Here’s why the Airtasker (ASX: ART) stock price could be a buy

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The Airtasker Ltd (ASX: ART) The share price may be worth considering as the company could have great growth potential.

What is Airtasker?

For readers who don’t know what Airtasker is, it’s a platform company that connects people willing to work with people who need to work.

It offers a wide range of tasks, such as cleaning the house, DIY work, administrative work, photography, graphic design or building a website.

With that in mind, here are a few reasons why Airtasker’s share price might be an issue to consider:

Rapid growth

A company whose revenues increase rapidly over several years is more likely to generate good returns for its shareholders.

In FY21 alone, it posted 38% revenue growth to $ 26.6 million. This exceeded the prospectus forecast by $ 24.5 million. Gross profit rose 39% to $ 24.8 million.

The last fiscal year also saw Gross Market Revenue (GMV) increase 35% year-over-year to $ 153.1 million, beating prospectus forecast of $ 143.7 million. Two years ago, in FY19, his GMV was $ 93.2 million.

Underlying pro forma profit before interest and taxes (EBIT) increased 57.2% to a loss of $ 2.2 million.

Very strong margins

ASX stock says its user-aligned business model and lean operations generate strong gross profit margins.

In fiscal year 21, it recorded a gross profit margin of 93%. Few ASX stocks have gross margins above 90%. Within this gross margin, 4.9% corresponded to payment charges and 2.1% to insurance charges.

When a business has such a high gross profit margin, it means that a large portion of the new income can be directly allocated to the next profit line. This could be useful in pushing up the Airtasker share price if underlying earnings can rise.

Already positive cash flow

Many tech companies are listed on the ASX with operating cash outflows as they spend on growth until the scale allows them to break even.

However, Airtasker achieved positive operating cash flow of $ 5.5 million in fiscal 21, beating its prospectus forecast by $ 0.1 million.

Management said that with positive operating cash flow and a strong cash balance, it is well positioned to invest in international expansion.

Global growth potential

International growth could help the Airtasker share price to rise over time.

The company is already making progress abroad. In fiscal year 21, the UK market saw GMW growth of 232% year-on-year and 93% quarter-on-quarter.

In the United States, he said the integration of Zaarly and planning for American expansion is progressing well. It aims to start in the cities of Kansas City, Dallas and Miami.

He hopes to achieve an international annualized GMV execution rate of between $ 8 million and $ 10 million by June 2022.

Airtasker believes its total addressable market is several billion dollars in Australia, the United States and the United Kingdom for existing local service industries. She wants to develop new services such as flatbed furniture assembly and nightly appointment scheduling to complement existing services such as cleaning, photography and office administration.

In FY 22, he’s aiming for revenue of at least $ 35 million and GMV of at least $ 200 million.

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