After surging as high as $5.24 last year, shares in ASX tech company Whispir Limited (ASX:WSP) have lagged recently, with the Whispir share price sliding all the way back down to just $3.62 as at the time of writing – that’s a drop of over 30%. Has the wind gone out of the sails of this once up-and-coming tech company?
First, let’s take a look at what Whispir actually does
With a market cap still well under $400 million, Whispir may be flying under the radar for many investors, so it’s worth providing a little background on the company’s operations.
Whispir is a technology company that helps manage and streamline communications workflows for business clients. Its centralised platform helps customers create high quality, customisable templates for email, web and social media communications, as well as drive insightful reporting.
What drove the Whispir share price in 2020?
Whispir was one of a number of young ASX tech shares to have performed well even during the most restrictive coronavirus lockdowns imposed in Australia last year. The share prices of companies like Megaport Limited (ASX:MP1) and Nitro Software Limited (ASX:NTO) stormed to new highs in the latter half of 2020. However, they have also come off the boil in recent months.
What made these three companies so similar was their ability to meet the unique demands of the COVID-19 operating environment. Megaport’s cloud network services helped companies adapt to remote working environments by increasing their network connectivity and giving them the ability to manage their bandwidth usage.
Nitro develops software that digitises document workflows. It helped business clients to create, edit, sign and store important documents entirely online, reducing the need for traditional forms of hardcopy file management. Again, this service provided valuable support to companies forced to adapt to remote working and social distancing.
Whispir also supported its business clients through COVID-19 by helping to manage their communications obligations. The company was quick to develop standardised templates to assist in communicating with staff and customers throughout the pandemic. For example, the company reported that one of its clients, Mt Buller Ski Resort, had been using its communications templates to manage its contact tracing requirements.
More recent news
Whispir’s most recent market update was from all the way back in October 2020, when it reported on its financial results for the first quarter of FY21. The company onboarded 35 new customers during the quarter – its strongest first quarter on record – and grew annualised recurring revenue by 26.7% against the prior corresponding period to $43.7 million.
Given the strong start to FY21, it’s difficult to speculate on the reason behind the decline in the company’s share price.
For its part, Whispir is bullish on its outlook for FY21, despite the continued uncertainty caused by COVID-19. In his address at the company’s annual general meeting, Whispir CEO Jeromy Wells stated that the company was forecasting full year revenue growth for FY21 in the range of 21% to 30% to between $47.5 million and $51 million. Earnings before interest, tax, depreciation and amortisation expenses is also set to improve by between 14% and 35% year-on-year.
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Rhys Brock owns shares of MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO and Whispir Ltd. The Motley Fool Australia has recommended MEGAPORT FPO, Nitro Software Limited, and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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