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The Telstra Group Ltd (ASX: TLS) share price has been reasonably subdued over the last 12 months.

As you can see on the chart below, the telco giant’s shares are trading largely in line with where they were a year ago.

Is the Telstra share price undervalued?

Firstly, while investors like to use earnings per share or price to earnings multiples to value a share, this would be a mistake with the Telstra share price.

That’s because Telstra’s free cash flow has been and is expected to remain higher than its net profit. As a result, its earnings per share metric doesn’t accurately represent its financial performance.

For example, in FY 2022, Telstra reported net profit after tax of $1.8 billion but free cash flow of $4 billion.

Based on Telstra’s outstanding shares, this means that Telstra generated earnings per share of 15.3 cents in FY 2022.

As a result, on paper this makes it look like the Telstra share price is trading at 27x trailing earnings, which is reasonably expensive. However, on a free cash flow basis, the multiples it trades on are significantly lower.

What is Morgans saying?

According to a note out of Morgans, its analysts estimate that Telstra generated free cash flow (after lease payments) per share of 26 cents in FY 2022.

And while the broker expects Telstra’s free cash flow per share to fall to 20.8 cents in FY 2023, it believes it will still be 22% higher than the company’s earnings per share of 17 cents.

In light of this, it makes more sense to value Telstra’s shares on its free cash flow rather than its earnings.

Together with its belief that potential divestments could unlock value, this explains why Morgans thinks the Telstra share price is undervalued at the current level. It commented:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

Morgans has an add rating and $4.60 price target on Telstra’s shares. It is also expecting a 4% fully franked dividend yield in FY 2023.

The post Telstra share price is ‘undervalued’ right now: broker appeared first on The Motley Fool Australia.

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More reading

• Telstra shares: Here are the dividend forecasts for 2023 and 2024
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• 2 high-dividend shares to buy today for early retirement
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Tech turnaround: Expert picks 2 ASX shares to buy for a 2023 revival

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. 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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Local investors might be wondering where they can get a piece of Netflix Inc (NASDAQ: NFLX) shares on the ASX today.

Shares in the on-demand streaming service took flight in after-hours trading as investors flicked through the company’s fourth-quarter report. A mostly positive reception pushed Netflix shares 7.1% higher to $338.25 apiece, taking its 6-month gain to 56%.

Let’s take a look at what went down and one way of getting exposure via the ASX.

Eyes set on better times

If you were to only look at a few key metrics from Netflix’s latest result, you might wonder what everyone is getting so excited about.

In the Q4 2022 letter, it quickly becomes clear that the final three months of the year weren’t quite a homerun:

• Revenue grew increased 1.9% year on year to US$7,852 million
• Operation income fell 13% to US$550 million
• Operating margin decreased from 8.2% to 7%
• Net income plummeted 91% to US$55 million

An in-depth breakdown of the financials is shown below, courtesy of App Economy Insights.

Although, a positive to take from the quarter include the launch of Netflix’s ad-supported plan. While the company did not specify the exact details of its success so far, it is possible it partly fuelled the 7.7 million net member additions in Q4 — beating analyst estimates of 4.6 million.

The strong period for additions brought the streaming giant’s total global membership base to 230.75 million at the end of 2022. Yet another feather in the company’s cap bolstering the Netflix share price.

Where the enthusiasm really begins to shine is in the forward outlook. According to its release, Netflix intends to reaccelerate revenue growth in 2023.

The catalysts for this growth reinvigoration are expected to be the new ad-supported offering and the rolling out of paid sharing — the latter being a way for Netflix to monetise the popularity of password sharing.

Lastly, management is expecting to land US$3 billion in free cash flow in 2023. The tantalising proposition would be almost double the free cash flow achieved in 2022.

How can ASX investors get in on Netflix shares?

The easiest and most direct way to obtain Netflix shares as an Australian is to create an international trading account via a supporting broker. However, that can come with higher fees as the trade is not handled on the ASX.

Another way to gain some exposure to the Netflix share price via the ASX is to invest in the company through an exchange-traded fund (ETF). A popular option is the Betashares Nasdaq 100 ETF (ASX: NDQ), which tracks the performance of the 100 largest non-financial companies on the Nasdaq.

Be aware that while Netflix is the 17th largest position in the ETF, it’s still only a minute 1.2% weighting. The largest weightings are dominated by Apple Inc (NASDAQ: AAPL), Microsoft Corp (NASDAQ: MSFT), and Amazon.com Inc (NASDAQ: AMZN).

The post The Netflix share price just popped. Here’s one way to buy in on the ASX appeared first on The Motley Fool Australia.

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More reading

• 3 undervalued ASX shares that should be on your radar
• How I’d invest $40k in ASX shares and aim for $1 million
• How to avoid the biggest mistake in investing: expert
• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally
• US inflation is cooling: I’d buy these 3 ASX shares right now

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com, Apple, BetaShares Nasdaq 100 ETF, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon.com, Apple, and Netflix. 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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I’m sure we’d all like another source of income to add to our day jobs. And there is no better kind of secondary income than passive income.

Luckily for investors, ASX shares can be a great way to secure a secondary stream of passive income. Dividends from shares are truly passive – requiring zero effort aside from buying the shares themselves. So let’s discuss one ASX 200 blue-chip share that might be a great place to start: Wesfarmers Ltd (ASX: WES).

Wesfarmers is a giant of the ASX. This company has been around since 1914, and today is one of the largest businesses in the country. It boasts ownership of several high-profile retailers, including Target, OfficeWorks, Kmart and its crown jewel, Bunnings:

But Wesfarmers also has stakes in a vast array of other businesses. These include Covalent Lithium, Workwear Group, Priceline Pharmacies and Wesfarmers Chemicals, Energy and Fertilisers.

But let’s get down to how Wesfarmers shares could be a source of secondary, passive income.

How to use Wesfarmers shares for a secondary income

Wesfarmers is a dividend-paying company and has been for decades. However, Wesfarmers’ earnings base can be quite cyclical. Especially so considering this company is more active in the mergers and acquisitions space than most.

It was only in 2018 that Wesfarmers offloaded Coles Group Ltd (ASX: COL) from its portfolio, which substantially changed the company’s dividend profile.

But despite this, Wesfarmers is still a pretty solid long-term income share. In COVID-ravaged 2020, the company managed to fork out $1.70 in fully-franked dividends per share. This rose to $1.78 per share in 2021 and lifted again to $1.80 per share in 2022.

At the current Wesfarmers share price of $49.21 (at the time of writing), those latest dividends give Wesfarmers a trailing yield of 3.66%. That’s 5.23% grossed-up with the full franking.

Some ASX brokers expect Wesfarmers to keep the dividend pay rises coming over the next few years too.

So while Wesfarmers might not have the highest dividend yield on the share market today, it is still undoubtedly a solid dividend share and one that any investor can use to build up a secondary and passive source of income.

The post Wesfarmers shares: A potential source of secondary income appeared first on The Motley Fool Australia.

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More reading

• 2 of the best ASX dividend shares to buy right now: analysts
• Wesfarmers shares: Here are the dividend forecasts for 2023 and 2024
• With almost no investments at 30, can ASX shares still make me rich?
• Is Wesfarmers a ‘safe’ ASX 200 share to buy for dividends?
• Experts say these top ASX dividend shares are buys right now

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. 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 the week with the smallest of gains. In afternoon trade, the benchmark index is up a fraction to 7,436.6 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price is up 6% to $24.60. This follows the release of the medical device company’s FY 2023 guidance this morning. According to the release, the company expects full year operating revenue for the 2023 financial year to be within the range of approximately NZ$1.55 billion to NZ$1.60 billion. While this will be down slightly on FY 2022’s operating revenue of NZ$1.68 billion, it still appears to be better than feared.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up 8.5% to $4.36. Investors have been scrambling to buy this lithium miner’s shares following the release of a strong quarterly update. Pilbara Minerals’ production, sales volumes, lithium prices, and unit costs all improved quarter on quarter. It also revealed that it is swimming in cash. The company’s cash balance lifted from $1.375 billion at the end of September to $2.226 billion at the end of December.

Resolute Mining Ltd (ASX: RSG)

The Resolute share price is up 8% to 28 cents. This follows a decent rise in the gold price overnight. It isn’t just Resolute Mining that is rising today. Plenty of other ASX gold miners are climbing with it. This has seen the S&P/ASX All Ordinaries Gold index rise almost 2% on Friday afternoon.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up over 6% to $9.51. This morning, this coal miner released its second quarter update and revealed further strong prices. As a result, the company commanded a record high coal price for the first half. In light of this, management expects to more than quadruple its first half operating earnings.

The post Why Fisher & Paykel, Pilbara Minerals, Resolute, and Whitehaven Coal are storming higher appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares leaping more than 5% on strong earnings updates
• ‘In harvest mode’: Why the Pilbara Minerals share price is rocketing 8% higher today
• Whitehaven Coal share price charges higher on record half
• My top predictions for ASX 200 mining shares in 2023
• Pilbara Minerals share price on watch following Q2 update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last year was a rough one for equity markets around the globe, and the ASX wasn’t spared. The S&P/ASX 200 Index (ASX: XJO) plummeted more than 5% last year as key Wall Street indices entered bear market territory.

Fortunately, the tide appears to have turned in 2023, with the ASX 200 lifting 7% year to date.

And while pressures dragging on stocks haven’t yet abated, experts at ANZ Group Holdings Ltd (ASX: ANZ)’s private banking business appear optimistic there will be “ample opportunity” among ASX shares this year.

ANZ Private Banking head of investing strategy Lakshman Anantakrishnan commented on the bank’s 2023 Global Market Outlook, released yesterday, saying:

With challenges but also potential across most sectors in 2023, for investors, remaining nimble within portfolios might be most important of all. But there will be opportunities.

Here’s how the bank advises investors to dodge potential challenges to make the most of the new year.

A better year is upon us: ANZ

Inflation, growth concerns, and potential recessionary impacts will likely dint shares, including those on the ASX, this year as earnings look set to reflect the challenging environment. But ASX investors might find respite amid such struggles, according to Anantakrishnan. He said:

2023 will be hard pressed to outdo the challenges that financial markets faced in 2022, however this year is unlikely to be a smooth ride for investors …

Unlike 2022 there should be ample opportunity for investors this year — where and when remains the question.

The bank tips inflation to moderate as supply chains normalise as well as for China’s reopening to aid manufacturers and, hopefully, help Australia dodge a recession.

In a less positive vein, the impact of successive rate hikes should catch up with companies and consumers, lessening demand.

It tips shares to “test a new bottom” before any sustained rally occurs.

How might ASX investors make the most of 2023?

On that note, the first half might be rough for those invested in the market as consumers reject rising costs, thereby putting pressure on companies’ margins and potentially dinting valuations.

But, as the bank notes, back-to-back annual falls are a market rarity. That means the ASX’s 2022 tumble has likely set the stage for a recovery.

ANZ tips ASX shares to gain 8.2% annually between 2022 and 2032 and prefers the look of Aussie stocks over their New York-listed peers in 2023. Thus, the future appears bright for ASX investors.

Though, the current half could be a bleak one, according to ANZ, with the bank favouring bonds over shares in the period. Anantakrishnan continued:

We would look for any sell-off prior to an eventual pivot as an opportunity to build back equity exposure.

Conversely, any rallies in H1 are likely to be taken as further opportunity to reduce equities, before building back exposure once they have bottomed.

The post ANZ’s cheat sheet: How can ASX investors make the most of ‘ample opportunity’ in 2023? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares leaping more than 5% on strong earnings updates
• Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8%
• What could we expect for ASX 200 bank shares this earnings season?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing, the benchmark index is up 0.1% to 7,441.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Alumina Limited (ASX: AWC)

The Alumina share price is down 3% to $1.54. This appears to have been driven by a broker note out of Citi. According to the note, its analysts have downgraded the alumina producer’s shares to a sell rating and cut the price target on them to $1.50. This follows a disappointing quarterly update and the broker’s belief that alumina prices will be near breakeven levels, making it unlikely to pay a dividend.

Block Inc (ASX: SQ2)

The Block share price is down 2.5% to $102.22. This follows a poor night of trade for the payments company’s US listed shares. They fell on the NYSE overnight amid weakness in the tech sector. Investors appear concerned by comments from economists that China’s reopening could have an inflationary impact.

Liontown Resources Ltd (ASX: LTR)

The Liontown share price is down almost 13% to $1.31. Investors have been selling this lithium developer’s shares after it revised higher its capital costs estimate for the Kathleen Valley lithium project. The costs are now expected to be greater than its cash balance and debt facilities, which has sparked fears that a capital raising could be coming.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 5.5% to $4.84. This may have been driven by a broker note out of Morgans. This morning, the broker downgraded the infection prevention company’s shares to a hold rating with a $5.19 price target. The broker made the move on valuation grounds.

The post Why Alumina, Block, Liontown, and Nanosonics shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why is ASX 200 lithium share Liontown tanking 10% today?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• 3 ASX All Ords shares getting hammered on disappointing results
• Why Alumina, Netwealth, Nickel Industries, and Paladin Energy shares are falling today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block and Nanosonics. The Motley Fool Australia has positions in and has recommended Block and Nanosonics. 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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After a highly tumultuous year for the share market in 2022, there’s no shortage of ASX value shares right now. And investors can somewhat take their time in finding and researching them, given many of the experts think the chances of a genuine rebound or a new bull run any time soon are slim at best.

Indeed, if the United States goes into recession, ASX shares could definitely go lower than they are today.

But that’s all short-term stuff. Here at the Fool, we advocate buying high-quality ASX shares and holding them for the long term. Market downturns and corrections simply allow you to buy them cheaply.

Many good-quality mid-cap and large-cap shares are trading well under a 15 times price-to-earnings (P/E) ratio right now. That’s a good starting point in determining which ASX shares are undervalued.

Here we outline three ASX shares that could be considered undervalued within various contexts.

JB Hi-Fi Limited (ASX: JBH)

The electronics and home appliances retailer surprised the market by beating consensus estimates significantly in its preliminary FY23 half-year results released this week.

Despite market fears of inflation and interest rates potentially reducing consumer discretionary spending, JB Hi-Fi revealed record sales and earnings. Group sales increased 8.6% year-over-year to $5,278.5 million. Net profit after tax (NPAT) screamed 14.6% higher to $329.9 million.

As my colleague Mitch reported, management attributed the results to elevated demand for their products and well-executed Black Friday and Boxing Day promotions.

In terms of value, JB Hi-Fi is currently trading on a P/E of 10 times.

As we explain in our Education Centre, the P/E ratio measures the current share price against the company’s earnings per share (EPS). This provides insight, within context, as to whether a company is undervalued or overvalued. Generally, ASX shares with a P/E under 15 times are considered cheap.

A recent note out of Citi reveals its analysts have retained their buy rating and lifted their price target on JB Hi-Fi shares to $55. Morgans has retained its add rating with an improved $53 price target.

The JB Hi-Fi share price is currently $47.90, implying about a 13.5% potential upside for investors in 2023.

Lovisa Holdings Limited (ASX: LOV)

Lovisa was the top-performing ASX 200 retail share of 2022 with a 15% share price gain. Every other retail share in the benchmark index lost value last year. That says a lot about the resilience and future growth prospects of this affordable fashion jewellery and accessories business.

As my Fool colleague Cathryn reports, Lovisa does things differently to other ASX 200 retail shares.

As part of its vertically-integrated business model, Lovisa designs and manufactures all of its products in-house. This boosts Lovisa’s gross margins, which came in at a whopping 79% in FY22. Lovisa also has smaller stores, which means lower rents. This contributed to an FY22 EBITDA margin of 31%.

Lovisa is currently trading on a P/E of 47 times. On face value, that screams ‘overpriced’. But you have to take P/Es with a pinch of salt when it comes to young, up-and-coming companies.

An elevated P/E can also indicate market confidence about a company’s future. Sometimes investors are willing to overpay today if they expect strong earnings and share price growth in the future. And given Lovisa’s seemingly bright future at this point, some investors may see this one as ‘undervalued’.

As we recently reported, broker Canaccord Genuity has lifted its 12-month share price target on Lovisa by 22% to $27.75. Based on today’s share price of $25.64, that’s a potential 8% upside for investors in 2023.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

The ability to invest in 100 of the largest non-financial businesses on the US NASDAQ exchange is certainly appealing. Many of them are the No. 1 or No. 2 market leaders in their fields. Examples are Microsoft, Apple, Alphabet, Amazon.com, Tesla, Adobe, Intel, and Meta Platforms.

As you can see, there are a lot of tech companies in this exchange-traded fund (ETF). They lost a fair bit of valuation in last year’s tech sell-off as interest rates began to rise.

As my Fool colleague Sebastian reports, the Microsoft share price dropped almost 30%, Amazon lost almost 50%, the Alphabet share price declined almost 40%, and the Tesla share price sank 65%. Of course, this affected the NDQ share price, too.

Today, there are signs that US inflation is cooling, which might mean interest rates won’t go much higher and the world’s biggest economy could even avoid a recession. Either way — no matter what happens in 2023 or 2024 or even 2025 — we live in a high-tech age and this is a decades-long investment trend.

Current economic headwinds simply provide a buy-the-dip opportunity on an ETF that should arguably be a lifelong holding. The NDQ ETF is currently trading at a 24% discount to this time last year.

The post 3 undervalued ASX shares that should be on your radar appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $40k in ASX shares and aim for $1 million
• Here are the top 10 ASX 200 shares today
• Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead
• Top brokers name 3 ASX shares to buy today
• How to prepare your portfolio for the ‘old normal’: Scott Phillips

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Citigroup is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Amazon.com, Apple, BetaShares Nasdaq 100 ETF, Intel, Lovisa, Meta Platforms, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $57.50 calls on Intel, long January 2024 $420 calls on Adobe, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Adobe, Alphabet, Amazon.com, Apple, Jb Hi-Fi, Lovisa, and Meta Platforms. 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 a day where the S&P/ASX 200 Index (ASX: XJO) is up 0.25%, there are a few ASX 200 shares that are performing strongly.

With the period ending December 2022 now finished, businesses are giving some updates.

While some companies use this pre-February time to tell the market they’re underperforming against expectations, investors have been impressed by the following ASX 200 shares.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is currently up 9.8% after announcing its quarterly update for the three months to December 2022.

The ASX 200 lithium miner revealed its production had increased by 10% quarter over quarter to 162,151 dry metric tonnes (dmt).

The average realised spodumene concentrate sales price was US$5,688 per dmt, an increase of 33% quarter over quarter.

It also revealed its cash balance had increased by $851 million to $2.23 billion.

The company also reminded investors that it has seen improved pricing outcomes after negotiated price reviews with major offtake customers.

Whitehaven Coal Ltd (ASX: WHC)

As one of the major ASX 200 coal shares, Whitehaven is continuing to benefit from strong coal prices. The Whitehaven share price is up 7.3% after announcing its quarterly numbers today.

The company advised that in the three months to December 2022, a solid Narrabri performance and strong sales delivered a record half-year result, despite weather affecting open-cut operations.

Whitehaven achieved an average coal price of A$527 per tonne for the quarter, compared to A$581 for the three months to September 2022. In the three months to December 2022, it managed run-of-mine production of 4.8 mt, up 21% compared to the three months to 30 September 2022.

Subject to the final audit, Whitehaven expects to report that it made $2.6 billion of earnings before interest, tax, depreciation and amortisation (EBITDA) and $2.5 billion of operating cash flow. It finished December with $2.5 billion of net cash.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

Fisher & Paykel Healthcare is a designer, manufacturer and seller of products and systems for use in “acute and chronic respiratory care, surgery and the treatment of obstructive sleep apnea.”

The announcement today related to FY23 revenue guidance. The Fisher & Paykel Healthcare share price is trading 6.5% higher at the time of writing.

At current exchange rates, the ASX 200 healthcare share expects full-year operating revenue to be between $1.55 billion and $1.6 billion.

Management said it was seeing increased sales of its hospital hardware and consumables in China as the country manages its current wave of COVID.

The CEO also explained that the flu season starting early and the “prevalence of respiratory syncytial virus (RSV) also fuelled demand” for hospital consumables in North America in the final months of 2022. However, this “appears to be easing”.

On a global basis, the company said that hospital hardware revenue “continues to exceed pre-pandemic levels” and sales of OSA masks “have remained strong”.

The post 3 ASX 200 shares leaping more than 5% on strong earnings updates appeared first on The Motley Fool Australia.

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• ‘In harvest mode’: Why the Pilbara Minerals share price is rocketing 8% higher today
• Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8%
• Whitehaven Coal share price charges higher on record half
• My top predictions for ASX 200 mining shares in 2023
• Pilbara Minerals share price on watch following Q2 update

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price has fallen unceremoniously over the past year. How the tides have turned since the golden days of cheap lending.

Retracing the share price of this buy now, pay later provider during the last revolution of the sun tells a painful story. In a single 12-month stint, the once-popular name has morphed from a powerhouse to a pariah — taking the company’s shares 81% deep into a desolate abyss.

Yet the company’s annual revenues are at all-time highs.

So, could Zip shares rise from the ashes?

Can Diamond bring back the sparkle?

Once upon a time, investors admired Zip — and other BNPL offerings — for their breakneck revenue growth. It wasn’t long ago that Zip and Afterpay were duking it out for market attention, both presenting growth figures in excess of 100%.

Profits? They weren’t a concern… it was all about how fast could you grow and how much market share could you take.

Fast forward a few years and suddenly profits are… everything. There aren’t too many shareholders interested in sitting around another few years for a return. Inflation changed the formula, and now profits right now matter far more.

Unfortunately for Zip shareholders, it looks like the BNPL company is lacking both the desirable traits of the past and the present at the moment.

Despite the efforts made by CEO Larry Diamond and his team, Zip is still a far cry away from producing sustainable profits. Adding insult to injury, Zip’s prized growth rates are slowing as it attempts to strip out costs and chart a profitable course.

In the first quarter of FY23, the company reported quarterly revenue growth of 19%. Likewise, its total transaction volume (TTV) increased by 15% year-on-year. The deceleration is dizzying when you compare it to Q1 FY22 — revenue and TTV growth of 89% and 101%, respectively.

In my opinion, it’s going to be extremely difficult to slash costs, maintain growth, and turn a profit — all simultaneously — while arguably heading into a period of reduced consumer spending.

Zip shares: solution and the problem

To try and appease shareholders, Zip will need to make massive changes to the cost structure of the business. Or… it can simply raise more capital to fortify its $319.1 million cash balance at the end of September 2022.

While this might tide the company over for a little longer, it also comes at an invisible cost… dilution.

As the chart above shows, Zip shareholders have suffered significant dilution over the years. Between 2019 and now, shares outstanding have nearly doubled. This means the Zip share price would need to be around $6.90 to reflect the per-share value at the end of 2019, not the $3.53 it traded for at the time.

If Larry Diamond and the rest of the management team can pull it off without diluting shareholders into oblivion, I’ll be mighty impressed and have the utmost respect for the team.

However, before jumping into Zip shares, I’d wait to see proof of the turnaround.

The post Should I buy the dip on Zip shares right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This year has been good to the Flight Centre Travel Group Ltd (ASX: FLT) share price so far. The stock has gained 8% year to date.

But that’s not nearly enough to see the travel giant in the longer-term green. The stock is still more than 50% lower than it was prior to the start of the pandemic.

In the same breath, it hasn’t posted a profit since financial year 2019 (FY19). But that could be about to change.

The Flight Centre share price is currently $15.48.

Flight Centre’s profit crash

As anyone who watched the market crash amid the onset of the pandemic will know, it seemingly left no industry untouched. But I’d argue the travel sector was among the worst hit.

2020 saw borders slammed shut around the globe and Aussies urged to stay at home. It’s likely no surprise then, that Flight Centre’s profits went out the window.

The company scrapped its guidance in March 2020 and underwent a $700 million capital raise.

After recording a $343 million profit in FY19, it posted an $849 million loss for FY20, a $602 million loss for FY21, and a $378 million loss for FY22.

But the future looks brighter for Flight Centre’s bottom line. Let’s take a look at what this year might bring.

Good news for the ASX 200 travel giant’s bottom line

Flight Centre fans will be glad to know the S&P/ASX 200 Index (ASX: XJO) travel share has actually already returned to profit.

In fact, it was cash flow positive for the last few months of FY22, even breaking even in the second half.

And those figures have continued to improve. The company posted a $61 million underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) profit for the first four months of FY23 and broke even on a pre-tax profit basis.

Though, the market has yet to receive an earnings report in which the company is operating in the green. The company’s not expected to post its first-half earnings until next month.

Flight Centre recently tipped its first-half underlying EBITDA to come in between $70 million and $90 million.

The post Is 2023 Flight Centre’s year to return to profit? appeared first on The Motley Fool Australia.

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• The Flight Centre share price has made a flying start to 2023! Should I buy?
• Here are the 10 most shorted ASX shares
• Could ASX 200 travel shares be set for a major boost in 2023?
• Should I buy Flight Centre shares for spectacular dividend growth?
• Here are the 10 most shorted ASX shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. 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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