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

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up over 3% to 32.5 cents. This morning, the counterdrone company released a presentation ahead of its appearance at the Canaccord Genuity Defence Conference Presentation. This appears to have gone down well with some investors that were in attendance.

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price is up 3% to $8.08. After initially opening lower, this energy giant's shares are now rising despite the collapse of its takeover. Some investors could be betting on an improved offer being made. Alternatively, they may believe that there could be a good long-term investment opportunity here based on the takeover interest.

ResMed Inc. (ASX: RMD)

The ResMed share price is up 1.5% to $24.66. This follows a solid session for the sleep treatment company's shares on Wall Street overnight. In addition, it is worth noting that the healthcare sector is one of the only sectors rising on Tuesday.

Whispir Ltd (ASX: WSP)

The Whispir share price is up 10% to 54 cents. This morning, this cloud communications company revealed that it has received a letter of intent from Zipline Cloud setting out its intention to submit a non-binding indicative proposal to acquire it. The indicative offer will be at a premium to the current offer on the table from Soprano of $0.48 per share.

The post Why Droneshield, Origin, ResMed, and Whispir shares are pushing higher appeared first on The Motley Fool Australia.

The ASX tech share closed on Friday trading for 30 cents. At the time of writing, shares are swapping hands for 48 cents apiece, up a whopping 60%.

Here's why investors are snapping up shares of the software-as-a-service (SaaS) provider today.

What did the ASX tech share report?

The Whispir share price is rocketing after the company reported it has received an off-market takeover bid from Soprano Design Australia Pty Ltd to acquire all of its shares.

Soprano is offering 48 cents per share in cash, which is now the current trading level. Soprano said that, in the absence of an alternative proposal or a competing proposal, this is the best and final and won't be increased.

Noting the 60% premium on offer relative to the Whispir share price at market close on Friday, Soprano highlighted the following key attractions of its unconditional offer:

• The offer provides cash certainty for your investment
• Shareholders will no longer be exposed to the inherent risks of owning shares in a listed company
• No stamp duty or brokerage fees in accepting the offer

Soprano also said it will vote against any competing takeover offers that could potentially arise for the ASX tech share, revealing that it currently owns 15% of Whispir shares.

Additionally the company stated, "If a competing takeover proposal emerges, it will not accept any of its Whispir shares into the competing takeover proposal."

Soprano chair Richard Favero added that, "Soprano believes that the likelihood of an alternative proposal or a competing proposal emerging for Whispir is low."

Whispir share price snapshot

With today's big lift factored in, the Whispir share price is back in the green for 2023, up 12%. The ASX tech share remains down 2% from where it was trading this time last year.

The post Whispir share price rockets 60% with ASX tech share in takeover crosshairs 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 pushing higher:

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 24% to 33 cents. Investors have been buying the drone defence technology company's shares after it announced a $33 million order from a government agency in the United States. The record-high award will see Droneshield supply equipment alongside multi-year services.

MMA Offshore Ltd (ASX: MRM)

The MMA Offshore share price is up 4% to $1.23. This has been driven by the release of a trading update this morning. The marine service provider revealed that it expects its earnings before interest, tax, depreciation, and amortisation (EBITDA) for FY 2023 to be in the range of $66 million to $68 million. This will be an increase of over 100% on the EBITDA it reported in the previous financial year.

Whispir Ltd (ASX: WSP)

The Whispir share price is up 5% to 30.5 cents. This follows the release of the communications-as-a-service platform provider's quarterly update. Although the company reported a small quarter on quarter decline in cash receipts, it revealed significant progress in its quest to become free cash flow break-even. As a result, management expects to generate positive cash flow during FY 2024.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up 3% to $6.86. This morning, this coal miner released its quarterly update. It revealed a 19% quarter on quarter increase in managed run-of-mine (ROM) production to 5.1 million tonnes. This took its FY 2023 managed ROM coal production to 18.2 million tonnes. This was at the low end of its full-year guidance range of 18Mt to 19.2Mt.

The post Why Droneshield, MMA, Whispir, and Whitehaven Coal shares are pushing higher appeared first on The Motley Fool Australia.

Upward pressure on interest rates has seen investors flee from growth stocks, which dominate the tech sector.

In fact, despite a rally this year, the S&P/ASX All Technology Index (ASX: XTX) is still down more than 30% since November 2021.

Among these, businesses with smaller market capitalisations have suffered even more.

But Datt Capital chief investment officer Emanuel Datt reckons "valuations are beginning to look attractive" for these types of shares. 

"Small caps present many compelling reasons for investing," he said.

"These include access to earlier-stage, higher-growth businesses, a broader range of sector opportunities to pick from and an ability to more easily back future trends."

Three cheapie small-caps to consider

For Datt, a recent phenomenon points to a possible revival in small-cap tech stocks.

That's the rise of generative artificial intelligence from the sudden entry of ChatGPT and GPT-4 into the zeitgeist.

"Artificial Intelligence or AI adoption is on the front burner for many small-cap tech focused companies," he said.

"We view this environment becoming more crowded and highly competitive."

Perhaps the most obvious ASX tech stock to benefit could be AI data provider Appen Ltd (ASX: APX).

"Appen… has experienced significant downward pressure on the share price at the same time as AI has catapulted into mainstream consciousness via the launch of OpenAI's ChatGPT," said Datt.

"ChatGPT has transformed AI from a vague and remote concept to a readily accessible real-world experience in a matter of months."

Intellihr Ltd (ASX: IHR), which employs AI for its human resources software, has also struggled with a falling share price.

Datt noted that it's "become the subject of merger and acquisition activity".

"The maker of AI based avatars that converse in real time with any audience is currently the subject [of] a takeover offer from Humanforce Holdings Pty Ltd, after experiencing a share price slide of around 75% last year."

Higher interest rates have hit companies like Bravura Solutions Ltd (ASX: BVS) pretty hard, according to Datt.

"Bravura Solutions lost more than 50% of its market value in calendar 2022," he said.

"Technology companies are also coping with higher cost inputs because of an inflationary environment impacting further development. They have been always particularly vulnerable to rising interest rates, which drive up the present-day cost of investing in future earnings."

Two ASX tech stocks that are just torching cash

On the other side of the coin, there are technology stocks that are also heavily discounted but Datt wouldn't go anywhere near.

"High cash-burn business models that have questionable sustainability, in our view, include call recording company Dubber Corp Ltd (ASX: DUB) and cloud based communications provider Whispir Ltd (ASX: WSP)."

The Dubber share price has lost a shocking 86% over the past year, while Whispir has fallen 82%.

The post 3 'compelling' ASX tech shares cheap enough to buy now appeared first on The Motley Fool Australia.

Shares in the technology stock closed at 45 cents yesterday and are currently swapping hands for 42 cents apiece.

This comes following the release of the software-as-a-service (SaaS) provider's half-year results for the six months ending 31 December (1H FY23).

Here are the highlights.

Whispir share price sinks on diving revenue

• Revenue of $28.8 million, down 27% from 1H FY22
• Net loss after tax of $13.7 million, compared to a net loss of $7.0 million in the prior corresponding period
• Earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $8.8 million, up from a net loss of $6.9 million
• Cash on hand as at 31 December of $9.4 million and $1.6 million in restricted cash

What else happened with the ASX tech share during the half year?

While the United States market was said to be "challenging", Whispir saw revenue in its Asian market increase 13% from 1H FY22.

With that in mind, the ASX tech share intends to refocus its resources away from North America and to ANZ/Asia, where it said telco partnerships are delivering a steady stream of customer leads.

On the positive side of the ledger, cost came down year on year, with the ASX tech share reporting cost of services of $11.9 million, down 27% from the $16.4 million reported in 1H FY22.

The company has no debt and said it's on track for positive cash flow in the current half.

What did management say?

Commenting on the results sending the ASX tech share lower today, Whispir CEO Jeromy Wells said:

Whispir is at a significant point in its corporate journey, offering a strong proposition to investors. Our telco partnerships and land and expand strategy are paying off, and we are seeing some healthy developments in our sales outlook in Asia…

We continue to take a prudent approach to managing cash while focusing on what Whispir does best – supporting existing and new customers to leverage our digital communications platform to enhance business operations for better outcomes.

What's next?

Looking ahead, the ASX tech share forecasts revenue of $58 million to $62 million for the full year and positive EBITDA for the second half of FY23.

"Over the next three to five years, we anticipate strong organic revenue growth of more than 20% year on year, as well as an improvement in gross margins above 65% as regions scale," Wells said.

How has this ASX tech share been performing?

It's been a rough full year for the Whispir share price, down 79% over 12 months.

2023 is showing more promise for the ASX tech share, which was well into the green at yesterday's close.

With today's intraday losses factored in, shares are down 8% year to date.

The post ASX tech share Whispir dives 10% as half year revenues plunge appeared first on The Motley Fool Australia.

Three that haven't gone down particularly well with investors are summarised below. Here's why these ASX All Ordinaries shares are falling:

Alcidion Group Ltd (ASX: ALC)

The Alcidion share price is down 3% to 15.5 cents. This healthcare technology company's shares have come under pressure despite reporting strong sales figures during the second quarter. Alcidion reported new sales of $16.8 million, with $4.2 million to be recognised in FY 2023. This led to FY 2023 contracted revenue hitting $32.9 million, which is up 21% on the prior corresponding period. For the first half, Alcidion recorded cash receipts of $18.8 million, which is up 15% year over year.

Electro Optic Systems Holdings Ltd (ASX: EOS)

The EOS share price is down over 7% to 64 cents. This follows the release of the technology company's fourth quarter and full year update. Unfortunately, EOS revealed that some sales opportunities that were previously expected to be signed and commence delivering revenue in the second half of 2022 have been delayed by customers. And while receipts from customers came to almost $41 million, the company still posted an operating cash outflow of $13.9 million for the quarter. This left EOS with a cash and equivalents balance of $21.75 million.

Whispir Ltd (ASX: WSP)

The Whispir share price is down 5% to 48.5 cents. Investors have been selling this communications management systems provider's shares after it reported a 9% year over year decline in cash receipts to $14.84 million during the second quarter. Though, it is worth noting that the prior corresponding period included COVID-19 vaccine rollout related revenues. Whispir ended the period with total cash and equivalents of $9.5 million, which it estimates to be 1.7 quarters of funding.

The post 3 ASX All Ordinaries shares getting hammered on quarterly updates appeared first on The Motley Fool Australia.

In afternoon trade, the communications management systems provider's shares are up a massive 46% to 73 cents.

At one stage today, the Whispir share price was up 72% to 85 cents.

Though, this beaten down tech share is still a world away from its 52-week high of $2.95.

Why is this tech share rocketing?

The catalyst for the rise in the Whispir share price on Tuesday has been the release of a positive update on the company's quest to be profitable.

According to the release, an internal restructure to place the company on track to be cash accretive from the third quarter of FY 2023 has been approved by the board.

Whispir intends to reduce its workforce by 80 roles or 30%, delivering annualised savings of approximately $14.3 million. The company will also scale back its investment in R&D, via a reduction in headcount in the product and technology teams, until sufficient cash is being generated to ensure sustainable and self-funded reinvestment.

Savings will also be realised across marketing, customer services, and administration functions, with the direct sales teams largely unaffected. Approximately 70% of the roles affected are based in Australia. A total of $1.8 million is anticipated to be incurred as a one-off restructuring cost.

Management highlights that this cost reduction will ensure the company's current annual recurring revenue (ARR) of $62 million exceeds its annualised cost base.

In light of this, with cash reserves of $17.1 million, Whispir will not need to raise capital to fund its ongoing operations. This had been a major concern for investors, which explains the rallying Whispir share price today.

Profitable growth

Whispir's CEO and founder, Jeromy Wells, commented:

We have taken this step to enable Whispir to establish itself as a profitable growth business. The Company has been through a period of significant growth which means that there are now areas that can be scaled back to pre-COVID levels for a period as the Company transitions to growing sustainably and profitably without the need for additional capital.

With this restructure we expect the Company will be both EBITDA positive and cash accretive from next quarter onwards. Given our confidence in the Whispir platform and the substantial growth opportunities for our Company, we are no less ambitious for the future. This plan ensures we will now have the financial stability to grow profitably and self-sustainably from this coming Quarter.

The post Guess which ASX tech share is surging 46% on news of earlier-than-expected profitability appeared first on The Motley Fool Australia.

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Maple-Brown Abbott portfolio manager Phillip Hudak offers his opinion on a trio of ASX shares that have plummeted recently.

Cut or keep?

The Motley Fool: Let's examine three ASX shares that have been devastated this year, and see if you think each of these fallen stars are now a bargain to pick up or if you'd stay away.

The first one is Whispir Ltd (ASX: WSP), an ASX growth stock which has plunged almost 80% year to date.

Phillip Hudak: It's currently a challenging environment for Whispir. There is, I suppose, a unique difference between Whispir's sort of SaaS model as compared to many other players out there. Transactional revenue, which is volume-based, represents about three-quarters of the revenue of the business as compared to platform and services, which makes up the remaining part. This makes the business highly volatile to movements in volumes and can materially impact Whispir's revenues. 

You've seen that actually come through from the pandemic-related messaging volumes, which boosted volumes from state health departments in the first half of FY22, and those volumes are mean-reverting. Even when you strip out the temporary boost that came through, the underlying growth potentially is limited and coming through from there. 

While the company has cash on hand and they're pretty confident on the business reaching positive EBITDA, we believe it's actually going to be a challenging environment, at least in the short term for the company.

MF: Fair enough. Next one is retailer Dusk Group Ltd (ASX: DSK), which is 39% down since the start of the year. I believe they sell candles, don't they?

PH: Yes, they do. Dusk is a really interesting company, and looking at the FY22 result, the training update that was provided was reasonably strong, although we acknowledge that they were cycling lockdowns in the PCP. 

The company noted that there's been recent evidence of customers trading down, although remains reasonably confident going into the Christmas period. Interestingly, gross margins are holding up, which is pretty similar to the commentary received from other retailers with the exclusion of Baby Bunting Group Ltd (ASX: BBN). Unlike most retailers, Dusk has a better inventory balance compared to other retailers in the space.

The risk of having to aggressively discount in a potentially slowing market is maybe less of a risk compared to other retailers out there in the space. Thus market cap is underpinned by a net cash position, and it's got a pretty healthy dividend coming through. 

There's no question that the macro conditions are expected to weaken here in Australia, although in the short term, the market is very bearish [on] retailers, and companies like Dusk are probably better positioned than other companies in the sector. 

I suppose the key risks for the company include consumer confidence, the shift we are seeing from spending on products to services by consumers, and the potential risks around comping more challenging like-for-like sales going forward.

MF: The third one is a transport company, isn't it? Kelsian Group Ltd (ASX: KLS).

PH: That's correct, yes.

It's been an interesting journey for the company. If you look at even going back to, I think, mid-2021, the stock was trading over $10 and the market factored in a number of NSW privatisation bus contract awards, which didn't eventuate for the company. And the share price's subsequently fallen materially there. 

The most recent results, the business has been impacted by labour issues and rising fuel costs, although the bus earnings are defensive with potential upside to come through with contract renewals and extensions. 

In addition to that is the medium-term growth that is expected to come through from the tourism recovery. And this is supported by positive commentary from recent peers providing positive trading updates. 

I suppose the key risk for the company is failure to renew bus contracts and further cost pressures coming through for the business.

MF: Great. And that one also gives out a bit of a dividend as well, doesn't it?

PH: Yep.

The post 2 'interesting' ASX dividend shares to buy and one growth stock to ignore: expert appeared first on The Motley Fool Australia.

After closing Tuesday at 78 cents, the tech stock sold for as low as 63.5 cents soon after the market opened for trade on Wednesday.

So what's going on?

Not happy, Jan

It seems investors were not happy with the company's latest update, released before market open.

Whispir has been a high-growth loss-making business that has been trying to reduce its cash burn this year in response to changed market conditions.

But the update for the quarter ending 30 September showed that its cash receipts of $14.42 million is down 15% compared to the prior period.

The figure is also down 11.5% on the same quarter one year ago.

Why did the cash receipt decrease?

Whispir is a provider of cloud-based corporate communications technology. As such, it saw increased demand during the COVID-19 pandemic with many Australians working from home.

The outfit blamed this phenomenon for the reduced cash receipts.

"This quarter's result reflects the reduction in COVID-19 related revenues compared with the prior comparable period, and the impact of seasonality with the first quarter typically a softer quarter of the year," Whispir announced to the ASX.

"In contrast, cash receipts were up 38% against the same quarter two years ago – demonstrating that the business is still experiencing strong growth, COVID-19 aside."

Whispir's management insisted that its cost-cutting drive has been "effective".

"Operating cash payments across the three major categories of marketing, administration, and labour (excluding the annual short term incentive payments of $1.60 million which occur in this quarter only) total $14.56 million — slightly below the PQ of $14.84 million," stated the company.

"This is despite the weakening Australian dollar against the US dollar, which has affected a portion of the company's cost base."

Arduous march for investors

It's been a painful journey for Whispir investors in recent times, with the share price plummeting more than 71% over the past 12 months.

Whispir shares went for as much as $4.72 in July 2020.

According to CMC Markets, the tech stock is currently rated by one analyst each as a strong buy, moderate buy and hold.

The post This ASX All Ordinaries tech share just crashed 19%. What's doing? appeared first on The Motley Fool Australia.

Each of the offers ­– together worth more than $1 billion – was quickly rejected. Both companies said the firm's bid undervalued their business.

So, with Potentia seemingly on the hunt for a takeover and having had no luck so far, could other ASX tech shares be in its sights?

Let's take a closer look at the firm's apparent wish list and whether other stocks might fit the bill.

Potentia's $1 billion bidding spree

Nitro and Tyro have both knocked back takeover offers from consortiums led by Potentia recently. The former rejected a $1.58 per share bid late last month and the latter refused a $1.27 per share bid yesterday.

And while they work in entirely different spaces, it's not difficult to draw parallels between the pair.

Shares in the respective ASX tech titans have fallen 30% and 57% year-to-date.

Interestingly, both companies dubbed Potentia's respective bids "highly opportunistic".

Nitro's chair said the firm's bid for the company was lobbed in a period of volatility among tech shares on the ASX and around the globe.

With that in mind, let's look at the pair's most recent results.

Tyro posted $318.8 million of payments revenue for financial year 2022 (FY22) – a 39% year-on-year increase. Meanwhile, Nitro boasted U$32.7 million of total revenue for the first half of the year – a 36% improvement on that of the prior corresponding period.

It appears Potentia might have a type. Both payment services provider Tyro and document productivity company Nitro boast thriving revenue, zero debt, and a sold-off share price.

And it's not hard to find other ASX tech shares that fit the bill.

Could these ASX tech shares be in Potentia's sights?

It's been a rough year so far for ASX tech shares, in which many have suffered major sell-offs.

For instance, the Pointsbet Holdings Ltd (ASX: PBH) share price has plunged 67% year to date. The company – which grew its revenue by 52% in FY22 and holds no debt – will be dumped from the S&P/ASX 200 Index (ASX: XJO) later this month following its sell-off.

Stock in BetMakers Technology Group Ltd (ASX: BET) has also tumbled 49% so far this year despite the debt-free company recently posting a whopping 371.1% increase in revenue.

Other ASX tech shares that fit the bill include Whispir Ltd (ASX: WSP) and Bigtincan Holdings Ltd (ASX: BTH).

The former posted record FY22 revenue while the latter's revenue simultaneously lifted 143%. Their stock has fallen 62% and 41%, respectively, so far this year.

The post Nitro now Tyro: Could there be 'Potentia-l' for other ASX tech shares? appeared first on The Motley Fool Australia.

But it's fair to say 2022 has tested the nerves of investors in technology stocks.

The S&P/ASX All Technology Index (ASX: XTX) has now lost almost 35% over the past 12 months, and there is not much relief in sight with the Reserve Bank continuing to increase interest rates.

"With the benefit of hindsight, high-growth tech businesses proved to be the proverbial canary in the coalmine," said Forager Funds portfolio manager Alex Shevelev and senior analyst Gaston Amoros.

"The canary went very quiet during most of 2021 and then suffered a catastrophic heart attack in 2022."

Rock-bottom share prices don't match the fundamentals

If you're willing to be patient, though, there are some bargains to be snapped up right now.

"For some of these companies… the low share prices belie the trajectory of the fundamentals."

Shevelev and Amoros took PDF and e-signature tools provider Nitro Software Ltd (ASX: NTO) as a prime example.

"After raising capital at $3.43 a share in late 2021 to fund a European acquisition, [it] saw its share price trade down to almost $1 and has now received a takeover offer from private equity funds at $1.58 a share," they said.

"The company was quick in rejecting the offer as opportunistic and significantly undervaluing the business. We tend to agree with them."

Many tech companies have reined in their spending

The Forager team noted that the new environment of higher interest rates and scrutiny on growth shares has led to many tech companies to change their ways. 

"Software vendors, in particular, keep growing fast and are now displaying a newfound zeal in cost cutting that has pulled cash flow forecasts forward," they said. 

"It is not a coincidence that we are getting opportunistic take-private bids in this space."

Nitro's shares are up almost 50% since the rejected takeover offer, although they are still about a third down since the start of this year.

According to Shevelev and Amoros, Nitro is not the only one tightening its belt and looking ripe for investors willing to ride for the long term.

"There are other good software businesses out there that offer a similar risk-reward profile to the patient investor," they said.

"In our portfolio, we are very happy with our holdings in software vendors Whispir Ltd (ASX: WSP), Bigtincan Holdings Ltd (ASX: BTH), and RPMGlobal Holdings Ltd (ASX: RUL)."

The Whispir share price is down 60.5% for the year so far, while Bigtincan is 42.4% lower and RPM Global has lost 29.1%.

The post 4 ASX tech shares for the 'patient investor': expert appeared first on The Motley Fool Australia.

At the time of writing, shares in the communications platform provider are 3.8% in the green at $1.24. However, the share price did reach a high of $1.27 earlier in the session.

Whispir share price rallies despite costly growth

• Revenue up 48% on the prior corresponding period to a record $70.6 million
• Annual recurring revenue (ARR) up 22% to $65.4 million
• Gross margins slipped from 59.8% to 58.5%
• EBITDA loss deepened to $10.6 million from $3.8 million
• Net loss expanded to $19.5 million from $9.5 million
• Cash balance at the end of June 2022 of $26.08 million

While the bottom line worsened in FY22, the company took its revenue to the next level. The full-year reports indicate that this substantial growth was mostly underpinned by the Australia and New Zealand operations (ANZ).

Specifically, the ANZ business conjured up a 56% improvement in revenue. Whispir highlighted its partnership with major healthcare providers throughout COVID-19 as a part driver of this improvement.

Additionally, despite making a concerted effort to reduce expenses in the third and fourth quarters, operating expenses outpaced revenue growth year on year. These increases were said to have been driven by greater marketing, research and development, and admin expenses.

However, looking at the positive Whispir share price, it appears investors are focusing on the solid revenue growth today.

What else happened in FY22?

Turning to key events during the financial year, Whispir landed several notable deals. For example, the company signed a 36-month contract with The Department of Education South Australia, enabling 900 schools to make use of the platform for a variety of purposes, including internal communications.

Furthermore, an 8-year long contract was secured with a 'significant' Australian government department in FY22.

Pleasingly, while still a small portion of the business, Whispir grew its revenues in Asia and North America. Asia witnessed a marginal 1% increase, whereas North America delivered a 38% jump.

What did management say?

Commenting on the result, Whispir CEO Jeromy Wells said:

Whispir has again delivered a strong financial performance, with record revenues secured while reducing operating expenses in Q4. Our strengthened leadership team has contributed to Whispir's continued success as we set our sights firmly on becoming EBITDA positive in the second half of FY23.

Further bolstering confidence in the Whispir product, Wells stated:

Governments, enterprises and other organisations are now clearly committed to a future where digitisation plays an essential role in ensuring communications are targeted, efficient and effective. The benefits of incorporating artificial intelligence, algorithms and data to inform how and when to communicate are becoming clear, and this realisation continues to drive our business in all markets. Put simply, it is becoming costly for organisations not to invest in intelligent communication services.

What's next?

Rather than a distinct range of financial expectations for FY23, management opted to go for a more general outlook commentary today. This might make the Whispir share price difficult to forecast in the near term.

Generally, the company is aiming to continue delivering strong revenue growth across all regions. In addition, management is aiming for gross margin improvements.

Finally, Whispir is eyeing positive EBITDA in the second half. Management believes this is achievable without further capital requirements.

Whispir share price snapshot

It has been a slobber-knocker of a last 12 months for the Whispir share price. Over this time, investors have watched as their shares have eroded 41% in value.

Likely the company's valuation has been punished during this time as the market abandoned its desire for unprofitable businesses. This is demonstrated by the 27% fall in the S&P/ASX All Technology Index (ASX: XJO) over the last year.

The post Whispir share price roars higher on record revenue appeared first on The Motley Fool Australia.

Firstly, it could be important to remember that investing is a long-term endeavour. What happens this month or even this year may be long forgotten in a few years from now. For example, the GFC saw huge declines for some share prices. But then there was a recovery for many businesses in the subsequent years.

But, during the time of a bear market, how are investors meant to invest and make returns?

Well, it may not necessarily be with something going up when everything else is going down. It may be finding a share, or shares, that has been hurt heavily but then goes on to recover strongly.

One of the fund management outfits that is typically effective at finding good opportunities during periods of volatility is Forager, which operates the Forager Australian Shares Fund (ASX: FOR).

Forager's advice

The Forager chief investment officer, Steve Johnson, had some wise words to say about the current investment environment for ASX shares. He said:

You need to identify businesses with characteristics that you like. Those characteristics might be the consensus view at the time that you find it, but you agree with it and you like it. You need to do your research and value the business and then you need to wait for the right environment.

What does that environment look and feel like? Well, you want to see a lot of selling. You want to see market panic and you want to see sector and business disdain. You yourself are probably going to be feeling very nervous and very uncertain. If you're not feeling that emotion then it's not a dysfunctional market.

What about the wider market? What sort of factors will we be able to see in the described scenario?

You're going to be reading bearish headlines in the paper or online and you're going to be seeing brokers downgrading their estimates for businesses. Really importantly, there's probably no obvious reasons for things to change in the short term. If it was obvious the share prices wouldn't be where they are.

That's what a dysfunctional environment feels like. And that's what we're seeing in the small cap end of the market at the moment.

What kind of ASX shares does Forager currently own?

In the latest Forager fund update, the company outlined a couple of quarterly updates from businesses in its portfolio.

Whispir Ltd (ASX: WSP) – Forager described Whispir as a communications technology business. The fund manager noted that the ASX share "burned through" $5.2 million of cash in the three months to 30 June 2022. It ended the quarter with $26.1 million in the bank account.

But, Forager said the cash flow figures don't give a true representation of the progress that the business has been making. The fund manager noted that commentary in the cash flow summary suggested revenue will exceed prior guidance of 42% growth and that costs are well controlled.

The fund manager thinks that the next financial year should already see free cash flow generation.

Bigtincan Holdings Ltd (ASX: BTH) — this business is described as a sales and training software provider. It finished the quarter with $39 million cash after utilising $4.9 million over the three months to June 2022.

Forager said that growing revenue and a declining cost base "should result in free cash flow" this financial year. The fund manager noted that the annual revenue run-rate rose a "healthy" 25% organically to $120 million. This was slightly above prior guidance and "sets the business up well for future years".

The post How and where can an ASX investor make money in a dysfunctional share market? appeared first on The Motley Fool Australia.

The trouble is not with the sector per se, but it's that tech is an industry full of growth stocks.

Most tech firms are offering something innovative to the market rather than trying to compete in an existing category. This means they're focused on growing the customer base. 

A growth stock relies on future earnings to justify its valuation. But now that interest rates are 175 basis points higher than three months ago, the cost of future performance is considerably higher.

This is why ASX growth and tech shares have suffered so much in 2022.

Multiple experts have told The Motley Fool that now the name of the game is to be profitable, or at least operate on positive cash flow.

The idea is that if you're generating your own cash then you need not borrow to keep the business going. Not borrowing means your fortunes are not dependent on low interest rates.

With this in mind, the team at Forager Funds this week named two ASX tech shares it holds that are heading in the right direction:

'Costs are well controlled'

Communications tech provider Whispir Ltd (ASX: WSP) burned through $5.2 million of cash for the quarter ending June.

According to Forager, it now has $26.1 million in its bank account.

"But the pure cash-flow numbers belie the progress the business has been making," Forager analysts stated in a memo to clients. 

"While the full results won't be released for a couple of weeks, commentary in the cash-flow summary suggested revenue will exceed prior guidance of 42% growth and that costs are well controlled."

While cash flow is negative at the moment, the Forager team reckons this will turn around fairly soon.

"Next financial year should already see free cash-flow generation."

Whispir shares have lost about half their value this year. The company will report its financials on 24 August.

Cyan Investment Management portfolio manager Dean Fergie told The Motley Fool last month that if Whispir can rein in its costs, it "could actually be quite a good business".

"This is one of these businesses that has got a really, really strong corporate client base, which is positive, [and] really, really strong growth in revenues."

'Free cash flow this financial year'

Corporate software maker Bigtincan Holdings Ltd (ASX: BTH) is in a similar spot, burning through $4.9 million last quarter, leaving $39 million in the bank.

The Forager team expects positive cash flow for this ASX tech share even sooner than Whispir though.

"Growing revenue and a falling cost base should result in free cash flow this financial year," the memo read.

"The annual revenue run-rate rose a healthy 25% organically to $120 million, slightly above prior guidance and setting the business up well for future years."

Bigtincan shares are down about 30% year-to-date. The company will reveal its results on 25 August.

While coverage is sparse on the $400 million tech company, both analysts surveyed on CMC Markets currently rate the stock as a strong buy.

The post 2 ASX tech shares about to go cash-flow positive appeared first on The Motley Fool Australia.

There are plenty of businesses that have seen big falls.

At the time of writing, before Thursday's trading, these are some examples of the falls we've seen in 2022:

The RPMGlobal Holdings Ltd (ASX: RUL) share price has dropped 23%.

The Whispir Ltd (ASX: WSP) share price has declined 53%.

The Bigtincan Holdings Ltd (ASX: BTH) share price has fallen 31%.

Of course, every fall is different and each investor may have a different thought about why they sold (or bought) at a lower price.

However, some investors may be thinking it's possible that some of these unloved names could have been oversold. Only time will tell for sure, but let's take into account some thoughts from some expert investors on the situation.

Forager is a fund manager that has a reputation for often finding sold-off opportunities.

The Forager Australian Shares Fund (ASX: FOR) investment team recently gave some comments discussing the types of companies the fund is currently invested in:

On the current portfolio and RPMGlobal

Forager senior analyst Alex Shevelev said:

Some of these investments are in businesses that are currently loss-making. And you might be asking why a value biased fund manager is investing in companies that are loss-making. Well, we've actually had quite a bit of success in this space over the last 10 years of the existence of the fund.  Jumbo Interactive Ltd (ASX: JIN) a couple of years back was a great example [and] RPM is a good more recent example. These companies are frequently misunderstood, and it's exactly because of that short-term lack of profitability that the companies can sometimes build up significant long-term value.

On Whispir

The Forager analysts pointed out to investors that the ASX shares they are interested in have proven business models. They have a proven product that "solve real customer needs and that already generate decent and growing amount of revenue."

Forager senior analyst Gaston Amoros said this about one of the holdings:

Just to give you an example, Whispir already caters to some very large customers and if clearly addressing need to manage communications with customers and employees more efficiently and effectively.

What about Bigtincan?

Shevelev gave further comments on the types of ASX shares they're looking at and another holding:

There's also a lot of recurring revenue in these businesses. Now, customers tend to stay very sticky to these products. They're often mission critical and they're very difficult to rip out and replace with competitive products. So, a company like Bigtincan, for example, the sales enablement business, they have the vast majority of their customers from the prior year stay with them.

Foolish takeaway

So, it'd probably be wise to think individually about each business that has been sold off. But, ASX shares that have proven business models, have loyal customers, are making revenue and address a key need could be interesting to look at in this environment according to the investment thoughts of Forager.

The post Loss-making ASX shares: Big investment opportunity or extreme risk? appeared first on The Motley Fool Australia.

In morning trade, the communications workflow platform provider's shares are down 10% to $1.10.

Why is the Whispir share price sinking?

Broad weakness in the tech sector appears to have offset the release of the company's reasonably solid quarterly update this morning and weighed heavily on the Whispir share price.

In respect to its update, for the three months ended 30 June, Whispir reported a 25.9% increase in cash receipts over the prior corresponding period to $16.96 million.

And while the company is not yet profitable, it has made an improvement with its cash outflows. During the period, Whispir reduced its free cash outflow by 15.8% over the prior quarter to $4.74 million thanks to its cost management program.

This left Whispir with a cash position of $26.1 million at the end of June, which management notes is sufficient to cover more than 12 months of cash burn in FY 2023. Though, it may not need it. Management believes that it will achieve positive EBITDA during second half of FY 2023.

What were the drivers of its growth?

According to the release, Whispir now has over 1,000 customers using its communications platform. All regions showed growth during the quarter, with North America the stand-out with a 16.7% increase over the prior quarter.

Another positive was its customer revenue retention (CRR) which came in at 125.5% in June. This was an improvement of 8.4% versus the prior corresponding period. Customer churn remains under 5%.

FY 2022 guidance

Whispir also provided the market with an idea of what to expect with its full-year results next week.

It advised that it expects to exceed the upper end of its revenue guidance range of $64 million to $68 million by up to 5%.

Management also revealed that it expects to exceed the upper end (the good end) of its EBITDA loss range by up to 10%.

One small disappointment, though, is that its annual recurring revenue (ARR) is only expected to be at the lower end of its $65.4 million to $70 million guidance range.

Whispir's CEO, Jeromy Wells, commented:

Whispir continues to sign new customers, expand its offering to existing customers, and find new markets and applications for its communications platform. With a robust cash position and a clear strategy for its three main geographical markets, the Company is well placed to achieve its goals of profitable operations during the second half of FY23 and becoming cash accretive during FY24.

The post Why is the Whispir share price tumbling 10% on Monday? appeared first on The Motley Fool Australia.

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Cyan Investment Management portfolio manager Dean Fergie reveals what he would do with three ASX shares that have lost half their value in 2022.

Cut or keep?

The Motley Fool: Now let's talk about three ASX shares that have seen their prices plummet in recent times.

What would you do with Playside Studios Ltd (ASX: PLY), which you've previously discussed with us. How do you feel about it these days? The share price has halved this year.

Dean Fergie: Look, Playside, I think it got pretty hyped up. They did a game called Dumb Ways to Die and released a bunch of NFTs on the back of it. So the characters within the game are called Beans, and they released 2,000 Beans. And they made, within a month, something like $7 or $8 million by selling the NFTs. Now, I don't have to tell anyone that the whole cryptocurrency and NFTs are not the flavour of the month anymore. So I think some of the hype that was in Playside has dissipated. 

However, in the last month they've signed an extended agreement with Facebook and Meta Platforms Inc (NASDAQ: META) to do more gaming development for them. They've got a couple of big games that they're about to release. So, for us, we think it's an A-grade gaming developer on a global stage, which is a small company based in Australia. 

And we think there's clearly been quite a bit of corporate activity in terms of Microsoft Corporation (NASDAQ: MSFT) buying Activision Blizzard last year. So for us a business like Playside, that's doing its own IP [intellectual property] in terms of gaming but also gaming development for some of the biggest gaming companies around the globe, is a great long-term investment.

MF: And for such a small company, it's profitable, isn't it? That's handy.

DF: That's right. Really, really strong growing revenues, but a nice blend of its own IP in terms of games, but also work for hire for some of the really, really big companies around town. So we think it's a great medium-term story.

MF: Great. So it sounds like you still have your holdings and are happy to hold onto them.

DF: Yeah. What's been really interesting about all of our holdings that have fallen pretty substantially over the last six months is that the news they've released has been, by and large, really, really positive. 

It's not like they've come out with strong earnings downgrades, that they've had debt covenants flow and all these things, haven't lost customers. Across the board, the news flow has been really positive, which has been in stark contrast to the movement in share prices.

MF: The next one is one that I don't think your fund has ever held — a software company called Whispir Ltd (ASX: WSP), which has also halved so far this year.

DF: This was one of these businesses that when it IPOed, we probably thought it was a little bit toppy in terms of its valuation. Maybe we were correct for a while. I think it maybe floated at around $1.50 and then went up to $4, and it's come back to a dollar or so.

This is one of these businesses that has got a really, really strong corporate client base, which is positive, [and] really, really strong growth in revenues. But, unfortunately, it's still running a pretty high cost base. So it still isn't profitable. Even though, from my memory, they said at the IPO they would be profitable in the next year, which they haven't been. And I would say right now, if any business should be cutting costs, it would be right now.

I think it's got a market cap of around $130 million and something like $30 million on its balance sheet. I think this is one of these businesses, it's probably worth investors having a closer look at, because they've got a good commercialised messaging product with Bluetooth clients, a strong balance sheet, growing revenues. They just need to dial back their costs and it could actually be quite a good business.

MF: So next month's results season will be pretty interesting for Whispir, won't it?

DF: Yeah. I think these businesses they've just got to stop burning cash. This is not a market where you can raise money easily, or if you want to raise money, it's going to be expensive because your share prices are so trash. 

So it's certainly one that if they start making the right noises, then I'd consider adding it to my portfolio.

MF: And the third one is Maggie Beer Holdings Ltd (ASX: MBH), which has halved since February. It's another one that you've discussed in the past. I wonder how you feel about it at this moment?

DF: Yeah… we've recently sold it. Their dairy assets, they're trying to sell them, but they haven't sold them yet. I think there's some challenges in terms of getting a decent price for them. 

But Maggie Beer products I think are selling quite well. The Hampers Emporium business, the online business that they bought a couple of years ago, is a good business, but I think it was a real COVID play.

You've seen it across the board with Adore Beauty Group Ltd (ASX: ABY), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN), and the like, all these online businesses had a great [few years]. 

As everyone gets back to normal, they're more likely to spend money going on an overseas holiday or interstate rather than sending a hamper to their friends. So I think there's some pressure there. 

Plus, on the cost side, in terms of packaging, logistics, transport, and the like, these businesses, their margins are going to come under pressure. And when you don't have an enthusiastic client base, I think their margins are going to continue to get squeezed in the medium term.

MF: Did you end up selling at a loss or a gain?

DF: We held it for quite a long period of time. Let me just have a look. We might have been close to square. Maybe a moderate profit. 

We would have done really nice if we'd sold at 50 or 60 cents, but we sold it in the high 30s, low 40s, having bought it a couple of years previously. So it wasn't as good as we thought it would have been. 

The post 'Great long-term investment': Expert names small-cap ASX share to buy for cheap appeared first on The Motley Fool Australia.

The All Ordinaries Index (ASX: XAO) is down 0.34% on the day so far. Earlier in the session, it was in the green.

However, these two ASX All Ords shares have outstripped the pack today and are posting tidy gains.

Whispir Ltd (ASX: WSP)

The Whispir share price is pushing 17.89% higher today on no news. Shares in the communication technology company have been punished in 2022, posting a loss of 48% in that time.

What could be behind the rise in this tech share today is a fall in long-dated government bond yields.

Valuations of tech shares are closely related to movements in bond yields. The mathematical relationship roughly dictates that as bond yields fall, the valuations on risk assets such as tech shares begin rising, and vice-versa.

Indeed, the relationship is especially sensitive in technology shares. In fact, this has largely explained the large drawdown in the ASX tech basket in 2022. As yields have spiked, this has compressed tech share prices.

However, yields on long-dated government bonds have been in a consolidation phase since 14 June.

The current yield on the 10-year Australian note is 3.4%, dropping from a high of more than 4% last month.

Given the relationship described above, the pullback seems to be a bullish sign for tech shares like Whispir.

Certainly, investors are bidding up the stock today on a daily volume of 96% of the company's four-week average trading volume. The Whispir share price is now $1.12 apiece.

Eroad Ltd (ASX: ERD)

Investors drove the Eroad share price to a gain of 18.15% at the time of writing despite no market sensitive updates from the company.

However, similar to Whispir, this All Ords tech share has climbed along with the pullback in government bond yields.

Prior to today's gain, the company's share price had stamped its 52-week lows last week, closing at $1.26 on 30 June. This followed a sustained downward run across the 12-month period.

Unprofitable tech shares like Eroad endured a significant down-rating from investors in 2022. However, if the trend in bond yields continues, it could spell further upside for the sector.

In the last 12 months, Eroad has lost more than 71%, now trading at $1.66 per share.

The post Guess which ASX All Ords shares are serving up 15% gains today appeared first on The Motley Fool Australia.

The S&P/ASX All Technology Index (ASX: XTX) has plunged 40% since November.  And with more interest rates rises to come, immediate prospects still look grim.

But for those with long-term investment horizons, they need to grin and bear it if the business is continuing to perform.

Forager Funds is finding itself in exactly this position, with Whispir Ltd (ASX: WSP), Nitro Software Ltd (ASX: NTO) and Bigtincan Holdings Ltd (ASX: BTH) in the portfolio.

All three have halved their valuations since the start of the year.

Yikes.

Business performance is not linked to the share price dive

Forager, in a memo to clients, indicated the operational updates have been positive.

"Trends in revenue growth for all three remain at least in line with expectations, ranging from 24% at Whispir (using the recurring component of its revenue only) to more than 40% at Nitro."

A blessing in disguise due the current market rout might be that these businesses have cleaned up their costs.

"Nitro reduced its estimate of current year losses and expects to be generating cash flow in the 2024 financial year. 

"Bigtincan was already cash-generative in the March quarter and should improve from there."

With stock prices plummeting more than 50% this year, the market obviously doesn't believe these tech firms will make a profit soon enough.

But Forager sees no reason why its conviction should change.

"The current period losses are very modest in contrast with the long-term revenue annuities being built," read the memo.

"How valuable those annuities ultimately become is still to be proven, but as we get more evidence and if share prices continue falling, you should expect higher portfolio weightings."

Surging interest rates, Forager admitted, might further impact investors valuations of tech shares. But the operational impact on these three businesses is "minimal".

"Where the operating performance continues to justify our valuations, [we are] gradually increasing portfolio investments in the most heavily punished holdings."

The analyst community generally agrees with Forager.

According to CMC Markets, all seven analysts that cover Nitro rate it as a "buy". All four fund managers follow Whispir rate it as a "buy".

Bigtincan has just Canaccord Genuity covering it, but it has labelled it a "strong buy".

The post 3 ASX tech shares we're sticking with: Forager appeared first on The Motley Fool Australia.

The market is seeing a lot of volatility at the moment. Investors are focused on the high level of inflation and are trying to figure out what this means for interest rates as central banks try to control the situation.

While inflation may affect every business in different ways, investors are sending some business valuations down significantly, like these three:

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is currently down around 10.73%.

This means the ASX All Ordinaries share has fallen more than 60% over the last six months.

It was only a few days ago that Temple & Webster announced that in the second half of FY22, its revenue had grown by 23% between 1 January and 30 April 2022 compared to the same period in 2021. The company said its supply chain and stock position are underpinning growth.

It also announced the launch of its new home improvement website called The Build.

Whispir Ltd (ASX: WSP)

The Whispir share price is currently down by 10.4%.

It has now fallen more than 50% in the last six months.

In this ASX All Ordinaries share's recent quarterly update for the three months to 31 March 2022, it said its cash receipts rose by 81.6% to $19.8 million. The cash outflows reduced as the company's cost efficiencies and savings were realised. Free cash outflow for the quarter was $5.6 million, ending with cash on hand of $31.2 million.

It said annualised recurring revenue (ARR) rose by 24.1% to $62.4 million. Whispir also said it signed 82 new customers during the quarter, with the North American market continuing its sales momentum.

The management of the business said it fully expects the sales momentum to continue into the last quarter, which is traditionally the company's strongest quarter of the year, according to the CEO.

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is currently down around 11%.

That means this ASX All Ordinaries share has dropped around 70% in the past six months.

Adore Beauty has continued to see business growth. In the quarter for the three months to 31 March 2022, revenue rose 9% to $42.7 million and active customers went up 7% to 880,000. Returning customers grew by 47%.

In that update, the company said that during the quarter, the mobile app accounted for more than 10% of revenue, with loyalty members accounting for more than 60% of revenue. It noted it's on track to launch its private-label offering in the fourth quarter of FY22.

The post 3 quality ASX All Ordinaries shares tumbling 10% or more today appeared first on The Motley Fool Australia.