GetSwift Limited (ASX: GSW)

Eying profitability at the back of client contracts’ execution: GetSwift Limited (ASX: GSW) is a global technology company that offers logistic software and provides cloud-based software-as-a-service (SAAS) solution for delivery in domestic and international markets. From last few months, the group is encountering challenges and has been now served with a notice to produce documents to ASIC that are being speculated to be in relation with any false representations made by the group. While GSW has informed the regulator that it will comply with the notice and fully cooperate to help conduct the investigation. This news led the stock plunge by 11% on February 28, 2018.

Meanwhile, GSW announced that the company has appointed Ms Sophie Karzis as company secretary. Further, group’s first half year of FY18 result entailed revenue up by about 426.4% to $0.63 million as compared to $0.120 million in 1HFY17. During the same period, GetSwift’s Enterprise Client contracts have progressed just about 50% to generate revenue that has emanated some concerns among investors. Further, the loss after income tax grew by 963.9% YoY to $5.5 million in 1HFY18 from $516,700 in 1HFY17 on the back of rise in staff expenses and non-cash share -based cost. Currently, the company is in the process of implementing customised solutions for number of major enterprises, but it will take some time to generate revenue. In addition, the company expects to increase its staff size to provide better client service in the America, Europe, Middle East and Asia (EMEA) regions. GSW had successfully raised $75 Mn at $4 per share through private placement as on 11 December 2017.

Meanwhile, GSW stock has fallen 66.34% in three months as on February 27, 2018 followed by a rise of 33.3% seen in five days. Given the hurdles, we put an “Expensive” recommendation on the stock at the current price of $0.605
 
 

Revenue ($ Thousand) and YoY Growth (%), (Source: Company Report)

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