LiveTiles Limited

Strong Growth in ARR and ARR per customer: LiveTiles Limited (ASX: LVT) ended September 30, 2018 by generating annualised recurring revenues or ARR of $18.6 million which implies the YoY growth of 272%. Talking about the FY 2018 results, the management of the company reflected favourable views. As per the management, the company witnessed robust growth momentum in the average ARR per customer in FY 2018 thanks to the higher penetration as well as new enterprise customers.

LVT’s FY 2018 Highlights (Source: Company Reports)

The company had remained focused towards the favourable momentum in the revenues as well as customer growth in FY 2018 and they have also added sales staff. Apart from this, the company also managed to seal a deal with the N3, which is a company engaged in sales as well as marketing consulting.

Improvement in Important Ratios:LiveTiles Limited witnessed improvement in the important financial ratios in FY 2018 on the YoY basis which could attract the attention of the market players. In FY 2018, the company posted EBITDA margin of -394.1% while in FY 2017, it posted -525.6%. Moreover, the company also posted net margin of -388.1% in FY 2018 implying an improvement from -417.9% in FY 2017.

Deployments, N3 Deal to Support LVT Moving Forward: In the annual report for 2018, the management of LiveTiles reflected positive views about the future performance of the company. They stated that in FY 2019 robust growth momentum is expected to be witnessed on the back of deal with N3, deployments with regards to the direct sales as well as marketing and increasing partner channel.

However, links with the Microsoft as well as co-marketing initiatives would also be drivers for the growth in FY 2019.

Stock Analysis: Two technical indicators have been applied on the daily chart of LiveTiles and default values have been considered. As per Moving Average Convergence Divergence or MACD, the bearish momentum is expected as the MACD line crossed the signal line and has been moving downwards. However, the bullish momentum is expected if Relative Strength Index or RSI is considered. The 14-day RSI has reached the oversold region and is expected to witness a rebound creating bullish momentum. 

Therefore, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.290 per share.
 

Medlab Clinical Limited

Robust Growth and Share Placement Wrapped Up: Medlab Clinical Limited (ASX: MDC) has completed Stage 1 of its NanaBis Trial (cannabis based medicine) and is putting forth its key steps to have better expansion landscape. The group lately incorporated its subsidiary in Europe for its cannabis-based medicines. For FY 2018, Medlab Clinical reported total revenues of $5.55 million which implies the YoY growth of 25%. Moreover, the company also encountered growth of 47% in FY 2018 on the YoY basis in the cash receipts which it garnered from the customers. The management of the company also stated that in FY 2018, the company managed to wrap up the share placement and, as a result, it raised around $22.68 million (post costs) from the institutional investors.

Talking about the company’s standing from the patents point of view, it happens to have the robust position as it possesses 27 patents / patent applications as per the annual report of 2018.

Strong IP Portfolio (Source: Company Reports)

Reduction in Lead Times and Robust Market Potential to Support MDC Moving Forward: The top management of Medlab Clinical Limited is having an optimistic outlook about the future. The management of the company is having favourable point of view with regards to the potential around the programs for research and development as well as about market size. Apart from this, the company also stands in decent position when it comes to complying with the regulatory standards. The management of the company stated that getting the approvals from the Australian regulators would support the opportunities to comply with the regulatory measures in the international markets.

Stock Analysis:On the daily chart of Medlab Clinical Limited, Moving Average Convergence Divergence or MACD has been applied and, for the purposes, default values have been considered. As per the observation, the MACD line has crossed the signal line and is moving upwards creating the bullish momentum.However, Relative Strength Index or RSI has also been used by considering the default values. The 14-day RSI is trending towards the overbought region and after it reaches there, a downward momentum is expected.

At the moment, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.400 per share, up 2.6% on December 11, 2018.
 

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