Is Growth Profile Providing a Super Shine to These Stars - NEA, AVH, XRO?

  • Jul 08, 2019 AEST
  • Team Kalkine
Is Growth Profile Providing a Super Shine to These Stars - NEA, AVH, XRO?

NEA, AVH and XRO have provided positive returns for one month, three months and six month period, respectively. Moreover, in terms of long term perspective, all three stocks have exhibited robust returns for five years. Let’s have a look at 3 stocks with their recent updates.

Nearmap Ltd (ASX: NEA)

Nearmap Ltd (ASX: NEA) is an Australia registered company involved in the provisioning of geospatial technology for enterprises, businesses, etc. Nearmap Ltd was officially listed on ASX in 2000. Recently, the company via release dated 1st July 2019, updated the market about the expiry of ESOP options. The company reported that it has decreased 12,500 options on issue on the back of lapse in unexercised employee share options and now has 16,337,184 options on issue. The options carry an exercise price of $0.40, with 30th November 2020 expiry date.

In another announcement, the company highlighted that it has recently rolled out 3D Online and Beta version Artificial Intelligence Products. The company permits customers to export and stream 3D imagery on-demand and at scale via MapBrowser and its AI technology enables the recognition of ground features and detection of change over time.

Previously, Nearmap Ltd has become part of ASX 200 by replacing MYOB group.

Moving to the financial side of things. The company posted net operating cash inflows of $2.2 million, excluding tax, interest and deployment of capital raise as compared to $0.6 million in 2H FY18. The cash inflows from Australia and New Zealand stood at $14.4 million self-fund US and corporate operating activities. Additionally, the company invested $6.8 million of cash in product and technology development and has strengthened its balance sheet with a capital raise of $70 million.

Importantly, the company is well placed in order to continue its growth while accelerating its strategic objectives. With respect to cutting edge 3D content, it is planning to release the groundbreaking widescale 3D Visualisation and export tools in a simple to use browser.

At the time of writing on 8th July 2019 (AEST 01:15 PM), the stock of NEA was trading at a price of $3.660 per share, with a market capitalisation of $1.65 billion. The stock has produced returns of 15.00%, 25.60% and 127.16% for the one month, three months and six month period, respectively.

AVITA Medical Ltd (ASX: AVH)

A regenerative medicine company, AVITA Medical Ltd (ASX: AVH) is registered in Australia and manufactures, distributes and develops innovative products. AVITA Medical Ltd was officially listed on ASX in 1993. Recently, AVH via a release dated 1st July 2019, announced the results from an open-label feasibility study of the RECELL® for the treatment of DFUs (diabetic foot ulcers) in favor of the company. The company further stated that the RECELL® is an Autologous Cell Harvesting Device, which uses enzyme and buffer formulations in order to prepare Spray-on Skin™ Cells within half an hour.

In addition, the company, in a recently released Corporate Presentation, highlighted its Health Economic Model, which demonstrated RECELL®’s ability to reduce overall hospital costs and accelerate recovery by decreasing the number of painful procedures and length of stay in hospital. The patients witnessed a decline of 30% in length of stays on the back of fewer procedures and faster healing times, alongside a reduction of 35% in procedures, with reduced donor site size, and greater meshing ratio enabling permanent closure with fewer invasive autograft procedures. AVH’s RECELL® system is priced right for all burn sizes and for broad market adoption.

Change in Substantial Holding

Recently, the company informed the market that The Bank of New York Mellon Corporation and its each group entity have a made change in their substantial holdings with a previous voting power of 26.22% to 27.27% effective 28 June 2019.

At the time of writing on 8th July 2019 (AEST 01:30 PM), the stock of AVH was trading at a price of $0.425 per share, with a market capitalisation of $804.66 million. The stock has produced returns of 16.22%, 32.31% and 411.90% for the one month, three months and six month period, respectively.

Xero Limited (ASX: XRO)

Xero Limited (ASX: XRO) is a provider of online accounting software to small businesses. It is an Australia registered company, officially listed on ASX in 2012. Recently, the company released an Investor Presentation, highlighting its operational and financial performance for FY19. The company reported $638 million of annualised monthly recurring revenue, with 1.2% of free cash flow as a percent of revenue and roughly 1.8 million subscribers.

Looking at the ANZ region, the company reported a rise of 25% in subscriber growth to 726,000 subscribers on a Y-o-Y basis, with 33% revenue growth for FY19 in Australia. On the other hand, New Zealand witnessed a rise of 17% in subscriber growth to 351,000 subscribers on a Y-o-Y basis, with revenue growth of 24%. Additionally, the company rolled out Hubdoc, a leading data capture service, in the New Zealand market, complementing its existing emphasis on the platform products and deeper customer relationships.

Shifting focus to North America. The company is exploring vertical strategies with an initial focus on agriculture, offering tight integration of XRO with lending and tailored app partner technologies. XRO witnessed a growth of 48% in subscribers and posted 39% revenue growth on a Y-o-Y basis FY19. For the rest of world, the company announced payment service API integration with NETS, a major electronic payment service provider in Singapore and has enhanced partnerships with two of Singapore’s largest banks, DBS and OCBC.

The company raised US$300 million convertible notes, representing investor confidence in the company. The raised funds provided flexibility to the company to execute acquisitions and investments that extends and enhances the company’s small business platform and ecosystem.

At the time of writing on 8th July 2019 (AEST 01:45 PM), the stock of XRO was trading at a price of $62.990 per share, with a market capitalisation of $8.93 billion. The stock has yielded returns of 8.52%, 27.41% and 50.97% for the one month, three months and six month period, respectively.


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