FCT – Morgans rates the stock as Add

Firstwave Cloud Technology reported 4QFY20 results and exceeded the expectations of Morgans.

The broker states that meaningful sales traction has been made and new solutions have been added to the platform. The analyst’s key takeaways from the quarter are channel partners starting to gain sales traction and the company delivering on key targets.

Morgans main focus was the company’s ability to grow their International Annualised Recurring Revenue (IARR). This metric grew from $232,000 in Jan 20 to $448,000 by June 30, a good performance in light of many international locations being in lockdown, according to the broker.

The analyst believes the sales trajectory is looking good and the addition of 26 billing partners in FY20 means IARR should continue to grow at a healthy rate.

The Speculative Buy rating is maintained. The price target is increased to $0.179 from $0.165.

Sector: Software & Services.

Target price is $0.18.Current Price is $0.15. Difference: $0.03 – (brackets indicate current price is over target). If FCT meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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