Restaurant Brands has warned investors of a “significant decline”, online retailer Kogan has reported a huge jump in sales, Premier Investments yesterday confirmed that it has delayed re-opening some of its Australian chains while Nearmap has confirmed full-year guidance and reckons it is largely unaffected by the COVID-19 lockdown.
The savage share sell down of Nearmap highlights the dangers of investing in tech stocks valued on lusty revenue multiples that leave little room for error. Given that billion-dollar valuations have become common in the sector, no doubt other casualties will emerge as the reporting season unfolds.
It’s time for me to revert back to individual stock opportunities. The past few weeks we have been discussing the global macro picture and some of the clues that other markets and instruments have been giving as clues to the future behaviour of equities. Sometimes though despite the broader market trends there are standout individual companies and one of these that excites us once again is Nearmap (NEA) which is now expanding into the US and gaining a lot of traction. Hence the share price improvement.
The company has acquired technology and IP from Pushpin, a deep learning and roof geometry insight provider, and existing customer of Nearmap. Morgan Stanley assesses the transaction and near-term financial impact are small.
Preliminary indications suggest FY19 results are in line with Morgan Stanley's estimates. Break-even on cash flow, excluding the capital raising, has been achieved. The company will release its results on August 21.