Stocks’ Details
 

LiveHire Limited

LiveHire Wins Major North American Direct Sourcing Contract: LiveHire Limited (ASX: LVH) provides cloud-based human resources software and platform services. As on 28 April 2020, the market capitalization of the company stood at $66.52 million. The company has recently announced that it has won its latest Direct Sourcing contract in North America with an estimated contract value of $400,000 annual revenue. This contract will add over half a million candidate profiles to the LiveHire ecosystem. 

The company has recently released its results for the quarter ended 31 March 2020, wherein it added nine new clients and reported an increase of 34% in Annualized Recurring Revenue to $3.3 million. The company also entered the New Zealand market and continued to reduce front-loaded product investment, reducing the company’s cost base.


Quarterly Operational and Financial Highlights (Source: Company Reports)

Growth Opportunities: LiveHire is uniquely well positioned to deliver use cases in these economic and shifting workforce conditions. The company has increased the number of multi-year contracts to provide further stability to the client base.

Stock Recommendation: As per ASX, the stock of LVT gave a return of 4.76% in the past three months and a substantial return of 171.6% in the last one month. During 1H20, current ratio of the company stood at 8.14x, higher than the industry median of 1.72x. This indicates that the company is liquid enough to pay off its current liabilities using its current assets. In the same time span, Assets/Equity ratio of the company was 1.15x, lower than the industry median of 1.51x. On the TTM basis, the stock is trading at a price to book value multiple of 2.3x, lower than the industry average (Technology) of 3.5x. Considering the substantial returns, decent financial performance amidst pandemic and improvement in margins, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.3, up by 36.364% on 28 April 2020, owing to its recent update regarding contract win in North America. 

Class Limited

1H20 Financial and Operational Highlights: Class Limited (ASX: CL1) provides cloud-based self-managed superannuation fund administration software solutions and services. As on 28 April 2020, the market capitalization of the company stood at $171.86 million. During 1H20, operating revenue of the company went up by 8% to $20.5 million and reported an increase of 25% in product investment to $5.5 million. In the same time span, EBITDA of the company was $8.1 million, and NPAT stood at $3.1 million. The company witnessed continued growth in market share and acquired NowInfinity to further extend its product set around the professional services ecosystem. 


1H20 Financial Highlights (Source: Company Reports)

Future Expectations: The company is growing its core SMSF market share and is increasing lifetime value per client. CL1 is providing new products to existing clients and is selling into new markets. The company is investing in future by spending more in technology development, product, marketing and sales.

Stock Recommendation: As per ASX, the stock of CL1 gave a return of 32.08% in the last one month and is inclined towards its 52-weeks’ low level of $0.885. During 1H20, EBITDA margin of the company stood at 40.1%, higher than the industry median of 26.6%. In the same time span, ROE of the company was 10.3% as compared to the industry median of 7.5%. Considering the returns in the past one month, trading levels, decent financial position and increased market share, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $1.420, up by 1.429% on 28 April 2020. 

BrainChip Holdings Ltd

Paycheck Protection Program Loan: BrainChip Holdings Ltd (ASX: BRN) is engaged in the development of software and hardware accelerated solutions for advanced artificial intelligence and machine learning applications. As on 28 April 2020, the market capitalization of the company stood at A$77.14 million. The company has recently received a U.S. Government loan of US$412,000 under the CARES Act Paycheck Protection Program.

FY19 Result Highlights:During FY19, revenue of the company stood at US$75,574, and loss of the company went down to US$11.3 million from US$16.52 million in FY18. During the year, the company made significant progress in completing the design and development of the Akida^TM System-on-Chip and in preparing for manufacturing.


FY19 Financial Performance (Source: Company Reports)

Stock Recommendation: As per ASX, the stock of BRN gave a return of 12.77% on the YTD basis and a return of 32.5% in the last one month. The stock is also inclined towards its 52-week’ low level of A$0.03, proffering a decent opportunity for accumulation. During FY19, current ratio of the company stood at 5.63x, higher than the industry median of 1.92x. In the same time span, Assets/Equity ratio of the company was 1.22x, lower than the industry median of 1.66x. Considering the returns, trading levels, and improved margin, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of A$0.052, down by 1.887% on 28 April 2020. 

 
Comparative Price Chart (Source Thomson Reuters)

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