ASX small-cap stock WRKR Ltd (ASX: WRK) has nearly doubled in value over the last year.
For those unfamiliar, Wrkr is a financial technology company.
It engages in the design of innovative overlay capability for banking, wealth management, pensions, and financial services. Its activities include ClickSuper, which provides clearing house services for large employers and small medium enterprises.
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What did the company report?
Last week, the company released a quarterly report, which included:
- Cash Receipts: $4.3 million, driven by recurring Wrkr PAY transactional activity, feature development for Precision Administration, and integration of PaidRight revenue
- Operating Outflows: $6.4 million, reflecting strategic investment in 14 new FTEs to bolster delivery and operational support, the acquisition of PaidRight, and increased investment in marketing our direct-to-market clearinghouse
- Strategic Capital Investment: $2.1 million invested to ensure platform scalability, data migration, and continued API development to capture potential opportunities with new Digital Service Providers
Speaking on the results, Wrkr CEO, Trent Lund said:
This quarter was about proving Wrkr can deliver. Seeing large employers transition to Rest Pay and AustralianSuper is a powerful validation of our technology and our capacity to execute.
We are proactively collaborating with our clients to accelerate adoption. We recognise that, while large enterprises are leading the charge, the mid-market and small-business segments are working through their own transition timelines. We are ready for them, and we remain laser-focused on scaling our transaction revenue as these businesses onboard onto our infrastructure.
What is Morgans' view on this small cap?
This week, the team at Morgans released updated guidance on this ASX small-cap.
Interestingly, the broker said that while cash outflows have increased to support growth, the business appears to be tracking well operationally. Accordingly, this is highlighted by the successful live launches of REST Pay and AustralianSuper.
Off low bases, we lift our WRK FY26F EPS by +7% but lower our FY27F EPS by 6% on a broad review of our earnings assumptions. Our target price is unchanged at A$0.14. We continue to think WRK is well positioned for a significant earnings inflection point in FY27, and we maintain our BUY recommendation.
On Friday, this ASX small-cap closed trading at 12 cents per share.
The 14 cents per share target from Morgans indicates a potential upside of approximately 17% for this ASX small cap.
