Morgans retains its Hold rating and $0.39 target price after Rightcrowd’s fourth quarter annual recurring revenue (ARR) doubled year-on-year, marginally ahead of guidance. Revenue booked was a estimated to be a marginal miss.
The broker notes the year ended with $9.9m of cash, which equates to 2.7 quarters of funding based on the fourth quarter cash burn rate. While costs stepped up substantially, they were considered to include a number of one-offs costs.
The analyst anticipates operating expenses should drop by -$1m per annum, as the acquired Offsite Vision settles into the core business.
Sector: Software & Services.
Target price is $0.39.Current Price is $0.32. Difference: $0.07 – (brackets indicate current price is over target). If RCW meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).