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Why the Whispir (ASX:WSP) share price is storming higher

share price higher

The Whispir Ltd (ASX: WSP) share price has been a positive performer on Monday.

In afternoon trade the leading workflow communications platform provider’s shares are up 5% to $3.37.

Why is the Whispir share price charging higher?

Investors have been buying the company’s shares following the release of its annual general meeting presentation.

At the event, the company’s chairman, Brendan Fleiter, spoke positively about its performance in FY 2020 and its outlook.

In respect to the latter, Mr Fleiter believes Whispir is well-positioned to benefit from favourable industry tailwinds.

He explained: “Our Company is also well-placed to capitalise on long-term macro communications trends with the pandemic fast-tracking the digitisation of operations and stakeholder communications.”

“This has increased organisational adoption of cloud-based systems and accelerated digital transformation projects to automate processes and increase productivity. As Whispir’s cloud-based platform enables organisations to quickly implement tools that facilitate these trends, digital transformation offers short and long-term growth opportunities for the business,” he added.

What is Whispir targeting in FY 2021?

Also at the event, management reiterated its guidance for FY 2021.

It continues to target annualised recurring revenue (ARR) of $51.1 million to $55.3 million. This represents growth of 21% to 30% on FY 2020’s ARR.

In respect to earnings, Whispir is expecting to post another operating loss in FY 2021. It has provided guidance for an EBITDA loss of between -$6.23 million to ~$4.76 million. This represents a 14% to 35% improvement on its FY 2020 result.

Whispir also reiterated its research and development investment guidance of $9.2 million to $9.8 million. This will be a year on year increase of 8% to 15%. Some of these funds are being used for its five-year platform development strategy, which is focused on significantly increasing its AI and machine learning capability.

Mr Fleiter concluded: “We enter FY21 with momentum in the business and multiple growth drivers to achieve our FY21 targets and deliver sustained value creation.”

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Returns as of 6th October 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia has recommended Whispir 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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