REA Group Limited

REA Details
 
Average Monthly Visits Stood at ~84 million: REA Group Limited (ASX: REA)is a multinational digital advertising business, specialising in residential, commercial and share property businesses. The business announced a fully franked dividend of $0.55 per share with a payment date of 24^th March 2020.

H1FY20 Operational Highlights for the Period ended 31^st December 2019: REA announced its half yearly results, wherein the company reported revenue of $440.3 million, down 6% on y-o-y basis. The company reported EBITDA at $272.1 million, down 7% from H1FY19. Net Profit during the period came in at $152.9 million, down 13% on y-o-y basis. On a macro perspective, the sector is going through challenging circumstances with fall in the new residential listing volumes and new project commencements. The business witnessed a 4% y-o-y decrease in total operating expenses, driven by improved cost management and proficiencies delivered through structural change. The business reported strong revenue growth across Malaysia, India and North America, while the joint venture with 99.co offered a prospect of rapid growth in market share in Singapore and Indonesia. The business reported average customer visits of 84 million on a monthly basis, up 2.95 times from its nearest competitor. Average monthly searches stood ~103 million, up 14% on y-o-y basis.


Key Income Statement Highlights for H1FY19  (Source: Company Reports)

Outlook: The company is concentrating on its upcoming investment strategies to strengthen its product line, technology and data policies to boost future expansion. The Management expects recovery within the real estate market aided by improvement in the Sydney and Melbourne markets. REA also expects improvement in the revenue upon improved listings conditions during the second half of FY20. Further, the company will prioritise on higher operational efficiency in the coming years. 

Stock Recommendation: The stock of REA is quoting at $116.90, with a market capitalization of $14.93 billion. The stock has delivered positive returns of 7.52% and 22.07% in the last three months and six months, respectively. The stock has delivered an annualised dividend yield of 1.04%. The 52-weeks low and high of the stock stood at $71.540 and $117.300, respectively, and currently, the stock is quoting at the upper band of the range. The business is investing to supporting product, technology and data strategies to boost future growth opportunities. Lately, the business has reported robust growth in app downloads and app launches, that sparks optimism. Considering the outlook and business prospects, we recommend a ‘Hold’ rating on the stock at the closing price of $116.90, up 3.105% as on 7^th February 2020, owing to the 1H2020 results.

 
REA Daily Price Chart (Source: Thomson Reuters) 
 
 

Bigtincan Holdings Limited

BTH Details
Posted Robust Growth in Customer Cash Receipt:Bigtincan Holdings Limited (ASX: BTH) is a service provider of enterprise mobility software through a leading AI-powered sales enablement automation platform. Recently, the company reported that one of its Directors, named John Michael Scull, disposed 643,076 ordinary shares for a total consideration of $624,471.

Q2FY20 Business Highlights for the Period ended 31^st December 2019: BTH declared its business highlights, wherein the company posted customer cash receipts at $9.1 million, up 102% on pcp, while cash payments stood at $10.4 million, up 39% on y-o-y basis. The increase in cash operating payments includes expenses of $1.1 million related to two acquisitions - Asdeq Labs Pty Ltd acquired on 5^th September 2019 and Xinnovation, Inc. acquired on 2^nd October 2019. The expense head also constitutes an overhead of $0.6 million related to the integration, working capital and legal costs of the acquisitions including Veelo Inc. Annualised recurring revenue (ARR) during the quarter stood at $32.4 million, depicting an increase of 55% from the previous corresponding period. 


Annualised Recurring Revenue (ARR) Highlights (Source: Company Reports)

Stock Recommendation:The stock of BTH is trading at $0.94 with a market capitalisation of $305.38 million. The stock is trading at the upper band of its 52-week trading range of $0.291 to $1.080. The business is likely to invest in new workforces across the sales and marketing departments, while it invests in the product development with new team members across the USA, Australia and Israel. The company has arranged for new infrastructure to support growth and investments in data science and AI through a new partnership with data analytics company Databricks.The stock has delivered exponential returns of 46.67% and 157.14% in the last three months and six months, respectively. Considering the recent price movements, current trading levels, and business prospects, we have a watch stance on the stock at the current market price of $0.94 per share, down 5.051% on 7^th February 2020.
 
 
 
BTH Daily Price Chart (Source: Thomson Reuters)

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