How did the WAAAX stocks performed in July?
Let's take a quick look at how our top technology stocks have been tracking on the ASX in the last month, especially with earnings season just around the corner.
WiseTech Global Ltd (ASX: WTC)
The WiseTech share price closed at $31.87 this afternoon, rising around 90% in the year-to-date. Its P/E multiple is almost 200x, making it one of the most expensive tech companies in the world.
WiseTech is the mastermind behind CargoWise One, a software fundamental to supply chain and logistics management. All the top 25 freight providers globally are customers, and it operates in over 130 countries.
In gearing up for its FY earnings call, investor confidence has driven WiseTech's stock price upwards consistently. It is expected the company will deliver guidance between 47% to 53% of growth. WiseTech has a track record of delivering market-beating results, and there's no reason why this announcement will be any different.
WiseTech FY Results Announcement: 21 August
Appen Limited (ASX: APX)
The Appen share price is currently up 135% from $12.80 at the beginning of the year, to a $30.06 close today. This past week has shown Appen's shares at its highest ever, explaining its extraordinary P/E multiple of 78x.
Concerns over Appen's concentrated customer concentration risk has eased, with the help of acquisitions like Figure Eight. Around a year ago, 80% of the company's revenue was generated from big techs like Facebook and Google. However, the company has now redirected its focus from the US to operating in Europe and Asia. Figure Eight has been instrumental in this process, with its lower-cost product appealing to these markets.
Thus, the total addressable market for Appen's crowdsourced training data is increasing. This has been key to its ability to consistently beat analyst expectations.
Altium Limited (ASX: ALU)
Similar to Appen, the Altium share price hit its peak last week, reaching $37.92. This is a 67% increase since the beginning of the year, showing strong investor confidence in the company's growth and sticky subscription product.
As it pushes to reach its goal to acquire 100,000 Altium Designer subscribers, the company is crowding out competitors like Cadence and Siemens. Altium is on track to achieve leadership in the printed circuit board market by 2020, expecting revenue to hit $200 million.
Investors will have their eyes peeled on the metrics for Altium Designer and its newer Altium 365 product in the company's FY.
Altium FY Results Announcement: 19 August
Afterpay Touch Group Ltd (ASX: APT)
The Afterpay share price is up 105% in the year-to-date, closing at $25.49. Despite this phenomenal growth rate, the APT share price has been rather shaky in July due to numerous factors.
Afterpay is under regulatory scrutiny once again. The company was recently suspected for not complying with anti-money laundering laws, and thus the Australian Transaction Reports and Analysis Centre (AUSTRAC) appointed an external auditor to Afterpay. To further add to the uncertainty of the company's future, co-founders Anthony Eisen and Nick Molnar cashed out a whopping $100 million.
Despite these headwinds, this doesn't change the fact that Afterpay attracts 7,900 customers a day across the UK and the US. It also has a history of beating analyst expectations which is why it's still on my watchlist.
Afterpay FY Results Announcement: 22 August
Xero Ltd (ASX: XRO)
The Xero share price has risen 56% for a close of $65.68. The company leads the way in cloud accounting across Australia, New Zealand and the UK. More recently, the company has managed to break into Hong Kong, South Africa, Singapore and most importantly, North America.
While Xero's US operations only account for 10% of its revenue, this number is growing 62% year-on-year in North America alone. This is in part due to the company's partner strategy, where Xero sells via accountants as opposed to directly.
The addressable market is also largely unpenetrated. Cloud accounting is only at 15% penetration which is starkly lower than the 50% observed in New Zealand.
