Why the Objective (ASX:OCL) share price is racing to an all-time high today

Investors would be excited by the company’s strong share price gain lately.

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The Objective Corporation Limited (ASX: OCL) share price is defying the broader ASX market fall today. This comes after the information technology software and services company provided a trading update.

At the time of writing, Objective shares are up 2.66% to a record high of $18.17. In comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.2% higher to 7,341 points.

Let’s take a look at how the company travelled during the 2021 financial year.

How did Objective perform in FY21?

Investors are pushing Objective shares higher as investors took the time to digest the company’s latest results.

According to its release, Objective reported growth across all metrics based on unaudited management accounts.

For the financial year ending 30 June, revenue climbed by 36% to $95.1 million ($70 million in FY20). Annual Recurring Revenue (ARR) also lifted by 31% over the prior corresponding period to $74.2 million. This represents 73% of the total revenue achieved.

Both figures above increased due to the company’s continued investment in innovation, delivering important product releases for customers. Objective spent a record $23 million in research and development (R&D), accounting for 24% of FY21 revenue.

Earnings before interest, tax, depreciation and amortisation (EBITDA) surged by 49% to $25.6 million ($17.2 million in FY20). In addition, Net Profit After Tax (NPAT) moved 45% higher to $16 million. Objective stated that this was driven by strong organic growth and earnings accretive corporate development.

The company declared a healthy cash balance of $48.4 million at the end of the period. This includes the $18.4 million Itree acquisition earlier this month, and the $6.6 million in dividend payments during September 2020.

FY22 outlook

Looking towards the near future, Objective CEO, Tony Walls commented on the company’s FY22 outlook. He said:

In FY2022 we expect the momentum of our business to drive a continued material lift in revenue and profitability.

Our investment in innovation will deliver important product releases for customers including Objective Blind, Objective Nexus (cloud native ECM), Objective ECM 11 and Objective RegWorks iQ which, in addition to further investment in our existing product suite, will underpin new customer acquisition across all business lines and expansion opportunities for existing customers.

In addition to these significant organic growth opportunities, we will continue to actively seek acquisitions that offer additional product or market reach capabilities, where these can be acquired at reasonable valuations.

About the Objective share price

Investors would be wrapped with the Objective share price accelerating to an all-time high today. This reflects a gain of over 100% over the past 12 months and up 50% for the 2021 calendar year alone.

At today’s price, Objective has a market capitalisation of roughly $1.6 billion, with more than 94 million shares on issue.

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

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Motley Fool contributor Aaron Teboneras 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 Objective Corporation Limited. 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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