The Whispir Ltd [ASX:WSP] share price is down 11.3% today after a delay in new customer activations in Asia.
At the time of writing, WSP shares were trading for $2.50 a share, 30% down year-to-date.
Source: TradingView.com
Despite Whispir growing its annualised recurring revenue (ARR) year-on-year, investors focused on the company’s delayed sales in Asia, which impacted FY21 revenues.
WSP’s trading update
Whispir, the communications workflow software as a service (SaaS) platform automating interactions between people and organisations, today released a brief trading update.
While brief, it was enough to spark a sharp sell-off, as investors reacted negatively to news the company’s revenues were impacted by the pandemic.
The company did report year-on-year growth in ARR of 28.5%, hitting $53.6 million for FY21.
And in 4Q FY21 Whispir gained 51 net new customers, taking its total customer base to 801 — a 27.1% increase on the prior corresponding period.
Whispir revises FY21 revenue guidance
Whispir was forced to downgrade its revenue guidance after a resurgence of COVID-19 delayed new customer activations in Asia.
Whispir now expects to deliver revenue of about $47.7 million for FY21.
Although down from the previously reported guidance of $49–$51 million, the revised revenue estimate will still represent a 22% increase over the prior corresponding period.
As a result, Whispir also expects its FY21 EBITDA to be a $6.1 million loss.
Whispir share price outlook
Whispir CEO Jeromy Wells said he was confident the impact of COVID-19 on revenue from the Asia segment will prove ‘temporary’.
Mr Wells followed up by saying the revenue from Whispir’s ‘strong sales, particularly in Asia in H2 FY21, will materialise in the first half of FY22.’
Bullish investors prone to agree with Wells may find today’s sell-off a buying opportunity.
WSP has a market capitalisation of $330 million and a trailing price-to-sales ratio of 6.6.
For comparison, one of Australia’s largest SaaS companies TechnologyOne Ltd [ASX:TNE] has a price-to-sales ratio of 10 on a market cap of over $3 billion.AS
But bearish investors may find today’s revenue downgrade worrying given that in the 12 months ending 30 June 2021, Whispir reported a net cash loss from operating activities totalling $3.29 million.
It will be interesting to see how the market calibrates today’s news in the near term.
If small-caps like Whispir interest you, then I recommend reading Money Morning’s 2021 report on four high-value small-cap stocks.
In the report, Money Morning’s market expert Ryan Clarkson-Ledward discusses four undervalued stocks that could potentially soar in 2021.
Regards,
Lachlann Tierney,
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
