Why the Xref (ASX:XF1) share price is rocketing 32% to a record high

Here’s why this small cap is rocketing higher today…

| More on:
Vanadium Resources share price person riding rocket indicating share price increase

Image source: Getty Images

The Xref Ltd (ASX: XF1) share price has been one of the best performers on the Australian share market on Tuesday.

In morning trade, the human resources technology company’s shares jumped 32% to a record high of 49 cents.

The Xref share price has eased slightly since hitting its high but remains up 26% at 46.5 cents currently.

Why is the Xref share price rocketing higher?

Investors have been bidding the Xref share price higher today following the release of a strong fourth quarter update.

According to the release, Xref expects to report record sales of $6.37 million and cash receipts of $5.93 million for the quarter.

A key driver of this growth was the introduction of several big-name customers during the period. This includes the RACV, NIB Holdings Limited (ASX: NHF), and Prospa Group Ltd (ASX: PGL) in Australia. Outside Australia, the company added the New Zealand Ministry of Health, Brighton FC, Ferrovial Construction, and Eurofins Scientific.

Management notes that COVID-19 has accelerated the global demand for remote working. This has led to organisations seeking better ways to perform candidate verification, leading to growing demand for its self-serve platform.

Another positive which is likely to be giving the Xref share price a boost today, is that the company was cash flow positive during the fourth quarter. Management notes that its operating cash outflows were $3.43 million, compared to cash receipts of $5.93 million. This meant an operating cash surplus of $2.5 million.

As a result of this, the company ended the period with a cash at bank of $8.19 million. This is up from $2.94 million a year earlier.

Management commentary

Xref’s Executive Director and CEO, Lee-Martin Seymour, said: “The extreme unpredictability of market conditions in FY21 meant it was one of our most challenging financial years to date. However, we are proud of the many strategic decisions we made which resulted in us emerging from the pressures of the pandemic in our strongest position to date.”

“Over recent years we have focussed on building Xref’s online brand presence, third party ratings and self-serve products. This digital-first approach has been vital to our growth in 2021 as global employers search online for better ways to verify and measure talent. Our results not only reflect the critical nature and demand for the Xref platform but demonstrate the brilliance and professionalism of the Xref team. The year ahead will bring new products, sustained profitability and continued growth. We are all very excited to discover what FY22 will hold.”

The Xref share price is up over 150% since this time last year.

Should you invest $1,000 in Xref right now?

Before you consider Xref, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Xref wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor 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 has recommended Xref Limited. The Motley Fool Australia has recommended Xref Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Share Gainers

Why did the Dubber share price push 18% higher today?

Dubber shares have bounced from yearly lows.

Read more »

Two workers on site discuss the next stage of this civil engineering job, one points his hands upwards.
Share Gainers

Why did this ASX nickel share surge 23% today?

Investors keep rewarding ASX listed metals and mining companies in 2022.

Read more »

Share Gainers

Why BlueScope, Firefinch, Monash IVF, and South32 shares are pushing higher

These ASX shares are on form on Wednesday...

Read more »

Five happy miners standing next to each other.
Share Gainers

3 ASX mining shares surging more than 10% today

Metals and mining stocks continue to be rewarded in 2022

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop regarding the NRW share price
Share Gainers

Why these 2 ASX All Ordinaries shares are surging more than 20% today

Two ASX technology shares are leading the charge higher today.

Read more »

Rocket powering up and symbolising a rising share price.
Share Gainers

The Galileo Mining share price has rocketed 380% in a week. But this billionaire is still buying up big

The upside continues for the Galileo today.

Read more »

A laughing woman wearing a bright yellow suit, black glasses and a black hat spins dollar bills out of her hands signifying the big dividends paid by BHP
Share Gainers

Who wants to be a millionaire? If only you’d invested $10,000 in these ASX shares 10 years ago

You won’t believe how much you would have pocketed if you had bought these shares a decade ago.

Read more »

Rising share price chart.
Share Gainers

Why BlueScope, OFX, Pilbara Minerals, and Step One shares are pushing higher

These ASX shares are pushing higher...

Read more »