Another week of ASX reporting season is in the books after what can only be described as a frenetic week.
Buy-now-pay-later (BNPL) again divided opinion, three ASX favourites disappointed and the national carrier provided some much needed optimism.
Here’s your 5-minute update on the notable earnings reports from ASX reporting season.
Afterpay – something for the bulls and the bears
The fact that the Afterpay Ltd (ASX: APT) share price was unmoved post its FY21 result, is symbolic of the two prevalent but equally polarising market views of the business.
The bulls would say this is a company scaling rapidly, with 90% sales growth in addition to increased merchants and active customers who love the product.
Conversely, bears would argue sales are only up because of a 239% jump in marketing, bad debts are ballooning and competition remains rampant.
Whichever side of the ledger you fall on, BNPL looks like it’s here to stay.
Kogan surprises.. again
No stranger to volatile results and subsequent share price movements, Kogan.com Ltd (ASX: KGN) shares finished the week down 17%.
Despite gross sales soaring 52.7%, Kogan’s FY21 result disappointed the market with cash net profit plunging 87% due to logistics and inventory blunders.
In what has been a bumper year for e-commerce, old mate Ruslan really fumbled the bag.
WiseTech WOW’s the market
Low liquidity, a short register betting against the stock and FY21 result that far surpassed expectations created the perfect storm for the WiseTech Global Ltd (ASX: WTC) share price to rocket 46%.
This forced the ASX to place shares in a trading halt and issue a please explain notice to the company.
A pessimist might say management should have updated previous guidance to blow critics out of the water, but wanted to surprise the market.
I say bravo!
What happened at Appen?
Once ASX tech darling Appen Ltd (ASX: APX) produced an underwhelming half-year result with shares sinking 27% for the week.
Sales dropped 2%, EBITDA down 14.3% and full-year guidance was downgraded.
Management noted its global technology customers continue to reallocate resources to new projects, which should benefit Appen in future periods.
However, the market has been hearing this explanation for nearly a year now with projects yet to flow through to sales growth.
A2 Milk sours, literally
Talking of ASX darlings, the A2 Milk Company Ltd (ASX: A2M) share price has ended the week down 14% after another poor financial update.
Revenue dropped 30% as closed borders wreaked havoc on supply channels. Excess inventory resulted in a $109 million stock write-off. Consequently, EBITDA sunk 77%.
Senior management reshuffles, patent court cases and changing customer preferences in China only exacerbated A2’s issues.
With the China growth story looking all but over, A2 Milk finds itself between a rock and a hard place
Light at the end of the tunnel
The Qantas Airways Limited (ASX: QAN) FY21 result was always going to be ugly given lockdowns in Melbourne and Sydney in addition to closed international borders.
However, CEO Alan Joyce gave all Australians a glimmer of hope when he announced Qantas’s ambition to resume international travel from December.
The company predicts 80% of Australians will be vaccinated by this date, leading to the removal of border and quarantine restrictions.
Whether this can be achieved by December is unknown.
But what can be said is that the end is finally in sight.
Final thoughts
Most of the big results are out with a few laggards to report by close of business Tuesday.
There’s been a lot of surprises – some good, some bad.
As investors, it’s now the time to read over annual reports and update our valuations to see where we can find value in the market.
If you’re looking to learn how to do your own ASX company valuations, take our free share valuation course, which takes you through 6 common share valuation techniques, step by step.
Or try our Beginner Shares Course if you’re just starting out. Both are free.
