Airtasker Limited

ART Details

1QFY22 Key Update (Period Ended 30 September 2021): Airtasker Limited (ASX: ART) is in the provisioning of technology-enabled online marketplace for local services. Recently, the company issued 300,000 and 139,167 fully paid ordinary shares.

• Despite key markets suffering from COVID-19 related lockdown, the company posted a robust gross marketplace volume (GMV) of $35 million in 1QFY22, depicting a rise of ~6.2% year over year.
• Owing to the bounce back witnessed in Sydney and Melbourne, the company reported its latest weekly GMV of $3.6 million, equivalent to $185 million on an annualised run-rate basis.
• Receipts from customers during the quarter were up 2.3% year over year and came in at $6.5 million. Notably, in 1QFY22, the company’s cash outflow from operating activities stood at $4.09 million, due to higher international marketing investment. As at 30 September 2021, the company’s cash balance stood at $40.18 million.
• The company also remains on track to expand its foothold in the international market. In the UK, organic growth enhanced owing to a recovery in COVID-19. Further, the integration of Zaarly and the US expansion is being progressed well.
• The company appointed its Chief Product Officer, Patrick Collins, thus enhancing its overall leadership position.

Annual General Meeting Highlight: Coming to FY21 results, the company reported total revenues of $26.6 million, up 38% year over year. Throughout the year, the company depicted a robust business model, with gross margins amounting to over 93% and achieving positive operating cash flow of $5.5 million in FY21.

Cash Highlight; Analysis by Kalkine Group

Risk Analysis: ART operates an online marketplace and is dependent on technology for the seamless functioning of its business. ART is acquiring many companies, which results in some integration risk. Also, market pressures, regulatory and legislative pressures remain major concerns.

Outlook: The company remains on track to build a robust marketing infrastructure to invest in customer acquisition and brand marketing in 2HFY22. For 2HFY22, the company expects over $153 million in GMV and plans to further increase its marketing investment. Going forward, the company’s growth strategies, expansion of product suite, acquisition synergies, and other investments are expected to boost the top-line growth of the business.

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

Source: Analysis by Kalkine Group 

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation: The stock of the company has been corrected by ~14.91% in the past six-months. Currently, the stock is trading below the average of its 52-week high and low levels of $1.965 and $0.880, respectively. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at a slight premium as compared to its peers, considering growth in revenue, international expansion, decent outlook, and growing GMV, etc. For the purpose of valuation, peers such as Seek Ltd (ASX: SEK), REA Group Ltd (ASX: REA), Carsales.Com Ltd (ASX: CAR), and others have been considered. Considering the increase in revenues, acquisition synergies, positive long-term outlook, current trading levels, indicative upside in the valuation, along with key risk associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.95 as on 30 November 2021, 10:30 AM (GMT+10), Sydney, Eastern Australia.

ART Daily Technical Chart, Data Source: REFINITIV  

Whispir Limited

WSP Details

1QFY22 Key Update: Whispir Limited (ASX: WSP) is a software-as-a-service (SaaS) company, which offers communication management systems through a cloud-based platform that automates connections between businesses and people. 

• During the quarter, the company added 33 net new customers onboarded, taking total customers to 834, representing an increase of 25.4% on pcp.
• On the geographical performance, the company’s ANZ business continued to perform well. As per the company report, WSP added 7, 13, and 13, net new customers in ANZ, Asia, and North American, respectively in 1QFY22.
• In 1QFY22, net cash used from operations came in at $2.87 million, up 45.1% on pcp, owing to its strategies to scale globally.

Annual General Meeting Update:

• WSP posted a growth of 28.5% YoY to $53.6 million in FY21, with recurring revenue constituting 96.7% of total revenue.
• In FY21, the company’s revenue soared 22% on pcp and came in at $47.7 million. The growth was aided by strengthening position in Australian and New Zealand markets, and the addition of new blue-chip customers across multiple channels.
• The company's total new customers rose to 801 in FY21, increasing 27.1% on FY20, owing to 171 net new customers acquisition across ANZ, Asia, and North America.
• In FY21, operating EBITDA loss (excluding non-cash share-based payment) stood at $4.7 million, an improvement of 16.1% from the year-ago period.

Headcounts Highlight; Analysis by Kalkine Group

Risk Analysis: The company’s financial performance might get impacted by caution in buying behaviour. Also, change in customer preference and supplier concentration risk add to the woes. WSP faces foreign currency changes due to operations’ exposure to new and multiple geographies (Asia, Australia, and North America).

Outlook: The company continues to expect its FY22 ARR to be in the range of $65.4 million and $70 million, depicting a rise of 22-31% year over year. Notably, the company has updated its revenue outlook and it now expects FY22 revenue to be between $64 million to $68 million (previously $57.2 million and $60.2 million), depicting an increase of 34-42% year over year. EBITDA loss (excluding non-cash share-based payments) for FY22 is now expected to be in the ambit of $$11.2-13.2 million (previously a loss of $13- $15.5 million).

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

Source: Analysis by Kalkine Group 

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation: The stock of the company has been corrected by ~27.84% in the past six-months. Currently, the stock is trading at par to its 52-weeks’ low level of $2.03. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at a slight discount as compared to its peers, considering forex headwinds, customer concentration risk, regulatory concern, COVID-19 led uncertainties, rising expenditure, etc. For the purpose of valuation, peers such as Nearmap Ltd (ASX: NEA), ELMO Software Ltd (ASX: ELO), and Bigtincan Holdings Ltd (ASX: BTH) have been considered. Considering the above factors, robust ARR growth, growing customer base, focus on delivering organic growth, decent cash position, the updated revenue outlook for FY22, and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the closing market price of $2.03, down by ~5.582% as on 30 November 2021.

WSP Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above. 

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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