Stocks’ Details

Whispir Limited

Block Trade Completed for Formerly Escrowed Shareholders: Whispir Limited (ASX: WSP) is a global scale software-as-a-service (SaaS) company, which provides a communications workflow platform that automates interactions between businesses and people. As on 8 October 2020, the market capitalization of the company stood at ~$357.47 million. The company has announced that ~53 million ordinary shares were released from voluntary escrow, out of which ~20.32 million shares were sold to domestic and international investors at a price of $3.81 per share.

FY20 Financial Highlights: During FY20, WSP outperformed its FY20 prospected forecast and reported a growth of 25.5% in revenue to $39.1 million and a gross margin of 62.5%. In the same time span, the company recorded new customer growth, with an addition of 72 net new customers to 630. WSP seems well-funded for growth with a cash balance of $15.2 million.

FY20 Financial Highlights (Source: Company Reports)

Growth Outlook: It is likely to report a CAGR of 35% in the CPaaS (Communications Platform as a Service) market by FY22. The company is benefitting from the accelerated digital transformation and retains a substantial long-term growth opportunity. It has provided guidance for FY21 and expects ARR to be between $51.1m-$55.3m and revenue in the range of $47.5m-$51.0m.

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

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The company has a healthy growth outlook with potential addressable market of US$170 billion by FY24. As per ASX, the stock of WSP gave a positive return of 30.42% in the past three months but a negative return of 17.15% in the past one month. The stock is trading slightly above the average of its 52-weeks high and low level. On a technical front, the stock of WSP has a support level of ~$2.93 and a resistance level of ~$4.1. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at a downside of lower single-digit (in percentage terms). Considering the current trading levels, volatile returns in the past months, and softer market conditions, we suggest our investors to wait for better entry levels and suggest an ‘Expensive’ rating on the stock at the current market price of ~$3.320, down by 3.207% on 8 October 2020.

Flexigroup Limited

fLexigroup Successfully Completes Retail Offer: Flexigroup Limited (ASX: FXL) is a point of sale lease and rental finance for the IT equipment, electrical appliance, and other retail markets. As on 8 October 2020, the market capitalization of the company stood at ~$539.84 million. The company has successfully completed the retail component of its non-renounceable entitlement offer and has raised $36 million at an offer price of $1.14 per share.

FXL - humm launches in New Zealand: The company has launched humm in New Zealand as the only BNPL product to support transactions in store and online up to NZD10,000. humm has replaced Oxipay as the company’s BNPL brand in New Zealand and FXL will migrate its existing customer base and established distribution network to humm.

FY20 Financial Highlights: During FY20, the company reported a growth of double-digit in its volume and witnessed an increase of 37% in consumer growth by adding 570,000 new retail customers and 5,000 new retailers. During the year, transaction volume went up by 17% to $2.5 billion but witnessed a decline in cash NPAT to $29.2 million.

FY20 Operational Highlights (Source: Company Reports)

Valuation Methodology: Price to Earnings Multiple Based Relative Valuation (Illustrative)

Price to Earnings Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: During FY20, the company saw a significant increase in engagement with 600k app downloads and saw a reduction of $10 million in underlying costs. As per ASX, the stock of FXL gave a return of 41.36% in the past six months and is trading close to its 52-weeks’ low level of $0.369, proffering a decent opportunity for accumulation. On a technical front, the stock of FXL has a support level of ~$0.572 and a resistance level of ~$1.98. We have valued the stock using the P/E multiple based illustrative relative valuation and have arrived at a target upside of lower double-digit (in percentage terms). Considering the current trading levels, decent returns in the past six month, and healthy financial performance, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of ~$1.125, up by 3.211% on 8 October 2020.

Wisr Limited

Wisr Launches Secured Vehicle Lending Product: Wisr Limited (ASX: WZR) is a marketplace lending platform and a provider of personal loans and retail investment products. As on 8 October 2020, the market capitalization of the company stood at ~$207.94 million. The company has recently launched its second major product- Secured Vehicle Finance into the market, which provides the company with an entry into the $33 billion dollar consumer vehicle finance market. The product is available for amounts from $5,000 to $60,000, with market-leading rates and flexibility on 3, 5 and 7-years terms.

FY20 Financial Highlights: FY20 has been a year of success for Wisr with a growth of 136% in revenue to $7.2 million, up from $3.0 million in FY19. In the same time span, loan originations went up by 95% to $135.9 million and saw a consistent growth trend with loans of around $250 million written to date. The company retains a healthy balance sheet with a cash balance of $38 million and borrowings of $86.7 million on 30 June 2020.

FY20 Financial Highlights (Source: Company Reports)

Outlook: Wisr seems well-positioned for significant scaling and revenue growth in FY21 and beyond. The company is focusing on aggressively growing its market share of unsecured personal loan and is re-adjusting its credit model, driving growth and expansion.

Valuation Methodology: Price to Sales Multiple Based Relative Valuation (Illustrative)

Price to Sales Based Market Multiple Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The number of Australians entering the Wisr Ecosystem went up by 389%, setting the company up for significant growth in the coming years. As per ASX, the stock of WSR gave a return of 93.88% in the past six months and is trading slightly below the average of its 52-weeks high and low level of $0.065 and $0.340, respectively. On a technical front, the stock of WSR has a support level of ~$0.089 and a resistance level of ~$0.27. We have valued the stock using the price to sales-based market multiple valuation and have arrived at a target upside of lower double-digit (in percentage terms). Considering the current trading levels, returns in the past six months, decent financial performance and modest long-term outlook, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of ~$0.185, down by 2.632% on 8 October 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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