- In the current times, digitisation is accelerating, and numerous tech companies have been resilient to weather the Covid-19 triggered headwinds. Moreover, they are leveraging an array of value-added opportunities to expand their revenue streams and thrive in the competitive business environment.
- Nasdaq Composite index closed at 11,141.56, up by 2.71%, on 9 September 2020, with the impressive performance of various technology stocks. On home turf, S&P/ASX 200 Information Technology index followed the same sort of mojo and closed the day’s session in green at 1,706.80, up by 1.35%.
- The recent rally has come on the back of the remarkable performance by various growing ASX listed tech stocks such as Alcidion, Megaport, Appen, Netlinkz, NextDC and many more.
In the current times, digital transformation has been pushing numerous entities across different industry sectors forward, transforming their business models and bestowing opportunities for value addition and enlarge revenue streams.
Notably, in the digital era, firms that are offering digital solutions tend to have a competitive edge in the competitive business environment, accelerating growth.
The technology space is burgeoning which is exemplified by the technology bellwether index, NASDAQ, which stormed higher and closed at 11,141.56 points, after hitting a high of 11,217.69 intra-day, as on 9 September 2020.
However, on 10 September, the same index settled at 10,919.59, falling by 1.99% from its last close.
Closer home, the S&P/ASX 200 Information Technology index (ASX:XIJ) followed the same suit and closed at 1,706.80, indicating a rise of 1.35%, as on 10 September 2020. However, on 11 September, XIJ was trading at 1,681, dipping by 1.51% (at AEST 2:58 PM).
The recent rally has come on the back of the impressive performance by various growing tech stocks such as Alcidion, Megaport, Appen, Netlinkz and many more.
With this backdrop let us apprise ourselves with three ASX-listed technology stocks that have contributed in the current rally.
Alcidion Group Limited (ASX:ALC)
Health informatics company, Alcidion share price witnessed a whopping increase of 12% and closed the day’s trade at AU$0.014 as on 10 September 2020. Though on 11 September, Alcidion was trading flat at AU$0.140 (at AEST 2:59 PM).
On 10 September 2020, the Company released FY2020 results and highlighted the boosted business performance during the period.
Source: ALC’s ASX announcement, dated 10 September 2020
Following were the highlights of the impressive business performance of ALC:
- Alcidion experienced an increment of 10% (y-o-y) in its total revenue and was recorded at AU$18,608 thousand.
- The Company achieved a gross profit margin of 26%, primarily due to an increase in the cost of sales, which included numerous items that other software-driven healthcare peers typically show in their operating expenses.
- ALC’s EBITDA was noted at AU$3,771 thousand at the end of FY20.
- The Company witnessed an increase of 9% (y-o-y) in the sold revenue and was recorded at AU$12.8 million.
- Alcidion noted cash of AU$15.9 million, as of 30 June 2020.
Furthermore, the boosted cash reserves would aid in planned investment and stabilisation of cost base in FY21.
Notably, the Company possesses a robust pipeline of potential business, notwithstanding a few short-term delays to signed contracts.
Appen Limited (ASX:APX)
A global company developing top quality, human-annotated datasets for AI and machine language, Appen noted an increment of 3.21% in its share price on 10 September 2020 and closed the day’s trade at AU$32.51. However, on 11 September, Appen was trading at AU$31.88, decreasing by 1.938% (at AEST 3:28 PM).
In the quarterly rebalance of the S&P Dow Jones indices unveiled on 4 September 2020, it was notified that Appen is due for inclusion in S&P/ASX 100 Index on 21 September 2020.
Furthermore, on 27 August 2020, Appen unveiled its robust business performance with soared revenue of 25% to AU$306.2 million for the six months ended 30 June 2020 as compared to 1H FY19.
The swelled sales were ascribed to current projects with the existing client base and few new projects from both existing, as well as new clients.
Source: APX’s ASX announcement, dated 27 August 2020
Other highlights of the enlarged financial performance of ASX listed Appen for 1H FY20 are as follows:
- Appen witnessed a surge of 6% (y-o-y) in the underlying EBITDA and stood at AU$49.1 The Statutory EBITDA noted a y-o-y increment of 44%.
- The Company noted a whopping increase of 405% in its annual contract value and was recorded as US$103 million at the end of 1H FY20.
- Appen’s cash position was recorded as AU$126 million, as on 30 June 2020.
- Furthermore, Appen has declared a 50% franked interim dividend of 4.5 cents per share (cps), demonstrating a rise of 12.5% (y-o-y), to be paid by 24 September.
On the outlook front, Appen expects to record underlying EBITDA in the range of AU$125 – AU$130 million during FY20.
Megaport Limited (ASX:MP1)
Network-as-a-Service provider, Megaport share price, noted an increase of 3.64% and closed the day’s trade at AU$15.37 on 10 September 2020. However, on 11 September Megaport was trading at AU$15.07, down by 1.952% (at AEST 3:39 PM).
Notably, Megaport has scheduled its virtual 2020 Annual General Meeting on 22 October 2020.
On 19 August 2020, Megaport announced its robust business performance during the financial year ended 30 June 2020.
- Megaport noted an upsurge of 57% (y-o-y) in its June Monthly Recurring Revenue (MRR) and was recorded at AU$5.7 million.
- MP1’s customers reached 1,842 at the end of FY20, indicating an increase of 24%.
- The Company’s revenue was recorded at AU$58.04 million, up 66 % from the previous year.
- Megaport witnessed a whopping increase of 147% (y-o-y) in its profit after direct network costs and stood at AU$29.5 million.
- MP1 noted cash position of AU$166.87 million at the end of 30 June 2020. The cash position was also bolstered by the capital raising of AU$134 million.
- The Company’s net loss stood at AU$47.7 million.
It is worth noting that these remarkable results were driven primarily by expansion into numerous geographies across Europe, Asia Pacific, and North America.
Source: MP1’s ASX announcement, dated 19 August 2020