The MyDeal.com.au Ltd (ASX: MYD) share price was out of form again on Tuesday despite a rebound in the tech sector.
The ecommerce company's shares fell 2.5% to end the day at 93 cents. This compares to a gain of almost 2.5% by the S&P/ASX All Technology Index (ASX: XTX).
This latest decline means the MyDeal share price is now down 22% since this time last month. It also means that the company's shares are now trading 7% below its October IPO price of $1.00.
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Why is the MyDeal share price under pressure?
The recent weakness in the MyDeal share price appears to have been driven by weakness in the tech sector due to rising bond yields.
This has offset a solid half year update in February which saw the ecommerce company deliver very strong sales and customer growth.
For the six months ended 31 December, MyDeal reported a 217% increase in gross sales to $126.7 million and a 248% jump in revenue to $21.2 million.
This strong growth was driven by a 205% increase in active customers to 813,764 and further improvements in repeat use. Approximately 53% of second quarter transactions came from returning customers. This was an increase from 38.5% a year earlier.
Is this a buying opportunity?
One person that appears to believe the MyDeal share price is good value is the company's Chair, Paul Greenberg.
Earlier this month, Mr Greenberg picked up 100,000 MyDeal shares at $1.08 to $1.11 per share. This lifted the Chair's holding to a total of just under 1.7 million shares.
A leading broker that would approve of this purchase is Morgans. In response to the company's half year results last month, the broker retained its add rating and $1.70 price target.
Based on the current MyDeal share price, this price target implies potential upside of almost 83% over the next 12 months.
Morgans was pleased with its performance, strong start to the second half, and its plans to invest in marketing to drive further growth in private label sales.
