Small-cap software developer Prophecy International Holdings Ltd [ASX:PRO] is on a tear today.
The tiny stock is up 18% for the day, at time of writing. And even more impressively, is up 50.44% in the past five days!
Suffice to say, this small-cap is enjoying some serious time in the trading limelight lately. All of which is thanks to some fantastic progress and results coming out of the company.
Let’s take a closer look at all the details…
Rapid growth to kick off FY22
The cause for today’s share price surge is thanks to some fantastic sales growth reported by Prophecy. Led by an 800% increase in year-on-year sales of eMite — Prophecy’s call centre analytics platform.
As a result, the company has raked in $3.2 million from subscription sales.
Plus, their other key product — Snare — a cybersecurity solution is also delivering some great results too. A 46% year-on-year increase in sales is certainly nothing to scoff at, particularly when it’s drawing in $2.2 million.
Together, these this fantastic growth has helped raise Prophecy’s overall recurring revenues to new heights. Pushing the small-caps annual subscription revenues to $13.6 million.
A combination that is bound to please investors and reinforce Prophecy’s ongoing growth goals.
As management makes note in regards to the two deals:
‘During the quarter, Prophecy signed several prominent US and Australian businesses as new eMite customers on contracts with duration spanning up to 3 years. These new customers include global beverage company Lion Pty Ltd, pharmaceutical multinational Johnson & Johnson, Bausch Health, the world’s largest car rental company Enterprise Holdings, the City of San Diego and 1800 Flowers (an up-sell of 545 new agents).’
‘Prophecy’s focus on the US and Europe as key growth drivers continue to deliver strong increases in sales for Snare. This is the Company’s cybersecurity software product line, through which it provides critical government recommended or mandated security controls, including cyber threat detection, security information and event management (SIEM) and centralised log management.’
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What’s next for Prophecy?
Having gone from strength to strength, the focus for Prophecy is simply more growth.
They’re a company whose entire investment proposition revolves around improving recurring revenues. A goal that relies upon the value of their software to customers and their ability to market it.
So with that in mind, this recent surge could kick-start some serious momentum for the stock. Particularly if they can land more big-name clients and make a name for themselves.
A perfect example of an undervalued small-cap that has managed to deliver a breakout performance. Something that is perhaps more common than you might think at this end of the market.
Because while the ship may have already sailed for the early investors in Prophecy, there are plenty of similar stocks waiting for their right moment too. Like the four overlooked small-caps we’ve put together in our latest report, which you can read all about for free, right here.
Regards,
Ryan Clarkson-Ledward,
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here
