Buddy’s November update nudges the microcap higher

Four months after receiving its last share price kicker, following news the tech stock had closed its entitlement offer and restructured its debt facility, Buddy Technologies (ASX:BUD) has again captured the market’s attention, with the share price up around 18% an hour out from the close.

Within today’s announcement, the Adelaide-based top-of-the-tech and cloud-based solutions provider revealed monthly revenues for November were $3.0m, while monthly cash receipts were $3.2m.

Earnings & cash flow positive

While November was both earnings positive and net cash flow positive, gross margins, financial year year-to-date as of 30 November 2021, were 47.0%.

Comprising two core businesses, Commercial Business and Consumer Business, Buddy Technologies helps customers of any size “make every space smarter”.

Management has worked hard to pay down debt, and last September noted that the debt refinancing, and funds raised by the issue of the convertible notes, would decrease Buddy’s unaudited current liabilities at FY20 by $9.4m to $22.4m.

There is no consensus rating on this stock.

Based on Morningstar’s fair value of $0.02, the stock appears undervalued.

Given today’s share price movement, it’s noteworthy that the top twenty 20 shareholders only hold 38.75% of the shares on issue.