Its analysts have just picked out their top ASX stock picks in the sector. Let's see what they are recommending:

Flight Centre Travel Group Ltd (ASX: FLT)

Macquarie's top-rated ASX stock pick in the travel sector is Flight Centre. Macquarie has an outperform rating and $22.34 price target on its shares.

The broker highlights that Flight Centre recently guided for underlying profit before tax (PBT) of $365 million to $405 million for FY 2025. And while a soft first half performance has it tracking toward the lower end of that range, the broker isn't too concerned. It also notes that Flight Centre has historically delivered a second-half profit skew, so the required performance to meet guidance isn't unprecedented.

Macquarie also acknowledges that the near-term outlook is clouded by macroeconomic uncertainty, particularly in the Corporate division, with softness noted by several U.S. airlines. However, it points out that the medium-term picture remains favourable. Especially with Flight Centre gaining ground in its FCM Corporate business globally, and the SME-focused Corporate Traveller arm is also performing well. It said:

Looking through the volatility and near-term uncertainty, the medium-term growth outlook remains favourable; FLT continues to win market share in its FCM Corporate business, while the SME focused Corporate Traveller business is also tracking strongly. Further, several of FLT's large business started 2H25 strongly including the global Leisure business, Australian Leisure business, Corporate Traveller USA, and Scott Dunn.

Serko Ltd (ASX: SKO)

Coming in second is New Zealand-based travel technology company Serko. Macquarie also rates as outperform with a price target of NZ$4.38 (A$4.07).

While Serko is still loss-making, the broker forecasts a notably improvement in FY 2025. This is expected to be driven by multiple growth levers, including the annualisation of its GetThere acquisition, an increase in bookings volume, and stronger average revenue per booking.

Macquarie also highlights that Serko is targeting significant top line growth in the coming years. It has guided for FY 2025 revenue of NZ$85–92 million and set an ambitious longer-term goal of NZ$250 million by FY 2030.

Web Travel Group Ltd (ASX: WEB)

Rounding out Macquarie's top three is Web Travel Group (formerly known as Webjet). However, it only has a neutral rating and $4.83 price target on its shares.

While not quite as favoured as the other two, Webjet still offers upside potential — particularly if it can execute on key margin and growth targets. It said:

WEB has guided to FY25 EBITDA of $117-122m, TTV of $5bn and medium term revenue margins of c6.5%. Management expects WebBeds FY26 EBITDA margins will return to c.50% and longer term are targeting FY30 TTV of $10bn.

The post What are Macquarie's top 3 ASX stock picks in the travel sector? appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price is up 2% to 80.75 cents. This may have been driven by a broker note out of Bell Potter. This morning the broker retained its hold rating but lifted its price target to 80 cents. It commented: "PointsBet released its Appendix 4C for 1QFY25 and, in short, it was a good quarter. The key highlights were: Turnover/handle up 3% to $626.8m; Net win (excl. iGaming) up 10% to $60.7m."

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 1% to $8.17. This is despite there being no news out of the airline operator on Friday. Though, it is worth noting that a number of travel shares are rising today. It is possible that with all their quarterly updates out of the way now, investors are piling into this side of the market once again. Following today's gain, the Qantas share price is now up an impressive 13% in a month and 64% since this time last year.

Serko Ltd (ASX: SKO)

The Serko share price is up a further 4% to $3.22. Investors have been buying this travel technology company's shares this week after it released its half year results. Serko reported an 18% increase in total income to NZ$42.7 million for the six months. And while it still recorded a net loss of NZ$5.1 million, this was a NZ$2.1 million improvement year on year. In addition, the company revealed that it is expanding its existing business in North America. This includes through a long-term partnership with global travel software and technology provider Sabre Corporation (NASDAQ: SABR). Part of the agreement will see Serko acquire Sabre's business travel management solution, GetThere. This will make it the number two online booking tool provider in North America.

Yandal Resources Ltd (ASX: YRL)

The Yandal Resources share price is up 7% to 31 cents. This morning, this gold explorer revealed that it is commencing follow up drilling at the emerging Siona gold discovery. Management advised that the 12-hole, 2,500 metre reverse circulation program will look to confirm the geometry and test the extent of mineralisation. Managing Director, Chris Oorschot, said: "With the Company in a strong cash position, the team is now focused on developing the Siona geology model as drilling progresses and delivering high-quality samples to the lab as efficiently as possible."

The post Why Pointsbet, Qantas, Serko, and Yandal shares are pushing higher today appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are climbing:

Firefly Metals Ltd (ASX: FFM)

The Firefly Metals share price is up 9% to $1.15. This morning, this copper explorer released an update on its Green Bay copper-gold project in Newfoundland, Canada. According to the release, recent exploration activities have led to a 42% increase in the mineral resource estimate at Green Bay. The total resource is now 59Mt at 2% copper-equivalent for 1.2Mt of contained metal. FireFly's managing director, Steve Parsons, said: "This outstanding result confirms Green Bay's status as one of the fastest-growing high-grade copper projects with genuine scale in the western world."

Premier Investments Limited (ASX: PMV)

The Premier Investments share price is up 11% to $34.19. Investors have been buying the company's shares today after it announced a merger agreement with Myer Holdings Ltd (ASX: MYR). The deal will see Myer acquire Premier's Apparel Brands business in Australia and New Zealand in exchange for the issue of 890.5 million new shares. The Apparel Brands business comprises Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui E. Upon completion, it will have $4 billion revenue and $152 million EBIT on a pro forma FY 2024 basis. The shares being issued will be distributed to Premier Investments shareholders on a 7.2 for 1 ratio.

Serko Ltd (ASX: SKO)

The Serko share price is up 25% to $3.08. This follows the release of the travel technology company's half year results this morning. It reported an 18% increase in total income to NZ$42.7 million and a net loss of NZ$5.1 million. The latter is a NZ$2.1 million improvement year on year. In other news, Serko is expanding its existing business in North America, including through a long-term partnership with global travel software and technology provider Sabre Corporation (NASDAQ: SABR). It will also acquire Sabre's business travel management solution, GetThere. This will make it the number two online booking tool provider in North America.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 11% to $3.09. Investors have been fighting to get hold of the buy now pay later provider's shares following the release of its first quarter update. For the three months, Zip reported group cash EBTDA of $31.7 million. This represents an increase of 233.7% over the prior corresponding period. A key driver of this was its US business. Zip's CEO and managing director, Cynthia Scott, said: "Our US business continued to deliver outstanding growth, with TTV up 42.8% and revenue up 43.9%, versus 1Q24, driven by ongoing engagement in higher-margin channels such as the App."

The post Why Firefly, Premier Investments, Serko, and Zip shares are roaring higher today appeared first on The Motley Fool Australia.

Shares in the ASX travel technology company closed yesterday trading for $2.46. In morning trade on Tuesday, shares are swapping hands for $3.10 apiece, up 26.0%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.4% at this same time.

Here's what's grabbing investor interest.

ASX tech stock rockets on acquisition news

The Serko share price is soaring after the ASX tech stock announced plans to expand its existing business in North America.

Via its long-term partnership with global travel tech provider Sabre Corp (NASDAQ: SABR), Serko will acquire Sabre's business travel management solution, GetThere.

Management said this will see Serko become the number two online booking tool provider in North America.

Serko expects its acquisition of the GetThere business for US$12 million to occur around 6 January.

Likely spurring investor interest, the company said its new total income aspiration of $250 million for FY 2030 reflects its current growth trajectory and the assessment of the size of the opportunities ahead.

Commenting on the deal sending the ASX tech stock flying higher today, Serko co-founder and CEO Darrin Grafton said:

As part of the agreement, Serko and Sabre have announced plans to co-develop and co-invest to bring new capabilities to the industry – all with the goal of empowering and delivering greater value to travel management companies, business travel buyers, and, ultimately, business travellers.

Serko delivers 18% half-year income boost

Serko also released its unaudited half-year results for the six months to 30 September today.

The ASX tech stock looks to be getting an added boost after reporting an 18% year on year increase in total income to NZ$42.7 million for the half.

"Total income growth, which accelerated in the second quarter, was underpinned by increased customer acquisition and higher volumes in unmanaged travel. Total income was up 18% on 1H24 and up 23% on 2H24," Grafton noted.

The ASX tech stock still was saddled with a net loss after tax of NZ$5.1 million, but that's a NZ$2.1 million improvement from the prior corresponding half.

The company achieved free cash flow of NZ$1.3 million, an improvement of NZ$5.0 million year on year. Adjusted free cash flow of NZ$2.3 million marked an improvement of NZ$6.0 million from the prior corresponding half.

"This is an important milestone for Serko, reflecting the disciplines in place to achieve material improvements in revenue without growing our underlying total spend," Grafton said.

"These outcomes reflect a sustained shift in how Serko operates and demonstrates our readiness to pursue new growth horizons," he added.

As for the balance sheet, the ASX tech stock had NZ$82 million cash on hand at 30 September.

The post Guess which ASX tech stock just leapt 26% on accelerating growth appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is down almost 10% to $4.82. This follows news that the uranium miner's CEO and managing director Duncan Craib, chair Wyatt Buck, and director Bryn Jones have sold a significant portion of their personal holdings. In respect to its CEO, Duncan Craib sold 3.75 million shares at an average price of $5.63 per share between Tuesday and Friday last week. The company's leader received a total consideration of over $21 million for the shares. Insider selling rarely goes down well with investors and is considered to be a bearish indicator by many.

Elders Ltd (ASX: ELD)

The Elders share price is down 3% to $8.21. This has been driven by the agribusiness company's shares going ex-dividend on Tuesday. Last week, Elders released its half-year results and reported a sharp profit decline. This led to the Elders board cutting its interim dividend by 22% to 18 cents per share. Eligible shareholders can now look forward to receiving this partially franked dividend in their bank accounts next month on 26 June.

Peter Warren Automotive Holdings Ltd (ASX: PWR)

The Peter Warren Automotive Holdings share price is down 12% to $1.88. This follows the release of a trading update from the automotive retailer this morning. Peter Warren advised that while revenue has continued to grow, it now expects its underlying profit before tax for FY 2024 to be in the range of $52 million to $57 million. Management notes that this is lower than market expectations and has been driven by a significant increase in vehicle supply, which has led to greater competition between dealerships and lower gross profit margins on new vehicles. In addition, customer demand for new vehicles has fallen due to cost-of-living pressures.

Serko Ltd (ASX: SKO)

The Serko share price is down 5.5% to $2.87. Investors have been selling this travel technology company's shares following the release of its full-year results. This was despite Serko reporting a 48% jump in total income to NZ$71.2 million and a 48% improvement in its net loss to NZ$15.9 million. Looking ahead, management is guiding to revenue of NZ$85 million to NZ$92 million in FY 2025. It also expects to become cash flow positive during the year.

The post Why Boss Energy, Elders, Peter Warren, and Serko shares are sinking today appeared first on The Motley Fool Australia.

The Aussie technology sector is waiting on the sidelines while the S&P/ASX 200 Index (ASX: XJO) rises 0.2%. Big names in ASX tech land are barely budging today as weak retail trade data dominates the headlines.

Companies like Xero Ltd (ASX: XRO), WiseTech Global Ltd (ASX: WTC), and NextDC Ltd (ASX: NXT) are wandering aimlessly into the closing bell. Despite the mooted performance among the popular names, a little-known tech player is shooting out the lights.

The numbers before the results

Today's star of the tech sector is none other than Serko Ltd (ASX: SKO).

Parading a humble market capitalisation of A$362 million, the travel and expense management software provider is one of the lesser-heard-about companies in the limited Australian technology space. However, that's not preventing it from reaching for the stars after a well-received ASX release.

The announcement is a two-part ensemble — hitting investors with a twofer to indulge in.

Beginning at the end — the latter half sheds light on ASX tech share's upcoming FY24 full-year results. With its official results only 28 days, the company entered its confession season. Fortunately for shareholders, Serko has only good doings to confess.

The New Zealand-based business shared its unaudited full-year figures for FY24. You better grab a seat to prepare for this. For the 12 months ending 31 March 2024, Serko's total income is estimated to be up 48% to $71 million.

Investors would also be chuffed to see 'completed room nights' on Booking.com for Business were 2.5 million — rising 65% from the prior year. Not only were more nights recorded, the average revenue per night rose 4% to €9.74.

For context, Serko's 'Zeno' platform is used in partnership with accommodation booking behemoth Booking.com — a company owned by Booking Holdings Inc (NASDAQ: BKNG). The product allows business clients to make arrangements easily.

ASX tech share lands another five years

Speaking of Booking.com, it's the first part of today's announcement.

Serko and Booking.com have signed a five-year contract, extending their existing partnership. The deal ties the two together until March 2029.

Management believes the contract sets the stage for further growth, with Serko CEO and co-founder Darrin Grafton stating:

This renewal is a significant milestone for Serko–providing a strong foundation for future global growth and scale. It reflects the successful execution of the partnership to date and the strength of the opportunities ahead. The progress made has directly driven material revenue growth for Serko under the partnership's revenue-sharing model.

Notably, the revenue share arrangement unlocks a new upside for Serko. While current volumes will maintain the existing split, higher volumes will be associated with a tiered system, with management touting the profitability potential of this change.

The ASX tech share has been unprofitable since the pandemic first hit in 2020.

Today's revenue share change might be the light at the end of the tunnel shareholders sought.

The post Guess which little ASX tech share is surging 20% on a huge income rise appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are storming higher:

Clarity Pharmaceuticals Ltd (ASX: CU6)

The Clarity Pharmaceuticals share price is up 10% to $2.82. This morning, this clinical stage radiopharmaceutical company announced that the first patient ever to be dosed with two cycles of 67Cu-SAR-bisPSMA at 8GBq achieved a complete response to treatment based on RECIST criteria. The release notes that the patient remains with undetectable levels of prostate specific antigen (PSA) for almost 6 months. PSA is a marker used to assess clinical response to treatment and an indicator of the recurrence of prostate cancer. No dose limiting toxicities have been reported in any of the patients treated in the trial to date.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 3.5% to 82.2 cents. This follows news that the counter drone technology company's share purchase plan has closed early due to very strong demand. The company decided to close the offer early to minimise the scale back of applications. DroneShield is raising $15 million from the share purchase plan. This follows the recent completion of a $100 million institutional placement, which was increased from $70 million due to strong demand.

IGO Ltd (ASX: IGO)

The IGO share price is up 5% to $7.74. Investors have been buying this battery materials miner's shares today following the release of its third-quarter update. IGO reported a 10% quarter on quarter decline in sales revenue to $160.8 million and an EBITDA loss of $15 million. This was due partly to lower spodumene sales and prices at Greenbushes. However, investors are overlooking this after it announced an additional 200,000 tonnes sale of spodumene concentrate to TLC, which was agreed post the quarter end. This means the Greenbushes operation will now stay active for the remainder of the calendar year.

Serko Ltd (ASX: SKO)

The Serko share price is up 19% to $3.40. This follows news that the travel technology company has signed a five-year renewal to its deal with travel booking giant Booking.com today. Serko CEO, Darrin Grafton, said: "This renewal is a significant milestone for Serko – providing a strong foundation for future global growth and scale. It reflects the successful execution of the partnership to date and the strength of the opportunities ahead. The progress made has directly driven material revenue growth for Serko under the partnership's revenue sharing model."

The post Why Clarity Pharmaceuticals, DroneShield, IGO, and Serko shares are surging appeared first on The Motley Fool Australia.

Here's why they could be worth considering for investors with a higher tolerance for risk:

Arafura Rare Earths Ltd (ASX: ARU)

Arafura Rare Earths could be a small-cap ASX share to buy according to analysts at Bell Potter. It is the owner of the Nolans Project, which aims to supply a significant proportion of the world's neodymium and praseodymium (NdPr) demand in the future. These are critical minerals in the production of high-performance neodymium magnets, which are used in everything from mobile phones and electric vehicles to wind turbines and military weapons.

Bell Potter has a speculative buy rating and 72 cents price target on Arafura's shares.

Readytech Holdings Ltd (ASX: RDY)

Another small-cap ASX share that could be a buy is Readytech. It is a leading provider of mission-critical software-as-a-service (SaaS) solutions for the education, workforce management, government and justice sectors. These are defensive markets, which bodes well for the company in the current tough economic environment.

It is for this reason that Goldman Sachs expects Readytech to "deliver mid-teens organic growth at an expanding profit margin through the cycle." Goldman has a buy rating and a $4.40 price target on its shares.

Serko Ltd (ASX: SKO)

A final small-cap ASX share that could be worth considering is online travel booking and expense management provider, Serko. Its Zeno offering is a next generation travel management application, using intelligent technology, predictive workflows and a global travel marketplace to transform business travel across the entire journey. The company has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a high risk buy rating and a $4.35 price target on the company's shares.

The post 3 exciting small cap ASX shares analysts are tipping for big things appeared first on The Motley Fool Australia.

Here's why analysts think they could be in the buy zone for investors with a high-risk tolerance:

Arafura Rare Earths Ltd (ASX: ARU)

If you're not averse to investing in the mining sector, then you might want to check out this rare earths developer.

Bell Potter rates it very highly. This is due to the huge promise of the company's Nolans project and the increasing demand for rare earths. It commented:

ARU is a rare earths developer advancing its Nolans project, a complete ore to oxide solution in Australia's Northern Territory. Rare earths, in particular Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy) and Terbium (Tb), are critical minerals in a de-carbonised economy as they are crucial in the production of permanent magnets for EVs and wind turbines. ARU's Nolans Project is sufficiently advanced, with binding offtake agreements for ~1,900tpa (43% of nameplate capacity). ARU are advancing construction activities ahead of final offtake and funding discussions. We anticipate production from Nolans to begin towards the end of 2025.

The broker currently has a speculative buy rating and 72 cents price target on Arafura's shares.

Serko Ltd (ASX: SKO)

Another small-cap ASX share to consider is Serko. It is the online travel booking and expense management provider behind Zeno Travel and Zeno Expense platforms.

The company's Zeno Travel platform provides artificial intelligence-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers.

Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud.

Citi is positive on the company due partly to its deal with travel giant Booking.com. It said:

Upgrading our forecasts, with further upgrade potential from CWT – Booking.com partnership With Serko calling out a strong start to the year, we upgrade our FY24e revenue forecast by +3% towards the top-end of the guidance range and reiterate our Buy/High Risk rating (target price +6%). With the CWT – Booking.com for Business partnership going live last week, we see upside risk to our forecasts as we see potential for it to accelerate active customer growth.

Citi has a high-risk buy rating and a $4.35 price target on its shares.

The post Rare earths and tech: 2 exciting small cap ASX shares brokers rate as buys appeared first on The Motley Fool Australia.

Wilson Asset Management recently lodged its June investment updates. The fund manager issues an update for each of its listed investment companies (LICs) every month.

The update for the WAM Microcap Ltd (ASX: WMI) fund noted that travel software company Serko was a significant positive contributor to its performance last month.

Overall, the WAM Microcap portfolio gained value over June and outperformed the S&P/ASX 200 Accumulation Index (ASX: XJOA).

This index is the S&P/ASX All Ordinaries Index (ASX: XAO) plus reinvested dividends.

The tiny ASX tech share building a global business

In its update, WAM described the small-cap tech share as a leading provider of online corporate travel booking and expense management software to customers across the globe.

Serko is a tiny ASX tech share with a market capitalisation of just $302 million.

Last month, Serko gave investors a trading update.

It reaffirmed guidance that its FY24 total income was expected to be between $63 million to $70 million.

Serko said if trends seen in the June quarter persist, it would go above the mid-point of its guidance range.

WAM commented:

We continue to believe the company's strong financial position will allow it to achieve operational efficiency and build a globally competitive business moving forward.

Share price snapshot

The ASX tech share closed on Friday at $3.72, down 2.36% for the day.

Serko shares have ascended 69.1% in 2023 so far.

But it hasn't been a smooth road for investors.

As the chart below shows, this ASX tech share has experienced huge share price fluctuations since it was listed in 2018.

WAM Microcap shares closed at $1.44, down 0.69% on Friday, and down 5% in the year to date.

The post The little ASX tech share that's building 'a globally competitive business': WAM appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some, such as WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM), focus on larger companies.

Another is WAM Microcap Limited (ASX: WMI). It focuses on small-cap ASX shares with relatively low market capitalisations at the time of acquisition.

The fund manager outlined these two ASX small-cap shares from its microcap portfolio in a recent monthly update.

Serko Ltd (ASX: SKO)

WAM described Serko as a leading provider of online corporate travel booking and expense management software to customers around the world.

Last month, the ASX travel software business gave investors a trading update at its annual general meeting (AGM) that confirmed its guidance provided in May that FY24 total income is expected to be between $63 million to $70 million.

WAM pointed out the company noted that if trends of the three months to June 2023 continue for the rest of the year, it expects to hit the mid-point of its guidance range.

In its concluding comments about the company, the fund manager said:

We continue to believe the company's strong financial position will allow it to achieve operational efficiency and build a globally competitive business moving forward.

Service Stream Ltd (ASX: SSM)

The fund manager says that Service Stream provides essential network services to the telecommunications, utility, and transportation sectors.

Last month, Service Stream said after lodging its FY22 tax return, it received a tax refund to the tune of $50.2 million, thanks to the company's eligibility for the "temporary loss carry back tax offset" initiative.

WAM said that the large tax refund has helped "alleviate" concerns about the short-term strength of its balance sheet. While the business would have been able to carry forward the tax loss against tax payable in future income years, the company said it would provide "an immediate cash flow benefit to Service Stream, but does not have any impact, other than refunded interest costs, on the FY23 operating result".

The fund manager then said:

We remain positive that Service Stream is able to deliver solid FY2023 full-year results and continue to deliver its services as a national multi-network service provider.

The post 2 ASX small cap shares that could be ready to outperform: fund manager appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

Atlantic Lithium Ltd (ASX: A11)

The Atlantic Lithium share price is down 3% to 48 cents. This is despite there being no news out of the lithium explorer. Though, it is worth highlighting that its shares have been under considerable pressure recently. For example, following today's decline, they are down 20% since this time last month.

Integral Diagnostics Ltd (ASX: IDX)

The Integral Diagnostics share price is down 4% to $3.04. This appears to have been driven by a broker note out of Morgan Stanley today. Its analysts have downgraded the company's shares to an underweight rating with a $2.70 price target. The broker has concerns over the medical imaging company's margin outlook.

Nexted Group Ltd (ASX: NXD)

The Nexted share price is down a further 5% to $1.17. Investors have been selling this education services company's shares since the release of an update on its performance in FY 2023 on Monday. Although Nexted has delivered strong growth in FY 2023, it fell short of the market's expectations. This led to Ord Minnett retaining its buy rating but slashing its price target from $1.90 to $1.65 today.

Serko Ltd (ASX: SKO)

The Serko share price is down 4% to $3.59. This is despite there being no news out of the travel technology company. However, it is worth noting that its shares are up strongly this year and have just hit a 52-week high. This could have led to some investors taking a bit of profit off the table today.

The post Why Atlantic Lithium, Integral Diagnostics, Nexted, and Serko shares are falling today appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some, such as WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM), focus on larger companies.

Another is WAM Microcap Limited (ASX: WMI). It focuses on small-cap ASX shares with relatively low market capitalisations at the time of acquisition.

The fund manager outlined these ASX small-cap shares from its microcap portfolio in a recent monthly update.

Temple & Webster Group Ltd (ASX: TPW)

WAM described Temple & Webster Group as an online furniture and homeware retailer. The company has a drop-shipping model where suppliers send products directly to customers. This enables "faster delivery times and reducing the need to hold inventory".

Last month, the ASX small-cap share announced it had returned to year-over-year growth after a prolonged period where operations were impacted by the COVID-19 pandemic.

The fund manager noted that Temple & Webster's full-year guidance for the earnings before interest, tax, depreciation and amortisation (EBITDA) margin was still 3% to 5%. The company also said that it had $100 million of cash with no debt.

WAM explained its bull case for the business:

We are pleased to see the company's investment in artificial intelligence to enhance its customers' shopping experience and boost competitiveness, and believe this will be an advantage to the business by gaining market share.

Serko Ltd (ASX: SKO)

The fund manager said this company delivered travel and expense solutions in more than 35 countries.

Last month, Serko released its FY23 result for the 12 months to 31 March 2023, which showed total revenue year-over-year growth of 154% to $48 million, beating its guidance range of between $42 million to $47 million.

Serko also reported that its online bookings had increased by 93%, with a 381% rise in occupied rooms through 'Booking.com for business'.

WAM said that Serko's results reflected "its focus on cost discipline, investments to improve scale and growth as well as the strong recovery in business travel in Australia and New Zealand".

The fund manager highlighted its key reasons for liking the ASX small-cap share:

We remain optimistic that it can achieve its guidance of $63 million to $70 million revenue in FY24, and its aspiration of $100 million in FY25, as business travel improves and their partnership with Booking.com for business continues to grow.

The post 2 ASX small-cap shares to buy that this fund manager is excited about appeared first on The Motley Fool Australia.

I think there are some relatively little businesses on course to grow into much bigger companies. And it's typically easier for a $100 million company to double in size to $200 million than it is for a $10 billion business to grow to $20 billion. Large companies can reach market saturation points and run out of suitable regions or customers to expand into.

One of the most exciting things on the ASX, in my opinion, is identifying businesses that could scale significantly in the next few years. I'm going to tell you about two of them.

Serko Ltd (ASX: SKO)

Serko describes itself as a leader in online travel booking and expense management for the business travel sector. The small-cap ASX share says its travel management app Zeno is "next generational", using "intelligent technology, predictive workflows and a global travel marketplace to transform business travel across the entire journey".

As travel demand rebounds, the ASX travel share is seeing a resurgence in performance. In the FY23 result for the 12 months to 31 March 2023, total income grew 154% to $48 million, while average revenue per booking increased 65% to $9.56. Serko's online bookings grew by 93% to 4.1 million, while its completed room nights on Booking.com for business were up 381% to 1.5 million.

The company was still going through travel recovery in FY23, so it made a net loss after tax of $30.5 million, but this was an improvement of 15% year over year.

In Serko's guidance for FY24, the company expects total income to be between $63 million to $70 million, representing growth of between 31% to 46%.

Aside from the ongoing travel demand, which is promising for a scalable software ASX travel share, I think the business has a positive future with its partnership with Booking.com. A lot of the growth came in the second half of FY23, so the FY24 first half's growth could also be very strong.

Travel management company CWT has committed to supporting an expanded Booking.com for business offering that will include "discounted business travel rates, access to membership rewards from a variety of loyalty programs and complimentary 24/7 travel agent support."

It aims to hit $100 million in total income in FY25, which could come with much-improved profit margins. The market appears to like what Serko has said recently, as we can see on the small-cap ASX share chart below.

Healthia Ltd (ASX: HLA)

Healthia comprises three divisions focused on different areas: bodies and minds, feet and ankles, and eyes and ears. The ASX healthcare share also has a growing network of clinics and stores across the country operating in these areas.

Each of these industries is fragmented, so there's plenty of room for the business to carry out acquisitions for a number of years, boosting its market share and scale.

I think the FY23 half-year result showed the benefit of the company's growth strategy. Healthia reported that for the six months to 31 December 2023, underlying revenue grew 34.3% to $124.9 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 48.2% to $18.1 million, and underlying net profit after tax (NPATA) went up 48.3% to $9.2 million. This demonstrates the company's scalability.

Pleasingly, organic revenue increased by 5.4%, showing that it doesn't need to make acquisitions to grow at a decent rate. It has an organic growth rate target of between 3% to 6%, which would deliver solid compounding potential when combined with rising profit margins and a growing dividend.

In FY23, it expects to achieve underlying EBITDA of more than $40 million. I think it could grow profit significantly over the next five to ten years, helping push the Healthia share price higher.

The post Strong potential: Why I'd buy these 2 ASX small-cap shares appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are falling:

29Metals Ltd (ASX: 29M)

The 29Metals share price is down 4% to $1.01. This morning, this copper producer released an update on its guidance for Capricorn Copper following the cessation of operations after an extreme weather event. Investors appear disappointed with its revised guidance.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price has crashed 15% to 43.2 cents. This follows the release of the embattled semiconductor company's annual general meeting presentation and speeches. Brainchip Chairman, Antonio J. Viana, commented: "Let me be clear, nobody at BrainChip is happy or content with our current position. We haven't hit any significant stride yet with respect to revenue."

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 2% to $6.36. Investors have been selling the airline operator's shares after it released a market update. Qantas revealed that it expects to post an underlying profit before tax of between $2.425 billion and $2.475 billion for FY 2023. This appears to have fallen short of what some investors were expecting from the flag carrier airline.

Serko Ltd (ASX: SKO)

The Serko share price is down 6% to $2.99. This is despite there being no news out of the travel technology company. However, with its shares up strongly since last week, some profit taking could be happening today. The Serko share price is still up 11% since last Tuesday despite today's decline.

The post Why 29Metals, Brainchip, Qantas, and Serko shares are falling appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are charging higher:

Nufarm Ltd (ASX: NUF)

The Nufarm share price is up 14% to $6.03. This follows the release of the agricultural chemicals company's half-year results. Nufarm reported a 7% increase in underlying net profit after tax to $142 million for the six months ended 31 March 2023. This allowed the Nufarm board to declare an unfranked interim dividend of 5 cents per share, up 25% year over year.

Serko Ltd (ASX: SKO)

The Serko share price is up a further 7.5% to $3.14. Investors have been buying this travel technology company's shares since the release of its full-year results yesterday, which revealed a 154% increase in total income to NZ$48 million. In response, this morning Citi has retained its buy rating and Macquarie has upgraded Serko's shares to an outperform rating.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is up a further 8% to $4.80. A positive trading update on Wednesday has put a rocket under this online furniture retailer's shares. Goldman Sachs was impressed with the update and has reiterated its buy rating with an improved price target of $6.40.

Xero Limited (ASX: XRO)

The Xero share price is up 9% to $102.50. This follows the release of the cloud accounting platform provider's full-year results. For the 12 months ended 31 March, Xero posted a 28% increase in operating revenue to NZ$1.4 billion, a 26% lift in annualised monthly recurring revenue to NZ$1.55 billion, and a 45% jump in adjusted EBITDA to NZ$301.7 million.

The post Why Nufarm, Serko, Temple & Webster, and Xero shares are charging higher appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that stop them from rising today are listed below. Here's why they are racing higher:

Life360 Inc (ASX: 360)

The Life360 share price is up 3.5% to $6.70. Investors have been buying this location technology company's shares after brokers responded positively to its first-quarter update. One of those was Bell Potter, which reiterated its buy rating with an improved price target of $9.00.

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price is up 4% to $1.42. This appears to have been driven by a positive broker note out of Ord Minnett. According to the note, the broker has upgraded this sports betting company's shares to a buy rating with a $1.70 price target. This follows news that the company is selling its US business to Fanatics Betting and Gaming for US$150 million.

Serko Ltd (ASX: SKO)

The Serko share price is up 29% to $2.73. This has been driven by the release of the travel technology company's full-year results. Serko reported a 154% increase in total income to NZ$48 million. Pleasingly, another strong year is expected in FY 2024, with management guiding to total income of NZ$63 million to NZ$70 million. This represents an increase of 31% to 46% year over year.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is up over 18% to $4.48. Investors have been buying this online furniture retailer's shares following the release of a trading update. Temple & Webster revealed that its sales were up 10% over the prior corresponding period during the last four weeks. This is a big improvement on recent sales trends.

The post Why Life360, Pointsbet, Serko, and Temple & Webster shares are racing higher appeared first on The Motley Fool Australia.

In morning trade, the ASX tech share is up a massive 28% to $2.72.

Why is this ASX tech share rocketing higher?

Investors have been scrambling to buy Serko's shares after the company released its full-year results.

Here's a quick summary of how the company performed for the 12 months ended 31 March:

• Total income up 154% year over year to NZ$48 million
• Average revenue per booking up 65% to NZ$9.56
• Online bookings up 93% to 4.1 million
• Completed room nights on Booking.com for Business up 381% to 1.5 million
• EBITDAF loss improved by 23% to NZ$21.8 million
• Net loss after tax improved by 15% to NZ$30.5 million
• Cash and short-term deposits of NZ$87.7 million
• Underlying average monthly cash burn NZ$2.7 million

What happened during FY 2023?

For the 12 months ended 31 March, Serko reported a 154% increase in total income to NZ$48 million. A key driver of this growth was the company's deal with travel giant Booking.com, which saw 1.5 million room nights completed via Booking.com for Business.

And while Serko continues to operate at a loss, its metrics are all heading in the right direction and its balance sheet remains strong. The company's loss after tax improved by 15% to NZ$30.5 million, leaving it with cash and short term deposits of NZ$87.7 million.

In addition, the company's cash burn has been reducing, which bodes well for the future. Management advised that its underlying average monthly cash burn reduced from NZ$3.3 million to NZ$2.7 million in FY 2023. Things were even better in the second half, with its underlying average monthly cash burn averaging NZ$1.8 million.

Outlook

Also giving the ASX tech share a boost today has been its guidance for FY 2024.

Management advised that it expects total income to come in at NZ$63 million to NZ$70 million. This represents an increase of 31% to 46% year over year.

This is expected to be underpinned by the continued business travel recovery, growth in active customers in Booking.com for Business, foreign exchange tailwinds, and improving average revenue per completed room night.

In addition, management advised that there are a number of initiatives which have the potential to drive further revenue growth. However, the timing and therefore the impact on FY 2024 revenues is uncertain.

As for costs, Serko anticipates a total spend of between NZ$86 million and NZ$90 million. This reflects its current investment plans and anticipated efficiency gains, partially offset by higher volume related costs.

The post Guess which ASX tech share is rocketing 28% on huge full-year results appeared first on The Motley Fool Australia.

Here's why they could be worth considering:

Airtasker Ltd (ASX: ART)

The first small cap ASX share that has been tipped as a buy is Airtasker. It is Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. Since launching in 2012, Airtasker highlights that it has enabled more than $2 billion in working opportunities and served more than 1.3 million unique paying customers across the world. But the company is only getting started. It estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US.

Morgans is a fan and sees huge upside for Airtasker's shares. It currently has an add rating and $1.05 price target on them.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios. It is one of the largest video game developers in Australia. It has a growing portfolio of its own titles and a number of work for hire deals with major publishers such as 2K Games and Activision Blizzard. The latter appears to demonstrate its growing reputation in the industry.

Ord Minnett currently has a speculative buy rating and 85 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap that could be a buy is online travel booking and expense management provider, Serko. It is the company behind the Zeno Travel and Zeno Expense platforms. The Zeno Travel platform provides AI-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. The company also has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a buy rating and $5.10 price target on the company's shares.

The post Here are 3 exciting small cap ASX shares analysts are tipping for big things appeared first on The Motley Fool Australia.

Here's why analysts think they could be in the buy zone:

Readytech Holdings Ltd (ASX: RDY)

The first highly rated small cap ASX share to look at is ReadyTech. It is an enterprise software company serving market verticals including higher education and local government.

ReadyTech has been growing at a strong rate for several years and continued this trend in FY 2022. Earlier this week, the company reported a 56.5% in revenue to $78.3 million and 45.5% jump in underlying EBITDA to $28.6 million.

Another positive was that the company's recurring revenue increased to 76% of total revenue from 65% a year earlier. This bodes well for the future and helped underpin an increase in the company's FY 2026 organic revenue target to over $160 million. This is more than double its current revenue.

In response to the update, the team at Goldman Sachs reiterated its buy rating with a $4.30 price target. Goldman believes that ReadyTech "remains materially undervalued relative to profitable SaaS peers."

Serko Ltd (ASX: SKO)

Another small cap ASX share to consider is Serko. It is the online travel booking and expense management provider behind Zeno Travel and Zeno Expense platforms.

The company's Zeno Travel platform provides artificial intelligence-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud.

It also has a game-changing deal with travel booking giant Booking.com which is beginning to take shape now COVID headwinds are easing. It is partly for this reason that Citi is very positive on Serko.

So much so, it currently has a high risk buy rating and $5.10 price target on its shares.

The post 2 exciting small cap ASX shares that analysts rate as buys appeared first on The Motley Fool Australia.