Whispir Limited

WSP Details

FY21 & Q4FY21 Trading Update: Whispir Limited (ASX: WSP) is a SaaS provider and has expertise in the development and provision of communications management systems through a cloud-based platform. The company has recently provided an update on its operations for the year ended 30 June 2021.  

• It has delivered ARR growth of 28.5% to $53.6 million in FY21, on the back of increased usage of its platform and the addition of new customers.
• Total customers stood at 801 during the end of Q4FY21, reflecting an increase of 27.1% on the pcp.
• The impact of COVID-19 has resulted in a delay in new customer activations in Asia, and as such it expects delayed revenue in FY21 to materialise in H1FY22.
• It reported cash receipts of $13.5 million during Q4FY21.
• The company has posted a decent balance sheet with a cash position of $49.2 million as of 30 June 2021.

Increasing Trend in Revenue (Source: Analysis by Kalkine Group)

Key Risks: The company’s line of business makes it prone to technological obsolescence. Therefore, it has to make investments in its R&D and look to stay ahead of the latest technological trends in the market.

Outlook: The company expects to deliver ~$47.7 million in revenues in FY21, reflecting an increase of ~22% over the prior year. It plans to execute its growth plans going forward and increase its customer base and diversify its channel partners.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: The company will release its audited FY21 results on 25 August 2021. As per ASX, the stock of WSP is trading below its average 52-weeks’ levels of $2.37-$5.170. The stock of WSP gave a negative return of ~27.94% in the past nine months and a negative return of ~10.25% in the past one month. We have valued the stock using an EV/Sales multiple-based illustrative relative valuation and have arrived at a target price of low double-digit upside (in % terms). We believe that the company can trade at a slight discount to its peer median EV/Sales (NTM trading multiple), considering the negative net margin & ROE performance and the risk of technological obsolescence in the space. For this purpose, we have taken peers such as Class Ltd (ASX: CL1), LiveTiles Ltd (ASX: LVT), Over The Wire Holdings Ltd (ASX: OTW), to name a few. Considering the current trading levels & indicative valuation, decent increase in ARR, rise in customers, comfortable cash position and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $2.38, down by ~4.80% (as on 02 August 2021, 10:32 AM (GMT+10), Sydney, Eastern Australia).

WSP Daily Technical Chart, Data Source: REFINITIV

Bionomics Limited

BNO Details

Plans of U.S. Initial Public Offering: Bionomics Limited (ASX: BNO) is engaged in the discovery and development of drugs for the treatment of central nervous system disorders. As per a recent update, the company has announced that it plans to conduct an initial public offering of American Depositary Shares (ADSs) in the United States and a subsequent listing of ADSs on Nasdaq. In this regard, it is expecting to propose a capital distribution to its shareholders on a record date prior to the U.S. offering.

Q4FY21 Quarterly Update:

• On 3 May 2021, the company has updated that it has prepaid its outstanding debt obligations to further improve its balance sheet. This resulted in overall savings of $98,537 to the company.
• It has successfully completed the 1 for 6 pro rata non-renounceable Entitlement Offer and Concurrent Placement on 6 April 2021, and collectively raised $22.9 million.
• It ended the period with a cash balance of $28.5 million as of 30 June 2021.
• Cash outflow during the period was at $4.25 million.

Declining Trend in Debt Levels (Source: Analysis by Kalkine Group)

Key Risks: The company's line of business makes it prone to prudent regulatory purview, which can impact the company’s operations and make the R&D investments redundant.

Outlook: The company expects to update on the progress of patient enrolment in the BNC210 PTSD Phase 2b ATTUNE study, going forward. It also plans to give further guidance on trial design and timelines for a Phase 2 trial of BNC210. It will release its FY21 earnings on 26 August 2021.

Stock Recommendation: As per ASX, the stock of BNO is trading below its average 52-weeks’ levels of $0.056-$0.448. The stock of BNO gave a negative return of ~28.57% in the past three months and a positive return of ~26.26% in the past six months. Considering the successful capital raise, decent cash position, plans of U.S. IPO and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.155, up by ~3.33% (as on 02 August 2021, 10:32 AM (GMT+10), Sydney, Eastern Australia).

BNO Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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