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Why the Bidenergy Ltd share price is going absolutely gangbusters

The Bidenergy Ltd (ASX: BID) share price has gone from just a couple of cents this time last year to a record high of $1.40  today, meaning anyone who paid 5 cents for the shares on Jan 10 2018 has made 28x their investment in just one year.

However, it seems that one of the main drivers behind its rising share price was a share consolidation on a 100 for 680 basis that would have naturally lifted the share price due to their being 6.8x less shares on issue in effect.

Still even accounting for the consolidation the performance is impressive, so let’s take a look at what’s behind BidEnergy’s meteoric rise.

BidEnergy reports it provides energy management software services to businesses to help them manage costs across multiple sites in term of efficient bill payments  and energy usage. On December 17 it announced it has signed a deal with law firm Cushman & Wakefield to help them manage their water, energy, gas and council rate requirements.

As at September 30 2018 Bid claimed it had $4.7 million in “annualised” revenue, with it reporting an operating cash loss of $745,000 for the quarter ending September 30, 2018. It also had no debt and $4.56 million cash in hand.

According to Commsec the company has a market value more than $130 million at today’s prices, which suggest there’s an awful lot of hype built in the business given its valuation.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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