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The Appen Ltd (ASX: APX) share price is having one of those not so good, very bad kinds of days. Appen shares are down 9% at the time of writing to $35.17 each. That’s a fairly steep decline for a single day’s trading, especially after the company’s share price dropped more than 11% just yesterday following Appen’s release of its full-year earnings for the 2020 financial year.

So what’s going on with the Appen share price?

What is Appen?

Appen is known as one of the ASX’s highest-flying tech shares, so much so that is is one of the A’s in the WAAAX shares – the ASX’s answer to the US FAANG stocks. Appen specialises in making human-annotated datasets. Basically, that means Appen makes data that helps computers understand human interaction in better ways. Its applications range from smart assistant’s like Siri and Alexa to speech-to-text dictation and translation services.

Why the Appen share price is plunging today

As I mentioned earlier, yesterday Appen reported its earnings to investors, and it didn’t go down too well. Despite the company posting 25% revenue growth, a 20% increase in profits and a 12.5% increase to its dividend, investors evidently expected better things. Appen shares opened more than 15% lower yesterday and had only recovered by 4.5% by the end of the trading day.

It seems investors have woken up this morning and decided that wasn’t enough. Perhaps today’s moves are traders taking a bit of profit off the table after buying in at market open yesterday. Perhaps it was decided that Appen’s numbers don’t justify the company’s price-to-earnings (P/E) ratio of 102. Or perhaps investors didn’t like that Appen only reaffirmed its guidance for FY21 rather than bumping its expectations up.

It’s hard to say exactly what is causing today’s second round of selling. But these things tend to happen from time to time with these lofty growth shares. There are (and have been for a while) a lot of expectations baked into Appen’s share price. When there is even a hint of a hiccup, these kinds of sell-offs are not uncommon for market darling growth shares.

Some perspective might be handy as well. Even after this week’s selling, Appen is still trading at levels we only saw a month or 2 ago right now. And back then, Appen was at record highs.

Is Appen a buy after this sell-off?

If you’ve been kicking yourself for missing out on Appen shares and are super-bullish on this company, then perhaps today’s plunge is a good time to buy. But personally, I still think Appen’s shares are priced to perfection, even after today’s sell-off. I’m not interested in paying a 3-digit earnings multiple for Appen, despite its pleasing growth rates. But if you are, then all luck to you!

More reading

• Brokers name 3 ASX shares to buy right now
• ASX shares are on track for new record highs. Here’s why…
• ASX 200 down 0.9%: Costa impresses, Harvey Norman profits grow, Appen downgraded
• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• 2 top ASX tech shares to buy and hold beyond 2025

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen 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 Pointsbet Holdings Ltd (ASX: PBH) share price has surged 77.62% today after the company announced a five year exclusive contract with NBCUniversal. At the time of writing, the Pointsbet share price is trading at $13.41 after closing yesterday’s session at $7.55. Under the contract, Pointsbet will become the official sports betting partner of NBC Sports in the United States. The partnership provides access to leading national and regional television and digital assets, with the largest sports audience of any US media company. 

What does Pointsbet do? 

Pointsbet is a corporate bookmaker operating in Australia and the US. The company has developed a scalable, cloud-based wagering platform through which it offers sports and racing wagering products. The partnership with NBC serves to accelerate Pointbet’s strategy to leverage the US sports betting and iGaming markets.

How has the Pointsbet share price been performing? 

The company reported strong growth across KPIs in FY20, which has seen the Pointsbet share price increase more than 1,000% from a March low of $1.19 to its current level. Turnover increased 103% to $1,152 million in FY20, while active client numbers increased 39% to 111,4000. Net revenues reached $75.2 million, up from $25.6 million in FY19. The Australian trading business delivered positive earnings before interest, taxes, depreciation and amortisation (EBITDA) for FY20 after only three years of operation and continued expansion in the US. 

Pointsbet’s US business 

Investors have been piling into the Pointsbet share price as the company has secured key partnerships with major US sports teams including the Detroit Tigers, Indiana Pacers, Colorado Avalanches, Denver Nuggets and Colorado Mammoths. In FY20, Pointsbet launched online operations in Iowa and Indiana, and had licenses approved for Illinois and Colorado. iGaming is preparing for launch in Michigan, New Jersey and West Virginia. The deal with NBCUniversal is expected to be transformational and drive significant financial benefits. 

The US online sports betting market is estimated to be worth $27 billion and is growing rapidly. The US iGaming market is estimated to be worth $30 billion at maturity. Growth in this market will be driven by the NBC partnership, which gives Pointsbet exclusive rights to promotional enhancements and integrations on television and digital platforms. 

Pointsbet CEO, Sam Swanell, said:

NBC Sports, an iconic brand and holder of the largest sports audience in the US, brings significant credibility and trust to Pointsbet’s operations. Through the NBC Sports partnership, Pointsbet gains access to market-leading broadcast assets which span 184 million viewers and digital assets which span 60 million monthly active users. These assets will act as the cornerstone of our marketing strategy and ….will deliver outstanding client acquisition and retention efficiency as we scale rapidly over the next five years. 

More reading

• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher
• Pointsbet share price on watch as FY20 revenue triples
• Why Pointsbet is a top ASX growth share to buy right now
• How investing in ASX shares could help you grow $10,000 into $100,000
• Pointsbet share price on watch after ANOTHER new partnership

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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 Village Roadshow Ltd (ASX: VRL) share price has fallen today following the company’s release of its preliminary full year result to 30 June 2020. At the time of writing, the Village Roadshow share price has edged 0.47% lower to $2.10 after closing yesterday’s trade at $2.11. 

What did Village Roadshow report?

Investors are today driving the Village Roadshow share price lower after the company reported that income from operations was down 21.5% to $786.18 million. Village Roadshow stated that income had been affected by the closure of its cinemas and theme parks as a result of the coronavirus pandemic.

The company posted a net loss after tax of $117.35 million. While expenses were down compared to the 2019 financial year, Village Roadshow’s drop in revenue resulting from COVID-19 led to it reporting a loss in FY2020. Village Roadshow stated that cost cutting measures were introduced in the fourth quarter of the financial year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were $82.9 million in the 2020 financial year compared to $124.9 million in the 2019 financial year.

Village Roadshow had net debt of $278.3 million at 30 June 2020. Covenants with the company’s lending group related to trading performance were waived and will not be tested until 30 March 2021. 

Village Roadshow’s board resolved not to pay a dividend for the 2020 financial year.

When commenting on the outlook for FY 2021, the company stated that theme parks are restricted to 50% capacity as a result of coronavirus and that all cinemas in Victoria are currently closed while other cinemas are trading with social distancing rules in place. As a result, Village Roadshow expects to receive lower operating cash flows in FY2021.

In its annual report, Village Roadshow stated, “VRL is currently  operating on a negative cash basis and expects this will continue for several months.”

The company also advised that it had received a debt facility of $70 million to support it during the first half of FY 2021.

About the Village Roadshow share price

Village Roadshow is an entertainment company that operates cinemas and theme parks in addition to its film production and film distribution businesses. It was founded in 1954 and has since grown into an iconic Australian company. 

The Village Roadshow share price has increased 172.7% since its 52-week low of 77 cents, however, it is down 45.03% since the beginning of the year. The Village Roadshow share price is down 13.22% since this time last year.

More reading

• Village Roadshow locked in a capital raise as it secures new $70m facility

Motley Fool contributor Chris Chitty 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 A2 Milk Company Ltd (ASX: A2M) share price may be under pressure today following heavy insider selling, but not all executives have been selling shares this week.

The Polynovo Ltd (ASX: PNV) share price is storming higher on Friday after revealing a significant purchase of shares from an insider.

At the time of writing the medical device company’s shares are up an impressive 11% to $2.25.

What did PolyNovo announce?

This morning the medical device company released a change of director’s interests notice which revealed that its chairman has taken advantage of recent share price weakness to add to his holding.

According to the notice, David Williams bought 500,000 shares through an on market trade on 27 August for an average of ~$2.04 per share. This equates to a total consideration of approximately $1,020,000.

Following the purchase, Mr Williams owns a total of 18,500,000 PolyNovo shares.

FY 2020 performance.

Judging by this purchase, it appears as though the chairman is confident the company will build on its performance in FY 2020.

For the 12 months ended 30 June 2020, the dermal regeneration solutions-focused medical device company delivered sales revenue growth of 104% to $19.1 million.

Management advised that this was driven by strong growth across all markets, but particularly in the United States. Thanks to the increasing popularity of its NovoSorb BTM product, the US business delivered a record quarterly sales result in the March quarter. It then followed this up with a 36% increase in sales during the June quarter.

Pleasingly, the company advised that it has been building a solid revenue base in trauma, reconstructive surgery, hand surgery, necrotising fasciitis, and general surgery. Furthermore, its Burn sales are also strong, with significant account penetration in accredited burn centres in all regions.

This appears to have positioned the company perfectly for more of the same in the year ahead.

More reading

• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher
• Polynovo share price sinks lower despite doubling sales in FY 2020
• Mesoblast share price on watch after US regulatory approval
• Down 37% in 2 days! Is the Mesoblast share price a buy?
• Is the CSL share price the best ASX biotech buy right now?

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 POLYNOVO FPO. The Motley Fool Australia owns shares of A2 Milk. 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 LiveHire Ltd (ASX: LVH) share price is climbing today after the company released its results for FY 2020. At the time of writing, the LiveHire share price is up 5.63% to 37.5 cents after closing yesterday’s session at 35.5 cents.

What LiveHire does

LiveHire operates a cloud-based, online human resources productivity platform for sourcing and recruitment teams. It aims to deliver talent on demand for companies of all sizes.

LiveHire currently has 112 enterprise clients consisting of 105 across Australia and New Zealand and 7 in North America. The company has operations in all three major workforce markets. These include direct sourcing of contractor talent, internal mobility and redeployment of existing employees, and recruitment of new employees.

What’s driving the LiveHire share price?

FY 2020 was a big year for LiveHire as it entered the North American market and continued growing its revenue. Investors are driving up the LiveHire share price after the company reported solid revenue growth year on year (YOY) of 31.8% to $3.45 million. Of this, 84% of revenue occurred via recurring streams demonstrating strong customer satisfaction.

Another important metric to track with software-as-a-service (SaaS) companies is annual recurring revenue (ARR). This provides a 12-month forward view of recurring revenue, demonstrating the company’s future prospects. On this front, the hiring company posted strong YOY ARR growth of 38% that was delivered mainly via Australian direct sales.

In terms of client growth, there were 43 client wins in the period across a range of industries, thus closing the year with 112 clients, which equated to a 42% increase. LiveHire is building a pipeline of clients through direct sales in Australia and partnerships in both Australia and the United States, with a focus on new client wins in both markets.

Some other highlights of the report included the growth in cash receipts up to $4.5 million, representing 43% YOY growth. This left LiveHire with a strong balance sheet and a cash balance of $21 million with no debt. As such, the company remains well funded to continue future growth opportunities.

Furthermore, the company’s business restructure has been completed following its accelerated software development phase in FY 20 to open up international markets.

What now for the LiveHire share price?

Looking forward, LiveHire aims to use its recent US expansion to boost revenue. The US expansion, through its channel partners, should bring speed to revenue generation via the direct sourcing market. The revenue stream will grow as more customers are won and each contract ramps up to its full deployment. The LiveHire share price is currently trading 63% higher for 2020. If its expansion efforts continue to be successful, there is no reason why the LiveHire share price won’t go on climbing. 

More reading

• Village Roadshow share price lower on $100 million loss
• Polynovo share price rockets higher on insider buying news
• Hansen Technologies share price rockets 19% higher on FY20 results
• A2 Milk share price lower after Chairman, CEO, COO, and other execs sell millions of shares
• ASX shares are on track for new record highs. Here’s why…

Motley Fool contributor Daniel Ewing 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 Hansen Technologies Limited (ASX: HSN) share price has shot for the stars today after the company released its FY20 results.

The Hansen share price is trading at $3.80, up 19.5% at the time of writing, after reaching an impressive high of $3.88 in morning trade today.

How did Hansen perform in FY20?

For the six months ending 30 June 2020, the leading global provider of software and services to the utilities and communication sectors reported a strong result for its full-year earnings.

Hansen reported a record revenue of $301.4 million, up 30% compared to the prior corresponding period. This was underpinned by a negligible impact from customers during COVID-19.  Increasing revenues of company owned IP of 97% and strong new logo wins contributed to organic revenue growth.

Underlying net profit after tax excluding amortisation jumped to $47.7 million, a surge of 41%.

Reported earnings before interest, tax, depreciation and amortisation (EBITDA) expanded to $80.7 million. A 34% improvement and 26.8% margin on FY19 results. This was due to the integration of its Sigma business together with the rationalisation of the company’s low-cost base driven by COVID-19.

The strong revenue and EBITDA performance allowed Hansen to generate a positive cash flow from operating activities of $44.2 million. In turn, the company repaid creditors $34.9 million to reduce its net debt position to $116.5 million.

Earnings per share leapt 40% to 23.9 cents.

The company strengthened its balance sheet with cash on hand of $44.4 million.

The Hansen board declared a partially franked dividend of 7 cents per share to be paid on 25 September.

What did management say?

Hansen’s founder and CEO, Andrew Hansen said:

The FY20 result was a record result for Hansen across all key metrics, delivered against the backdrop of a global pandemic and the associated uncertainty. It makes me very proud to deliver to our shareholders an outcome like this. As I reflect on the second half of 2020, with our staff working from home and our customers looking to us for reassurance that their systems would not falter, the outstanding team work of the company’s global staff delivered the outcomes our customers were looking for.

This result proves the long-term resilience of our business model of growing revenues and EBITDA … by the value accretive aggregation of strategically targeted businesses.

FY21 outlook

Due to the economic uncertainty that COVID-19 has caused, the company did not provide any earnings guidance for FY21.

However, the board will update the market with the company’s ongoing progress in the first half-year of results.

Management remained cautious during the short-term with an exciting outlook ahead. Specific items of focus for 2021 include developing cross-selling opportunities into the energy market, and leverage of investment in Sigma’s intellectual property. Furthermore, Hansen aims to improve customer delivery and group margins through its low-cost development centres.

About the Hansen share price

The Hansen share price has made a stunning recovery of late, rising 46% from its low of $2.62 reached in April.  For the calendar year, the Hansen share price is trading up almost 10%.

More reading

• Village Roadshow share price lower on $100 million loss
• Polynovo share price rockets higher on insider buying news
• LiveHire share price 6% higher on strong revenue growth
• A2 Milk share price lower after Chairman, CEO, COO, and other execs sell millions of shares
• ASX shares are on track for new record highs. Here’s why…

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hansen Technologies. The Motley Fool Australia has recommended Hansen Technologies. 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 A2 Milk Company Ltd (ASX: A2M) share price has come under pressure today and is dropping lower.

In afternoon trade the fresh milk and infant formula company’s shares are down 2.5% to $17.55.

Why is the a2 Milk Company share price dropping lower?

As well as general market weakness, investors have been selling the company’s shares after it revealed heavy insider selling following its full year results release.

According to a change of director’s interests notice, the company’s Chair and Non-Executive Director David Hearn has offloaded a large number of shares this week.

The notice reveals that Mr Hearn sold 250,000 of the company’s New Zealand listed shares through an on market trade on 24 August for an average of NZ$20.31 per share (~A$18.57). This represents a total consideration of NZ$5,077,500 or approximately A$4,642,500.

It also represents 19.1% of the chairman’s holding, reducing his stake down from 1,305,000 shares to 1,055,000 shares.

More selling.

Mr Hearn isn’t the only seller of shares. In a series of other notices filed with the NZX, and not the ASX, it was revealed that the company’s chief executive has been selling shares as well. Geoffrey Babidge sold 100,000 shares on market on 24 August.

But the biggest seller of all has been the Asia Pacific chief executive, Peter Nathan. After exercising 800,000 options at NZ$0.63 per option on 19 August, he swiftly sold 750,000 shares between 24 August and 26 August for an average of NZ$20.12 or a total consideration of almost NZ$15.1 million. He is left owning 100,000 shares.

Joining the selling was Chief Growth and Brand Officer Susan Massasso and Chief Operations Officer Shareef Khan.

Massasso offloaded 541,391 shares through on market trades. Whereas Khan exercised 400,000 options for NZ$0.63 and then promptly sold 200,000 shares for NZ$19.87 per share.

No explanation was given for the share sales, which is disappointing given the magnitude of these transactions.

More reading

• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• These ASX ETFs will give you exposure to China’s growing middle class
• Where to invest $5,000 into ASX shares immediately
• 3 big surprises from the a2 Milk Company full year results
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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Rising inflation, historically, hasn’t spelled good news for ASX share prices.

That’s because when inflation goes up, central banks tend to raise interest rates. And when the cost of money goes up, less gets borrowed and more gets parked in savings accounts. Or it finds its way into bonds, since yields increase when interest rates rise.

That usually spells slower growth for share markets.

Just look at the meagre performance of share prices in the United States and Australia in the latter half of the 1970s when both nations saw inflation spike towards 15%. That ushered in large increases in interest rates to drive inflation down.

But over in the US, Federal Reserve chair Jerome Powell just moved the goal posts.

More reasons to be long-term bullish on ASX share prices

Yesterday, overnight Aussie time, Powell addressed the Economic Policy Symposium in Jackson Hole, Wyoming. To paraphrase, he modified the Fed’s policy of targeting a 2% annual inflation rate to one that will pursue an average rate of 2% ‘over time’.

Since US inflation has been below 2% for much of the past decade, Powell has opened the door to accepting higher inflation without raising interest rates.

Now the figures they’re throwing around are inflation rates of 2.5% or perhaps 3% – nothing like what we experienced in the 70s. And indeed, those figures are in line with the Reserve Bank of Australia’s own inflation target of 2-3%.

But that’s still great news for US and ASX share prices.

Why?

Because Australia’s latest quarterly inflation figures came in at -0.3%. Which gives our government and the RBA plenty of wiggle room to continue their accommodating fiscal and monetary policies before needing to hike interest rates.

And the US is now prepared to keep interest low in the face of inflation rising above its target range. All this while both governments (and most governments across the globe) are pouring trillions of dollars into their economies, much of which will continue to find its way into the share markets.

Looking ahead

Now it’s certainly possible (likely even, I’d say) that somewhere down the road inflation will rise significantly higher than 3%. That would see central banks eventually hiking rates again. But it’s hard to envision that happening any time soon.

In the meantime, gradually higher inflation with no move in nominal interest rates means the real (inflation adjusted) rates for cash and debt will go even lower. Negative even. And there’s nothing share markets like more than an abundance of easy money.

Indeed, the S&P 500 Index (INDEXSP: .INX) and the Dow Jones Industrial Average (INDEXDJX: .DJI) posted gains yesterday. Though the Nasdaq Composite (INDEXNASDAQ: .IXIC) gave back some its record new highs from the previous days.

So what about the ASX?

Well, ASX shares are losing ground today as well, with the S&P/ASX 200 Index (ASX: XJO) down 0.8% in late morning trade.

But these are daily moves. And a few big losses from stocks like the Appen Ltd (ASX: APX) share price down 8.9%, and the Regis Resources Limited (ASX: RRL) share price down 4.4% are offsetting the day’s big gainers, like the Costa Group Holdings Ltd (ASX: CGC) share price up 8.5%.

With a mid to longer-term view (1-2 years), the low interest rate environment coupled with record government stimulus should see ever more money find its way into the share markets.

Cover your ASX shorts!

That message appears to be gaining traction with short-sellers. Those are investors who bet against share price gains, so they lose money when share prices rise.

According to data compiled by Bloomberg and the Australian Securities and Investments Commission (ASIC), the total weighted short interest on the ASX 200 yesterday stood at 1.67%. That’s the lowest percentage of bets against share price gains since November 2017. And it’s down 25% since the COVID-19 driven market rout.

Commenting on the data, Jun Bei Liu, a portfolio manager at Tribeca Investment Partners Pty, said:

Earnings expectations have been very low for some sectors so there was risk management heading into the reporting season, and so far we have seen quite a few big moves to cover shorts when results weren’t as bad as expected.

Not surprisingly, health care shares rank among the least shorted.

As for the most shorted, Bloomberg data ranks Webjet Limited (ASX: WEB) number one, at 14.95%. Corporate Travel Management Ltd (ASX: CTD) comes in a close second at 12.3%.

Both shares have already been hit hard by the shutdown in global and domestic travel. And while they could go lower from here, I believe longer-term, both should see strong share price gains as borders reopen and people begin flying again.

More reading

• ASX 200 down 0.9%: Costa impresses, Harvey Norman profits grow, Appen downgraded
• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher
• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• Costa share price in focus following half year results
• Why I like the Vicinity Centres share price today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, COSTA GRP FPO, and Webjet Ltd. The Motley Fool Australia owns shares of Appen 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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Shares in Avita Thereapeutics Inc (ASX: AVH) surged nearly 15% higher following the company’s release of its annual report for FY20. The Avita share price soared to $7.10 at the opening bell before being sold down to a more modest gain of 9.34% at the time of writing.

What’s driving the Avita share price?

Investors have piled into the Avita share price this morning after the company released its FY20 results.

Avita’s report was headlined by a surge in revenue from its flagship Recell system. Avita reported that revenue from Recell increased 161% to $US14.3 million for FY20. The company highlighted that operations in the United States fuelled revenue growth, with sales for FY20 totalling $US13.8 million in comparison to $4.4 million the year prior. Avita also reported a slight increase in gross margin of 79% for the full year.

The Aussie biotech reported a 62% increase in operating costs for the full year of $US57.9 million. Avita attributed the increase to commercialisation activities for its Recell system and expansion of research and development. As a result, Avita reported a net loss after tax for FY20 of $US42 million, a 67% increase on the year prior.

In addition, Avita provided an update on its cash position. For FY20, the company noted $US73.8 million cash on hand and expects to utilise its cash reserves until sales in the US reach a sufficient level. The Avita share price has responded positively to the update despite the company not declaring a dividend for FY20. 

What is the outlook for Avita?

Avita Therapeutics is a regenerative medicine company that aims to address unmet medical needs in burns, chronic wounds and aesthetics. The dual-listed company was co-founded by plastic surgeon and former Australian of the Year, Dr Fiona Wood AM.

The company has a collection of patented and application technologies that provide regenerative treatments. Avita’s flagship Recell system is used to prepare spray-on skin cells using a small amount of a patient’s own skin. The Recell system was approved by the US Food and Drug Administration (FDA) in September 2018 and is indicated for use in the treatment of acute thermal burns in patients 18 years and older. 

Despite recording a widening loss for FY20, Avita remains optimistic on its long-term outlook. In a recent corporate update, Avita reported that July saw the highest monthly sales for its Recell system in the United States since launching in January 2019.

Foolish takeaway

At the time of writing, the Avita share price is trading more than 9% higher for the day at $6.77. The Avita share price has struggled in 2020, trading nearly 47% lower for the year.

More reading

• If you invested $50k in these ASX shares 3 years ago, you’d be a millionaire today
• These ASX medical shares fell double figures in July – are they a buy?
• These were the worst performing ASX 200 shares in July
• These were the worst performing shares on the ASX 200 in July

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is trading notably lower amid declines across most sectors. The benchmark index is currently down 0.9% to 6,070.6 points.

Here’s what has been happening on the market today:

NEXTDC hits its guidance.

The NEXTDC Ltd (ASX: NXT) share price is trading higher today after investors responded positively to its full year results release. In FY 2020 the data centre operator delivered a 14% increase in revenue to $205.2 million. This was at the high end of its guidance range of $200 million to $206 million. It was the same for its underlying EBITDA, which came in $19.5 million or 23% higher year on year to $104.6 million. Over the 12 months, NEXTDC’s contracted utilisation grew 17.4MW or 33% to 70MW.

Costa impresses for once.

The last few years have been difficult for Costa Group Holdings Ltd (ASX: CGC) and its shareholders. But it could finally be turning a corner now, judging by its half year results. The Costa share price is charging higher today after it reported a 6.8% increase in revenue to $612.4 million and a 12% lift in net profit after tax to $45.8 million. A strong performance by its International segment drove the solid profit growth.

Harvey Norman results.

The Harvey Norman Holdings Limited (ASX: HVN) share price has edged lower following the release of its full year results. This morning the retailer revealed a net profit after tax of $480.54 million. This was an increase of $78.22 million or 19.4% on FY 2019’s profit. The company declared a fully franked final dividend of 18 cents per share.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today has been the Costa share price with an 8.5% gain following its half year update. Going the other way, the worst performer is the Appen Ltd (ASX: APX) share price with a 7% decline. The artificial intelligence services company’s shares have come under pressure since the release of its half year results. This morning analysts at Credit Suisse downgraded them to an underperform rating with a $29.00 price target.

More reading

• ASX shares are on track for new record highs. Here’s why…
• Harvey Norman share price drops despite record FY20 results
• Why Costa, Flight Centre, Polynovo, & Pointsbet shares are storming higher
• Why a2 Milk, Appen, Huon, & Newcrest shares are tumbling lower
• Costa share price in focus following half year results

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of Appen 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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