The ASX fell $26 billion yesterday after news that trade wars between the US and China could last for over a year. The tit-for-tat strategy between the two powerhouses has sent the world’s financial markets tumbling.
As a result, Australia’s WAAAX companies have had a rough August with a few exceptions. Here’s what’s new with the top ASX tech companies as earnings season rounds off.
WiseTech Global Ltd (ASX: WTC) closed at $33.30 yesterday, close to its peak of $33.78 last month. While the ASX hiccups, WiseTech has moved against the market, with strong investor confidence fuelling the growth of this logistics company.
And for good reason. With a 188x P/E ratio, WiseTech is easily one of the most expensive tech companies in the world. Yet, its earnings report last week saw its share price shoot upwards of 10% in the trading day.
WiseTech had only good news to share, it grew its EBITDA 39% to $108.1 million and it now services 43 of the 50 top global third-party logistics providers across 150 countries.
Over the last month, the Appen Limited (ASX: APX) share price has sunk 24% amidst global uncertainties.
The data labelling company has been hit the hardest compared to its WAAAX counterparts, most likely because of its perceived customer concentration risk. Just a year ago, 80% of Appen’s revenue was generated from big techs like Facebook and Google, all of which have been struggling amidst wider tech sell-offs.
Despite this, the AI market is expected to grow between $US169 billion $US191 billion per annum by 2025. Data labelling makes up around 10% of the total addressable market, reflecting Appen’s future growth opportunities.
Altium Limited (ASX: ALU) hit its peak of $38.49 a month ago. It then stooped 16% lower before picking up 14% for a $36.00 close yesterday. This is a 67% increase since the beginning of the year, showing strong investor confidence in the company’s growth and sticky subscription product.
The company reported its earnings last week, posting a 22.6% increase in FY revenue to US$171.8 million. Its net profit after tax also rose by 41.1% to US$52.9 million.
These strong FY19 results were met with positive investor sentiments, with growing confidence that Altium can hit its goal to grow revenue to US$500 million by 2025.
Afterpay Touch Group Ltd (ASX: APT) is due to report its earnings tomorrow. Investor confidence is sky-high with the share price popping 7% at the time of writing. This is off the back of the company announcing its new partnership with Ulta Beauty and J.Crew yesterday.
Analysts will be closely watching whether Afterpay has been successful in the UK and US. We know that Afterpay is attracting 7,900 customers daily across both countries, time will tell if this has boosted its bottom-line.
The Xero Ltd (ASX: XRO) share price is down around 8% since last month. Investors have been slightly disappointed with the slow progress of Xero in capturing the US market, though this may take a turn in the years to come.
The room for growth for this accounting software company is huge, with only 10% market penetration in countries like Canada. This pales in comparison to Australasia – where 50% use online accounting software.
Xero recently appointed new country managers for US and Canada. Ben Richmond and Will Buckley are now responsible for working with the country teams to bolster key partner channels in their respective regions.
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Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium, WiseTech Global, and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. 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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