Key points
- The Elmo share price is up more than 9% today
- The company reported 35% organic growth in H1 FY22
- Revenue increased by 41% on the first half of FY21
In afternoon trade, the business software company’s shares are trading at $4.22, up 9.04% at the time of writing. The share price reached as high as $4.38 in early trading. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.87% higher.
Let’s take a look at what the company reported today.
Elmo share price escalates on half-year results Some highlights from Elmo’s H1 FY22 report include:
- $43.1 million revenue, up 41% from H1 FY21
- $98.3 million annualised recurring revenue (ARR)
- 35% organic growth compared to H1 FY21
- EBITDA of $0.3 million, up $0.9 million from H1 FY21
The company provides cloud-based software solutions for HR, payroll, and rostering in Australia, New Zealand, and the UK.
In the past 12 months, the company has topped $101 million in cash receipts. This is a 57% rise on the first half of the previous financial year. Since H1 2018, the company’s cash received has increased from $21.2 million to $101.4 million. That’s a 378% improvement in four years.
The company’s cash balance finished at $58.4 million as at 31 December 2021. The figure is nearly 29% less than H1 FY21 when Elmo Software held $81.9 million. However, the company says its operating monthly cash burn fell by 36% compared to the first half of 2021.
What’s next for Elmo? Elmo has improved its guidance for FY22 to between $107 and $113 million ARR. This represents 28% to 35% year on year growth.
Meanwhile, the company predicts its revenue to increase by 32% to 39% year on year to between $91 and $96 million. The company’s expected EBITDA is between $1.5 to 6.5 million.
My Foolish colleague Tristan reported recently that Morgan Stanley (NYSE:MS) rates the share price as a buy with a price target of $7.80. That’s around 84% more than the share price at the time of writing.
Share price recap The Elmo share price has shed 36% in the past year. It’s fallen 7% in the past month alone but it has recovered more than 6% in the past week.
Meanwhile, the broader ASX 200 Index has returned nearly 5% over the past 12 months.
The company has a market capitalisation of about $377 million based on its current share price.
The post Here’s why the Elmo (ASX:ELO) share price is surging 9% today appeared first on The Motley Fool Australia.
The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Elmo Software. The Motley Fool Australia owns and has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2022