Airtasker Ltd (ASX: ART) has now been on the ASX for just over a year. How have the first 12 months been for the business?
For readers that haven’t heard of this company before, it provides a platform to connect households and businesses who need work done to people willing to do that work (for a fee).
IPO with a bang
Just over a year ago, Airtasker went through the initial public offering (IPO) process.
It listed with a price of 65 cents. But on the day of listing, it jumped 78% to $1.16. It went even higher in March, rising to $1.43. But it hasn’t been that high since.
Airtasker share price declines
By late July, Airtasker shares had fallen below $1.
At the end of 2021, they had fallen to 85 cents.
But, wait for it, the Airtasker share price has fallen another 27% in 2022.
Over the last year, the Airtasker share price has fallen by around 55%.
Why have Airtasker shares fallen so much?
The company has been hitting its guidance.
In fact, the FY21 result was ahead of guidance. In FY21, its revenue of $26.6 million was ahead of the prospectus forecast of $24.5 million and up 38% year on year. Gross marketplace volume (GMV) of $153.1 million beat the prospectus forecast of $143.7 million and was up 35% year on year.
The company suffered during the COVID-19 lockdowns for most of the first quarter of FY22. This led to FY22 first quarter GMV only increasing 6.2% year on year.
However, there has also been a broad sell-off with many ASX growth shares.
For example, since the start of 2022, the Zip Co Ltd (ASX: Z1P) share price has fallen by 66%, the Xero Limited (ASX: XRO) share price has dropped 31%, the Nanosonics Ltd (ASX: NAN) share price has declined 40% and the REA Group Limited (ASX: REA) share price has fallen 24%.
There has been a lot of talk about interest rates and inflation in recent months. Central banks are lining up interest rate increases to try to dampen inflation.
Warren Buffett has previously spoken about why interest rates can affect asset valuations:
The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature… its intrinsic valuation is 100% sensitive to interest rates.
How has Airtasker been performing recently?
It was not long ago that Airtasker reported its FY22 half-year result. Airtasker revealed a recovery of volume in the second quarter as lockdowns ended.
The bounce-back saw second-quarter GMV increase 39% quarter on quarter to $48.6 million and achieve a record weekly GMV run rate of $4.5 million in December 2021. This led to the second half GMV guidance being increased to a range of $107 million to $110 million, up from $105 million.
Airtasker is seeing rapid growth internationally. In the second quarter, its United States marketplace saw task growth of 71% quarter on quarter. United Kingdom GMV was up 121% year on year in the second quarter.
The company is investing significantly in marketing channels for core organic growth.
Based on the current share price, Airtasker has a market capitalisation of $258 million.