI) share price jumps 12% on Straker update
• Why the EVZ (ASX:EVZ) share price shot up 70% this morning
• The Nearmap (ASX:NEA) share price is up and down today. Here’s why.

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) is on course to end its winning streak on Thursday. In afternoon trade the benchmark index is down 0.25% to 6,434 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price has fallen 4% to $16.61. This is despite there being no news out of the iron ore producer today. In fact, not even a bullish broker note out of Macquarie has been able to support its shares. Macquarie has retained its outperform rating and $20.00 price target on the company’s shares following its annual general meeting update.

Nearmap Ltd (ASX: NEA)

The Nearmap share price has fallen 3% to $2.41 following the release of its annual general meeting update. At its event, the aerial imagery technology company provided guidance for annualised contract value (ACV) in FY 2021. Management expects to deliver ACV of between $120 million and $128 million this year. This compares to the ACV of $106.4 million it achieved in FY 2020. The company also reiterated its target of 20% to 40% annual ACV growth over the medium to long term.

Saracen Mineral Holdings Limited (ASX: SAR)

The Saracen share price has continued its slide and is down a further 3% to $5.27. Investors have been selling Saracen and other gold miners this week after a sharp pullback in the gold price. It isn’t just Saracen that is under pressure today. The S&P/ASX All Ordinaries Gold index is down 1.2% at the time of writing.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is down 2% to $18.38. Today’s decline appears to have been driven by profit taking from some investors following strong gains in the banking sector this week. Prior to today, the Westpac share price was up 5.5% since the start of the week.

More reading

• The Nearmap (ASX:NEA) share price is up and down today. Here’s why.
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• 5 things to watch on the ASX 200 on Thursday
• Where you could invest $20,000 into ASX shares today
• An insider just bought $355,000 worth of Westpac (ASX:WBC) shares

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) looks set to end its winning streak. At the time of writing, the benchmark index is down 0.3% to 6,431.8 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

InvoCare Limited (ASX: IVC)

The InvoCare share price has climbed 3.5% to $11.91 after announcing two new acquisitions. The funerals company has entered into conditional sales agreements to acquire 100% of the shares of Family Pet Care and the business and assets of Pets in Peace for a combined price of $49.8 million. The acquisitions are forecast to deliver combined annual revenue of ~$19.3 million and be earnings per share accretive in the first full year of operation.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine Entertainment share price is up 4.5% to $2.46 following the release of a trading update. That update revealed that the media and entertainment company expects its first-half earnings before interest, tax, depreciation and amortisation (EBITDA) to be up by around 30% compared to the prior corresponding period.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is up 4.5% to $3.13. Investors have been buying the telco giant’s shares after it announced a potential restructuring of the company to create three separate legal entities. Telstra believes the restructure would enable it to take advantage of potential monetisation opportunities for its infrastructure assets. These are expected to create additional value for shareholders. In addition to this, Telstra has reconfirmed the FY 2021 guidance.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is up over 2.5% to $48.88. This follows the release of the conglomerate’s trading update this morning. That update revealed that Wesfarmers has started the year very positively, with strong sales growth being achieved across much of the company. The Bunnings business has achieved sales growth of 25.2% for the first four months of FY 2021. This has been supported by a 23.4% increase in Officeworks sales and a 114.4% jump in Catch sales.

More reading

• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Best and worst ASX retail stocks to own in the COVID recovery
• Nine (ASX:NEC) share price surges after AGM update
• Wesfarmers (ASX:WES) share price on watch after FY 2021 trading update
• Telstra (ASX:TLS) share price on watch after major update

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

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The Bailador Technology Investments Ltd (ASX: BTI) share price shot up this morning, climbing 12.38% to $1.18 before falling back to $1.12 at the time of writing. This came after the company released an update about its investment in Straker Translations Ltd (ASX: STG).

What did Bailador announce?

Bailador updated the market on the flow-on effect of Straker’s agreement yesterday to become a strategic translations service provider for global tech giant IBM (NYSE: IBM). The deal with IBM resulted in a significant increase in the Straker share price.

According to Bailador, the value of its investment in Straker has increased in value by 61% since its last valuation on 31 October 2020. This has boosted Bailador’s net tangible assets (NTA) by 3.2% compared to its report on 10 November 2020. At that time, Bailador had a pre-tax NTA of $1.37.

The Straker share price has increased slightly today, trading up 0.63% at $1.60, which may have a further positive effect on Bailador’s NTA.

About the Bailador share price

Bailador is an investment company that invests in the information technology sector. It has been listed on the ASX since 2014. 

In FY2020, Bailador posted a loss after tax of $4.12 million, compared to a profit after tax of $17.05 million in FY2019. The company saw a 1% net decrease in the value of its portfolio of assets in FY2020.

Bailador paid a special dividend of 2.5 cents per share in February 2020.

The Bailador share price is up 132.65% from its 52-week low of 49 cents, and up 1.79% since the beginning of the year. Bailador shares have also increased 16.33% since this time last year.

More reading

• ASX 200 surges again on Wednesday
• Why CBA, Straker, Woodside, & Xero shares are surging higher
• Why the Straker Translations (ASX:STG) share price is rocketing 37% higher today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Straker Translations. 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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Engineering services group EVZ Limited (ASX: EVZ)‘s shares are on the move after the company issued an earnings guidance for the first half of FY21 this morning. Immediately after the announcement, the EVZ share price surged by 7.5 cents to 18.5 cents, representing a gain of almost 70%.

What made the EVZ share price shoot the moon?

In the announcement, EVZ forecast earnings before interest, depreciation and amortisation (EBITDA) of between $3 million to $3.5 million for the six months ending 31 December 2020. The company predicts revenue to finish between $30 million and $32 million.

EVZ says that the forecast is a significant improvement on the disappointing results posted for the corresponding period in FY20, when it posted a net loss of $2.8 million on sales of $66.2 million.

Chief executive Scott Farthing said, “This result marks a significant return to profit for the EVZ Limited group of companies as our businesses continue to deliver value for our clients and shareholders in the construction, energy and fuel sectors.”

What does EVZ do?

EVZ Limited (EVZ) is an industrial engineering company that provides solutions to industrial companies. The company has three operating divisions: engineering (Brockman Engineering), power (TSF Power), and water (Syfon Systems). It operates in Australia and Asia. 

How has the EVZ share price performed in 2020?

Before today’s announcement, EZV’s share price had lost 40%. It is currently trading at 18.5 cents, an almost 70% increase against yesterday’s close. The company commands a market cap of $10 million.

More reading

• The Nearmap (ASX:NEA) share price is up and down today. Here’s why.
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Azure (ASX:AZS) rockets 23% after drilling update
• Best and worst ASX retail stocks to own in the COVID recovery
• Why the SEEK (ASX:SEK) share price just hit a record high

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 Nearmap Ltd (ASX: NEA) share price has the wobbles today following its annual general meeting and FY21 guidance. At the time of writing, shares in the aerial imagery specialist are trading flat at $2.48 after dropping as low as $2.45.

Let’s take a closer look at what was said in its annual address to shareholders, and its outlook for FY21.

Key highlights

During FY20, Nearmap completed a number of significant milestones.

Annualised contract value (ACV) surpassed 10,000 subscriptions, which saw the average revenue of each subscription rise more than $10,000. This was achieved despite COVID-19 challenges, which resulted in a small loss of customers in the North American market.

After the successful introduction of wide-scale 3D content in FY19, the release of artificial intelligence content expanded Nearmap’s product offering. The premium subscription service helped drive revenue growth, with enterprise sales across multiple industries.

In North America, ACV grew 27% and is becoming a larger part of the company’s total ACV portfolio. In addition, the company entered new geographical markets in Canada, capturing content to increase revenue streams.

The Australian and New Zealand business surged in the second-half of FY20, offsetting the softening demand experienced in the first-half. This was due to sales leaders focusing their efforts on expansion in the North American market. However, after a re-organisation of sales leadership, customer experience retention teams delivered improved performance. ACV increased 11% in FY20 and management advised that the ANZ segment continues to generate a steady flow of cash.

Fortunately for Nearmap, its business operations have not been impacted by COVID-19 as employees work remotely. In terms of cash management, the company made a number of small headcount reductions and cut salaries to all staff, ensuring continuity.

FY21 guidance

As momentum remains strong, Nearmap expects the end of FY21 to produce ACV of between $120 million and $128 million.

Management stated that forecasts are based on a constant currency basis and do not factor any unforeseen circumstances.

Furthermore, Nearmap will deploy around $10–$15 million in investment activities to support acceleration of ACV. The company is targeting between 20% and 40% ACV growth over the medium to long term, with underlying churn below 10%.

Nearmap share price summary

The Nearmap share price has been climbing higher since the dilution of shareholder value through a capital raising last month. Gaining more than 6% since the start of October, the company has been on the march to reach its former highs.

In June 2019, the Nearmap share price soared higher than $4. Today, shares can be bought for little over half the price at $2.47.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Where you could invest $20,000 into ASX shares today
• ASX 200 jumps 1.75% on Monday
• 2 top ASX tech shares to buy after the recent market turmoil
• Are these small cap ASX shares the next Kogan (ASX:KGN) and Nearmap (ASX:NEA)?

Aaron Teboneras owns shares of Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap 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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