Why the Sequoia (ASX:SEQ) share price is racing 15% higher today

The Sequoia Financial Group Ltd (ASX: SEQ) share price is racing 15% higher following a trading update and revised guidance for FY21.

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The Sequoia Financial Group Ltd (ASX: SEQ) share price is on the rise in early afternoon trade. This comes after the company announced a trading update and revised guidance for FY21.

At the time of writing, the financial services company’s shares are fetching for 52 cents apiece, up 15.5%.

Sequoia performance snapshot

Investors are driving Sequoia shares within a whisker of reaching a new multi-year high following the company’s positive release.

In its announcement, Sequoia advised it is strongly performing to date with growth across key sectors.

A number of factors during the current financial year has led revenue to surge past what the company was anticipating.

The company attributed the increase to a number of factors including the successful integration of transactions. This includes:

  • Business and adviser acquisitions achieving better than expected results (including Panthercorp, Phillip Capital Advisers and Total Cover);
  • Surge in monthly trading volumes in Morrison securities;
  • Robust growth in brokerage and commissions from the financial planning and stock broking businesses;
  • Improved performance in the self-managed super fund (SMSF) administration and document businesses.

Sequoia noted that it is continuing to explore acquisition opportunities to add better value to its core customers.

Significant updated guidance

In further news boosting the Sequoia share price, the company provided an update guidance for FY21.

Previously in February on the release of its half-year results, Sequoia forecasted $110 million in revenue, and earnings before interest, tax, depreciation and amortisation (EBITDA) of $7 million.

However, after reporting strong trading conditions, the group is projecting an increase in revenue and EBITDA for FY21.

Revenue is predicted to soar between $110 million and $120 million, compared to the $84.5 million achieved in FY20.

EBIDTA is envisaged to exceed original estimates by roughly 25%, to come in the range of $8.5 million and $9 million. In the prior comparable period, EBITDA stood at $4.82 million.

Sequoia share price summary

Sequoia shares have skyrocketed over the last 12 months, gaining more than 180% on the back of positive investor sentiment. The company’s shares reached a multi-year high of 53 cents in the middle of February, before treading lower until now.

Sequoia has a market capitalisation of about $67 million, with 130 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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