Shares in Pushpay Holdings (ASX: PPH) were up 4.64% at the close today following a market update this morning that confirmed the donor management technology company is on track to achieve its downgraded earnings guidance for the full year.
Two weeks out from the end of its (Kiwi) financial year, Pushpay advised the market the company expects to deliver underlying operating earnings (EBITDAFI) of between US$61.5m and US$63.5m in FY22.
This compares to its downgraded guidance range of US$60m to US$65m and its initial guidance of US$64m and US$69m.
Today’s guidance represents an increase in underlying operating earnings performance of between 6% - 10% when compared to the prior financial year ended March 31, 2021.
Excluding costs associated with the investment into the Catholic initiative, the company’s operating earnings would be between US$63.5m and US$65.5m.
To the uninitiated, Pushpay provides a donor church management system, including donor tools, finance tools and a custom community app, to the faith sector, non-profit organisations and education providers in the US, Canada, Australia and New Zealand with 10,896 customers.
With a market cap of $1.lbn, Pushpay sits just inside the ASX300.
The company has witnessed positive year-on-year increases in processing volume performance in each trading month of the 2022 financial year. Total processing volume for the 11 months ended February 28, 2022, were up 10% compared to the same period last year.
Pushpay’s net debt balance has reduced from US$90.0m at August 2021, to US$54.0m at 28 February 2022.
The company also advised of plans to buy back the remaining 138,336 Pushpay shares currently held by Pushpay Trustee Limited as trustee for a legacy employee share scheme.
The consensus from the three brokers covering the stock (as Reported on by FN Arena) is Hold.
Ord Minnett, which is the only one of the three [brokers] to quote a price target in A$, has a 12-month price a $1.90. While this represents an 88% upside to the current share price, it’s worth noting that the broker’s last update was 24/08/21.
While a slowdown in processing volumes at the interim suggests to Macquarie that donations are still normalising, the broker concludes that subsidiary Resi Media’s customer growth is slowing faster than expected.
Pushpay: A six month share price snapshot.
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