The Class Ltd (ASX: CL1) share price gained a whopping 40.6% this week, by late afternoon trading today. That compares to a 0.7% gain for the All Ordinaries Index (ASX: XAO).
The vast majority of Class' 40.6% share price gain this week was delivered yesterday, when shares in the cloud-based software developer soared to close the day up 35.6%.
Year-to-date, the Class share price has not yet fully recovered from the smashing 57% loss it suffered during the COIVID-19-inspired share market sell-off. From 17 February through 19 March shares tumbled 57%.
After this week's gains, the Class share price is down only 7.8% since 2 January.
At the current price of $1.90 per share, Class has a market cap of $235 million.
What does Class do?
Class Ltd develops and delivers cloud software for the Australian wealth accounting market. Its products automate manual workloads and support accountants and their clients with delivering digital Self Managed Super Funds (SMSFs).
Around 28% of all SMSFs are administered on Class Super. That works out to more than 180,000 accounts administered using Class software by more than 2,800 customers.
Why did the Class share price leap 41% higher this week?
The Class share price was clearly buoyed by the release of its 2020 financial year results yesterday.
The highlights of its report included a 15% increase in operating revenue and other income in the 2020 financial year compared to the previous year. That exceeded the company's guidance of a 14% increase.
While earnings per share (EPS) fell almost 25% from the 2019 financial year, the EPS of 5.8 cents beat analyst expectations of 5.5 cents per share. The company also reported $17.4 million in operating cash flow, up 35% year-over-year.
Class' total customer numbers also grew over the past year, up from 1,545 to reach 2,866 this year.
Investors also appear to be pleased with Class' announcement that it is buying 100% of Smartcorp's shares. Smartcorp is Australia's first online company ordering and Australian Securities Investment Commission (ASIC) compliance system.
Commenting on the acquisition, Class CEO Andrew Russell said: "Acquiring Smartcorp accelerates the role Class will play in the documentation and corporate compliance space."
Following on from Class' stellar share price surge yesterday there looks to be some profit taking going on today, with the Class share price down 6% in late afternoon trading.
