ASX Today — Live ASX News | XJO Rises as Earnings Season Continues

Medical devices developer Polynovo (ASX:PNV) is in a trading halt pending an announcement on ‘revenue performance’.

Does this allude to poor performance or an upgrade?

Is this a good or bad omen?

For the half-year ended 31st December 2022, Polynovo recorded revenue of $29.4 million, up 62% on 1H22.

Could the upcoming revenue performance announcement relate to the Biomedical Advanced Research and Development Authority (BARDA), PNV’s large US customer?

During 1H FY23, BARDA represented 7% of total Polynovo revenue from contracts with customers.

In its half-yearly, Polynovo said it anticipated ‘significant revenue upside in expanding its salesforce in existing and new markets’.

Lithium junior Lithium Energy (ASX:LEL) is up 30% in late afternoon trade after initial assays confirmed ‘massive intersections of over 400 metres of lithium-rich brines of up to 508 mg/L’ at two drill holes at LEL’s Solaroz Lithium Project in Argentina.

“Assay results to date have also confirmed that lithium concentrations are generally increasing at depth indicating a hydraulically linked system with heavier lithium rich brines settling lower into the aquifer,” stated Lithium Energy.

LEL executive chairman William Johnson said the assay results are ‘tremendously exciting’, suggesting a ‘potentially world class resource of lithium at Solaroz’.

Graphite producer Syrah Resources (ASX:SYR) continues its fall in 2023, exacerbated by a disappointing March quarter release which flagged the ‘moderation’ of production until graphite market conditions improve to justify upping ‘capacity utilisation’.

Syrah is the worst performer on the ASX 200 on Monday, down nearly 8%.

SYR is down 45% year to date and nearly 40% over the past month alone.

$SYR continues skid, hitting a fresh 52-week low on Monday. $SYR.AX #ASX #graphite https://t.co/e8gbVFtYH6 pic.twitter.com/hUzXsxzRiQ

— Fat Tail Daily (@FatTailDaily) May 1, 2023

Challenger bank Judo Bank (ASX:JDO) said it is on track to meet or exceed its FY23 guidance in a March quarter trading update.

JDO’s chief executive Joseph Healy said the bank’s strong March quarter led management to upgrade Judo’s underlying NIM guidance for the second half of FY23.

NIM guidance is now expected in the range of 3.3% to 3.5%.

Judo said it is on track to meet the rest of its FY23 guidance metrics.

Judo did say that the upgraded underlying NIM guidance stemmed from ‘temporary tailwinds’.

Does this mean the NIM upgrade is more circumstantial than structural?

$JDO, specialist in analogy. #ASX $JDO.AX pic.twitter.com/4ZLgSAuNdi

— Fat Tail Daily (@FatTailDaily) May 1, 2023

As my colleague, Ryan Clarkson-Ledward, dryly noted last Thursday:

‘If we were to put our cynical hat on for a moment, we could argue that AI is just the latest buzzword fad for tech to latch on to.

‘After all, it was around this time last year that ‘Metaverse’ was doing something similar. Today, almost all interest in that technology has dried up, despite some exciting developments in the sector.’

Look, I get that sentiment.

We’ve seen no end of ‘fads’ come and go over the past few years.

Cannabis, lithium, blockchain, metaverse, uranium…these are just a few areas which have boomed for a while, only to fall back down just as sharply.

And yet…

Over time, many of these sectors have quietly made a comeback and made good on their early promise.

And I expect big money will be made in each of these areas on their second coming.

There is a very common pattern in all exponential trends.

And my gut feeling is we’ll see it happen again with AI.

Generally, the pathway of investor psychology as a new idea takes hold is best reflected by something called the Gartner Hype Cycle.

It looks like this:

You can see the pattern here closely mirrors the behaviour of stocks in a new technology. It rises fast at first, only to fade just as quickly.

But then, eventually, it starts a more sustainable rise as the technology proves its initial promise.

Heres’ the thing…

If you can recognise where we’re at in this ‘hype’ cycle, you can make money all along the curve.

With AI, we’re clearly in that first phase where ChatGPT has triggered a wider awareness of AI technology.

Now, at this point of any new technology, people get carried away with the possibilities.

Imaginations run wild, and huge claims are made.

It’s not surprising that, at this stage, everyone wants a piece of the action.

Entrepreneurs and businesses eagerly pile in to grab their share of the cash investors are willing to throw at it.

And yet…

Despite the early potential on offer, every new technology generally takes more time to develop than investors first imagine.

So, if you get into early-stage AI companies now, make sure you take some profits off the table on any stock price rips.

Because after the first stage, there will be a point where the buzz fades away. At least for a while.

That second phase — the downturn phase before we get to the final growth phase — is the point where picking good stocks in a sector matters the most.

Most new tech is a game of winner take all.

And if you manage to nail one or two of these eventual winners, you could be riding the ‘Apples’ and ‘Googles’ of the next decade.

I don’t doubt there’s life-changing wealth on offer right now in AI.

https://www.moneymorning.com.au/20230501/how-to-invest-in-the-great-ai-disruption.html

The Melbourne Institute monthly inflation gauge for April rose 6.1% on an annual basis, up from 5.7% in March.

Trimmed mean inflation rose 5.5%, up from 5.2% in March.

That’s not exactly great news and suggests inflation is remaining sticky.

Source: IFM Investors, Melbourne Institute

The Melbourne Institute monthly inflation gauge for April rose 6.1% on an annual basis, up from 5.7% in March.

Trimmed mean inflation rose 5.5%, up from 5.2% in March.

That’s not exactly great news and suggests inflation is remaining sticky.

Source: IFM Investors, Melbourne Institute

Adore Beauty founders Kate Morris and James Height will exit their part-time executive roles at the retailer at the end of FY23.

They will remain on the Board, however, as non-executive directors.

Do they plan on selling their stakes?

Not any time soon, according to today’s announcement.

Both founders ‘remain committed to Adore Beauty and its future growth prospects, and have advised the Board that they have no current intention to sell their Adore Beauty shares’.

Adore Beauty founders Kate Morris and James Height will exit their part-time executive roles at the retailer at the end of FY23.

They will remain on the Board, however, as non-executive directors.

Do they plan on selling their stakes?

Not any time soon, according to today’s announcement.

Both founders ‘remain committed to Adore Beauty and its future growth prospects, and have advised the Board that they have no current intention to sell their Adore Beauty shares’.

Online beauty retailer Adore Beauty (ASX:ABY) saw its Q3 FY23 revenue slide 3.3% to $41.3 million.

Adore Beauty did quickly point out revenue was actually up 4.9% on a two-year basis!

Active customers fell 10% on Q3 FY22 to 793,000. What about the two-year basis? Down 3%.

The retailer said year-on-year comparisons ‘remain challenging with the prior period impacted by high levels of Omicron and mandated isolation’.

Adore Beauty CEO Tamalin Morton thinks the retailer’s ‘long-term outlook looks promising’:

“Adore Beauty is well-positioned to navigate evolving consumer trends and challenging retail conditions given cost-of-living pressures and interest rate increases, offering an extensive range that spans masstige through to luxury brands and price points to suit all budgets. Separately, cost optimisation initiatives are being implemented and we are working through our longer-term strategy. “While we are focused on delivering short-term targets, as the leader in a resilient category benefitting from structural tailwinds, Adore Beauty’s long-term outlook looks promising.”

By the way, that’s the first time I’ve come across the term ‘masstige’. Prestige for the masses? Mass-produced prestige?

Masstige is actually not a new term, already in use in the 1990s.

The Oxford English Dictionary defines masstige as a ‘class of mass-produced, relatively inexpensive goods which are marketed as luxurious or prestigious’.

Respiratory imaging technology company 4DMedical (ASX:4DX) completed the first commercial scan using its XV LVAS imaging capability.

4DMedical’s X-ray velocimetry lung ventilation analysis software imaging technology was used at the Harry S. Truman Memorial Veterans Hospital in the US.

4DMedical said the first scan provided the hospital’s physicians ‘with the insight only available through a four-dimensional scan’.

4DX shares opened 20% higher on Monday.

While the market took the inaugural news well, 4DMedical said the XV LVAS scan is ‘not immediately material from a revenue perspective’.

4DMedical founder Andreas Fouras said:

“This represents the first commercial scan at a VA Medical Centre, within a network that is larger than the entire hospital system across Australia. Just as importantly, the promise of utilising XV Technology to inform treatment for Veterans afflicted by respiratory disease has now been demonstrated in a routine VA hospital clinical setting. Furthermore, 4DMedical’s XV LVAS SaaS platform is extremely scalable, providing a proven basis for our ambitions to deliver rich respiratory health insights across the entire VA. Pursuing this opportunity with the VA is our highest priority.”

 

BNPL firm Sezzle (ASX:SZL) said it is running ahead of its plan for profitability in 2023.

Sezzle said the March quarter marked the third straight quarter of the fintech posting positive net income.

Net income for the March quarter totalled US$1.7 million, a big improvement on the net loss of US$28 million in the March 2022 quarter.

Sezzle said the results were ‘driven by the outperformance of our credit losses’.

Total 1Q23 revenue rose 25.5% to US$34.7 million, or 9.4% of underlying merchant sales. Meaning underlying merchant sales were around US$370 million for the quarter.

As of 31st March, Sezzle had US$60.6 million of cash on hand and US$59.8 million drawn on its US$100 million credit facility.

#BNPL firm $SZL said it's 'running ahead of its plan for profitability in 2023'.

1Q23 marked the 3rd consecutive quarter of $SZL.AX posting positive net income.

1Q23 net income was US$1.7m, a big improvement on the net loss of US$28 million in 1Q22. #ASX #Sezzle pic.twitter.com/JsGD9L08t4

— Fat Tail Daily (@FatTailDaily) May 1, 2023

BNPL firm Sezzle (ASX:SZL) said it is running ahead of its plan for profitability in 2023.

Sezzle said the March quarter marked the third straight quarter of the fintech posting positive net income.

Net income for the March quarter totalled US$1.7 million, a big improvement on the net loss of US$28 million in the March 2022 quarter.

Sezzle said the results were ‘driven by the outperformance of our credit losses’.

Total 1Q23 revenue rose 25.5% to US$34.7 million, or 9.4% of underlying merchant sales. Meaning underlying merchant sales were around US$370 million for the quarter.

As of 31st March, Sezzle had US$60.6 million of cash on hand and US$59.8 million drawn on its US$100 million credit facility.

#BNPL firm $SZL said it's 'running ahead of its plan for profitability in 2023'.

1Q23 marked the 3rd consecutive quarter of $SZL.AX posting positive net income.

1Q23 net income was US$1.7m, a big improvement on the net loss of US$28 million in 1Q22. #ASX #Sezzle pic.twitter.com/JsGD9L08t4

— Fat Tail Daily (@FatTailDaily) May 1, 2023