This is why the Livehire results could disappoint investors

The LiveHire Ltd (ASX: LVH) share price has been falling in 2019.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The LiveHire Ltd (ASX: LVH) share price could come under pressure this morning after the online-based recruitment platform posted a net operating cash flow loss of $3.6 million on revenue of just $624,000 for the quarter ending June 30 2019. The company blamed the result on timing issues in terms of payments and some churn (customer losses) that it reported were unrelated to the product quality. 

Over the quarter it finished with a net 6 new enterprise clients as it continues to invest heavily in sales and marketing efforts. It now has 79 enterprise customers in total that represent $2.53 million in annualised recurring revenue. 

LiveHire CEO, Christy Forest, said: "Whilst we delivered only modest growth in the June quarter, our new direct sales team started to secure real traction, with 10 new logos added in the quarter since their formation in March. This new team is ahead of where we expected, and we anticipate the momentum from June will carry through the current quarter."

The company has a reasonably strong balance sheet with no debt and $34 million cash in hand, but as always small-cap investors should be cognisant of the fact it's unprofitable and posted an operating cash loss totalling $11 million over the past 12 months. 

I wouldn't suggest buying Livehire shares going by its latest update, as I reckon they're far better risk-adjusted returns elsewhere on the share market.

Other small cap software stocks that might be worth researching include Serko Ltd (ASX: SKO) and Alcidion Ltd  (ASX: ALC).

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Serko and Alcidion. 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.

More on Share Market News

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

Why Harvey Norman, Macquarie Technology, Ramsay Health Care, and Star are rising

These ASX shares are having a strong day. But why?

Read more »

A young woman dressed in street clothes leaps happily in the air with the focus on her bright red boots that are front and centre for the camera.

I'm listening to Warren Buffett and loading up on cheap ASX shares in March

I love the look of these stocks at these prices.

Read more »

A young woman sits on her bed holding a cup of coffee inside her recreational vehicle hired through the Camplify website
Cheap Shares

2 cheap ASX shares to add to your portfolio before they get expensive

I reckon this duo could see their stock prices rocket after they brush off temporary setbacks.

Read more »

Business woman watching stocks and trends while thinking
Share Market News

5 things to watch on the ASX 200 on Thursday

Will investors be leaping for joy on 29 February?

Read more »

A young man goes over his finances and investment portfolio at home.
Growth Shares

1 ASX growth stock down 30% to buy right now

The market has reacted badly to this ASX 200 company's half-year result. This could be your chance to get in.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Share Market News

Here's the Rio Tinto dividend forecast through to 2026

Here's what analysts are forecasting for the miner's dividend.

Read more »

Woman with headphones on relaxing and looking at her phone happily.
Dividend Investing

How I'd invest $250 a month in ASX dividend shares to target a $24,000 annual second income

Passive income is within the reach of ordinary Aussies, just like you. Yes, I said you!

Read more »

A man looking at his laptop and thinking.
Share Gainers

Should I buy Nvidia stock as an Australian investor?

Many Aussies are thinking of jumping on the bandwagon, but they need to think about these issues first.

Read more »