Apple topples record + Small-cap tech players – BUD, ARQ

  • Dec 27, 2019 AEDT
  • Team Kalkine
Apple topples record + Small-cap tech players – BUD, ARQ

Technology sector is one which is engaged in development and distribution of technology-based goods and services. This sector is again in limelight owing to cloud computing and artificial intelligence. There are three major groups which are under the technology sector namely, software and services, hardware and equipment and semiconductors. One of the big four’s in the Audit Industry has recently shared their perspective about the prospects from technology sector. It is expected that cloud adoption will continue to elevate owing to increase in consumption through both hybrid and multi-cloud environments.

It is further expected to witness more portable and fixed networks which embed analytics and artificial intelligence for the purpose of transforming the experience of the customer. Several benefits for instance, increased edge computation in factories, automation vehicles and distribution facilities or rather anywhere where data is to be processed locally can be achieved implementing edge computing. The industry is booming like never before. With growing importance of technology these days, it is important to understand the industry and make it more innovative than it already is. 

Apple Inc.

Apple Inc. is a leading technology company which provide smooth experiences and leading innovation across all Apple devices comprising iPhone, iPad, Mac, Apple Watch and Apple TV.

Amazon, Apple, Google, Zigbee Alliance and board members form working group to develop open standard for smart home devices: Amazon, Apple, Google and Zigbee announced a new working group that plans to progress and promote the implementation of a new and royalty free connectivity standard. This shall help to develop connection between smart household products, keeping intact an essential design tenet, the security. The project will add to the existing technology and will take up open-source method for the purpose of advancement and implementation of a new, unified connectivity protocol using the contributions from smart technologies from the above brands. 

Services Revenue Reaches All-Time High: The company has recently reported its financial results for the quarter ended September 2019, wherein it the revenue of the company went up by 2% to USD 64 billion on quarter on quarter basis. This resulted an increase in earnings per diluted share by 4% to USD 3.03. The company has also returned over USD 21 billion to shareholders by the way of share repurchases and dividends.

Future Opportunities and Stock Performance: The company has given the guidance for its fiscal 2020 first quarter wherein it expects it revenue to range between USD 85.5 billion and USD 89.5 billion with a gross margin expectation of 37.5-38.5%. As per NASDAQ, the stock of AAPL has increased by 1.98% on the previous day and closed at USD 289.91 on December 26, 2019. The company has successfully toppled its 52-week’s high level. In terms of valuation, it is trading at a P/E multiple of 24.39x with current yield of 1.06%.

Buddy Technologies Ltd (ASX: BUD)

Buddy Technologies Ltd (ASX: BUD) is engaged in designing, developing and marketing a global data exchange and has two major core businesses: Commercial Business and consumer business. It’s a leader in cloud computing for making spaces smarter. As on 27 December 2019, the market capitalization of the company stood at $69.03 million.        

Agreement for 500,000 Smart Light Licenses: The company has announced that it has entered into a non-exclusive 10-year multi-product licensing agreement to build smart lights that contemplates a minimum of an initial 500,000 licenses with no cap to Eastfield Lighting Co. Limited. The agreement has an upfront payment of USD 250,000, which is non-refundable, and may be terminated upon mutual agreement with 6 months’ notice.

Quarterly Performance: For the first quarter of FY20 ended on 30 September 2019, the customer revenue stood at $7.9 million, up by 10x over the prior year. This was mainly due to the acquisition of LIFX. For the same quarter, the company reported a negative EBITDA of $2.9 million. The management is pleased to deliver a meaningful reduction in operating expenses while lifting revenue over the prior quarter across both the Commercial and Consumer divisions.

As of 30 September 2019, the company had cash reserves of $4.3 million and inventories of $7.6 million with no draws on the inventory finance facility.

Financial Performance (Source: Company Reports)

Future Expectations and Growth Opportunities: The company has achieved its breakeven target of the Commercial Division and expects that the target for Consumer Division of achieving 70% to 100% year on year growth will not be exceeded before the end of the year. BUD also stated that EBITDA profitability at the group level by the end of CY2019 remains on track and will commence a launch market campaign for LIFX Switch pre-sales after the Christmas/Boxing Day promotional period. The company is expecting over 250 new retail stores in the United Kingdom.

Stock Performance: The stock closed at $0.032, up by 10.345% on December 27, 2019. As per ASX, the stock of BUD gave a return of 45% in the past 3 months but a negative return of 14.71% in the past one month.

ARQ Group Limited (ASX: ARQ)

ARQ Group Limited (ASX: ARQ) offers cloud-based technology services such as design thinking, digital marketing, web design that helps organizations of all sizes to successfully do business online. As on 27 December 2019, the market capitalization of the company stood at $46.41 million. The company has stated that it has received several indicative, non-binding bids to separately acquire the Company’s SMB Division and is currently reviewing the offers. The company also reported a stable balance sheet comparative to its previous period net debt of $51.6 million at the end of July with a leverage ratio of 2.1x.

 

Future Expectations: The company has also re-affirmed the full year guidance for EBITDA wherein it expects underlying EBITDA of SMB Core to lie in between $9.7 million to $10.7 million whereas the group EBITDA to be in between $13.8 million to $15.8 million.

Stock Performance: The stock is trading at $0.365, down by 3.947% on December 27, 2019. As per ASX, the stock of ARQ gave a return of 5.56% in the past 3 months and a return of 1.33% in the past one month. The stock is also trading very close to its 52-weeks’ low level of $0.300.


 

Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice. 

Financial Performance (Source: Company Reports)

Future Expectations and Growth Opportunities: The company has achieved its breakeven target of the Commercial Division and expects that the target for Consumer Division of achieving 70% to 100% year on year growth will not be exceeded before the end of the year. BUD also stated that EBITDA profitability at the group level by the end of CY2019 remains on track and will commence a launch market campaign for LIFX Switch pre-sales after the Christmas/Boxing Day promotional period. The company is expecting over 250 new retail stores in the United Kingdom.

Stock Performance: The stock closed at $0.032, up by 10.345% on December 27, 2019. As per ASX, the stock of BUD gave a return of 45% in the past 3 months but a negative return of 14.71% in the past one month.

ARQ Group Limited (ASX: ARQ)

ARQ Group Limited (ASX: ARQ) offers cloud-based technology services such as design thinking, digital marketing, web design that helps organizations of all sizes to successfully do business online. As on 27 December 2019, the market capitalization of the company stood at $46.41 million. The company has stated that it has received several indicative, non-binding bids to separately acquire the Company’s SMB Division and is currently reviewing the offers. The company also reported a stable balance sheet comparative to its previous period net debt of $51.6 million at the end of July with a leverage ratio of 2.1x.

 

Future Expectations: The company has also re-affirmed the full year guidance for EBITDA wherein it expects underlying EBITDA of SMB Core to lie in between $9.7 million to $10.7 million whereas the group EBITDA to be in between $13.8 million to $15.8 million.

Stock Performance: The stock is trading at $0.365, down by 3.947% on December 27, 2019. As per ASX, the stock of ARQ gave a return of 5.56% in the past 3 months and a return of 1.33% in the past one month. The stock is also trading very close to its 52-weeks’ low level of $0.300.


 

Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice. 

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