The Aussie Broadband Ltd (ASX: ABB) share price is slipping this morning after the company posted whopping first half earnings growth.

Right now, stock in the All Ordinaries Index (ASX: XAO) telecommunications provider is down 1.54% at $2.89 after dropping even lower near the open.

Aussie Broadband share price falls as profit rockets

Here are the key takeaways from the telco provider's first half earnings:

• $8.6 million net profit after tax (NPAT) – a 516% jump on that of the prior comparable period (pcp)
• $379 million of revenue from ordinary activities – up 65% on that of the pcp
• $41.1 million of earnings before interest, tax, depreciation, and amortisation (EBITDA) – up 86%
• $30.8 million of operating cash flow – a 35% improvement
• Gross margin lifted 2.5% to 34.9%

Aussie Broadband saw its revenue surge last half as it grew its broadband subscribers and other revenue streams. It also recognised earnings from its recently acquired Over the Wire business.

What else happened last half?

The company saw plenty of growth across its key product lines last half.

Its broadband connections soared by 50,449 to 635,242 connections. Meanwhile, its mobile services grew by 10,669 to reach 50,951 and its average voice minutes increased by 13 million to 125.7 million.

Aussie Broadband's market share also rose to 7%, excluding satellite, in a declining nbn market.

Topping it off, the company implemented the combination of its business with Over the Wire. That brought $6 million of annualised synergies last half and is on track to bring about between $8 million and $12 million of annual synergies by 2025.

What did management say?

Aussie Broadband co-founder and managing director Phillip Britt commented on the release driving the company's share price today, saying:

We are pleased to report that Aussie Broadband has continued to deliver outstanding financial and operational performance, with strong growth in both revenue and customer numbers as we successfully execute our Aussie 2.0 strategy to diversify earnings through a broader product offering that brings scale to the business.

EBITDA grew faster than revenue reflecting the operating leverage from our fibre network and the positive shift to higher margin segments, while proactively managing our residential nbn growth strategy.

What's next?

Aussie Broadband upgraded its full year EBITDA guidance but cut that of its revenue following a strong start to 2023.

It now tips its full year revenue to come in at between $780 million and $800 million while its EBITDA is expected to be between $85 million and $90 million.

The company remains committed to becoming Australia's fourth largest communications and technology services provider by 2025.

Aussie Broadband share price snapshot

The Aussie Broadband share price has taken off in 2023, gaining 10% year to date.

However, looking further back, the stock has slumped 42% over the last 12 months.

For comparison, the All Ords has gained 5% year to date and 2% over the last 12 months.

The post Aussie Broadband share price slumps despite 500% profit surge appeared first on The Motley Fool Australia.

The S&P/ASX All Technology Index (ASX: XTX) has incredibly rocketed 14.8% upwards in less than five weeks this year.

But if you're looking to ride this wave, you still need to be selective about which ASX technology shares to buy.

With much economic gloom and more interest rate rises to come, investors still need to back businesses that have solid long-term prospects, rather than speculative cash burners.

With this in mind, the team at Elvest this week mentioned two tech shares in a memo to clients that are going places and are likely to reward investors for years to come:

'Materially benefit Aussie Broadband's margins'

The Aussie Broadband Ltd (ASX: ABB) share price has gained 15% so far this year, which the Elvest analysts attributed to NBN Co's newly proposed wholesale pricing plans.

"Under the proposal, subject to ACCC approval, NBN Co will reduce wholesale prices for ultra-high speed tiers, where Aussie Broadband specialises."

The Victorian company has risen to take an almost 7% share of the NBN market, admirably playing against far bigger telcos with much deeper pockets.

Aussie Broadband markets itself as a premium provider, admitting it's not the cheapest but boasting of an all-Australian call centre and superior broadband speeds.

NBN Co's new pricing scheme will be a huge boost to the business and its investors once it passes all the bureaucratic steps.

"The changes will materially benefit Aussie Broadband's margins, assuming rational industry pricing thereafter."

The Aussie Broadband share price has halved since April last year.

ASX company 'demonstrably adding value'

Digital lotteries retailer and software maker Jumbo Interactive Ltd (ASX: JIN) has also enjoyed a happy new year.

The stock price has risen 6% since the champagne popped on new year's day.

According to the Elvest team, the company signed a big client contract during January.

"Jumbo Interactive announced a six-year extension of its software licence agreement with leading charity operator Mater during the month," read the memo.

"This continues a highly successful partnership between the two groups, with Jumbo Interactive demonstrably adding value for one of Australia's most prominent healthcare focused charities."

Despite its software operations, Jumbo's involvement in the lotteries sector seems to have kept it somewhat shielded from the broader tech sell-off.

The stock has lost just 16.7% over the past 12 months.

Lotteries are seen to be a defensive business that provides reasonably consistent earnings through different parts of the economic cycle.

With Australia and the world expected to suffer from an economic slowdown, this defensive quality could once again come into play.

The post Tech's back! Fund names 2 ASX shares to ride the resurgence appeared first on The Motley Fool Australia.

It's been a pretty depressing day for the S&P/ASX 200 Index (ASX: XJO) so far this Thursday. At the time of writing, the ASX 200 has slipped by 0.5%, leaving the index at just under 7,220 points. But it's been even worse for the Telstra Group Ltd (ASX: TLS) share price today.

Telstra shares have had a disappointing showing. The ASX 200 telco has lost a hefty 0.61% of its value over this session thus far, falling from the $4.08 it closed at yesterday to the $4.06 we are currently seeing.

So why is the Telstra share price so on the nose today that the company's shares are lagging even the ASX 200 Index?

Well, it's not entirely clear. There has been no fresh news or announcement from Telstra itself today. Or indeed since 7 December.

However, there has been a development that could be impacting investor sentiment towards Telstra today.

The Australian Competition and Consumer Commission (ACCC) has just released its latest NBN Wholesale Market Indicators Report. This quarterly report reveals data surrounding the use of the national broadband network (NBN), which Telstra, along with other telcos, onsells to customers.

The latest report covers the three months to 30 September 2022. It shows that, while Telstra remains the market leader in the provision of fixed-line internet services, its market share has fallen.

Telstra falls

Over the quarter in question, Telstra commanded 42.7% of wholesale NBN market share. The next closest provider was TPG Telecom Ltd (ASX: TPG), with a 22.8% market share. Optus came next with 13.4%, followed by Vocus Group with 6.9%. 'Others' made up the remaining 14.2%.

So why is this bad news for Telstra? Well, in the previous report covering the three months to 30 June, Telstra had a 43.3% share, meaning its share of the total market fell 0.6% in just one quarter.

In fact, market share for the largest three providers (Telstra, TPG, and Optus) all fell over the quarter, taken up by smaller providers like Aussie Broadband Ltd (ASX: ABB). The 'big three' had a combined market share of 87.4% in the June quarter, but this fell to 85.8% for the September quarter.

Not exactly inspiring stuff for Telstra and its investors.

So this could be what is dragging on the Telstra share price this Thursday. It's a bit of a dampener for Telstra shares, which have enjoyed a very solid month, rising more than 4.5% since mid-November:

Telstra shares remain down by around 4% year to date. At the current Telstra share price of $4.06, the ASX 200 telco has a (wildly coincidental) trailing dividend yield of 4.06%.

The post Why is the Telstra share price lagging the ASX 200 today? appeared first on The Motley Fool Australia.

In afternoon trade, the broadband provider's shares are up 4% to $2.57.

Why is the Aussie Broadband share price charging higher?

Investors have been buying Aussie Broadband shares on Wednesday following the release of its investor day update.

That update saw management spruik its "huge opportunity to be even bigger than today" and reaffirm its guidance for FY 2023.

In respect to the latter, management continues to expect Aussie Broadband to deliver revenue of $800 million to $840 million. This will be an increase of 46% to 54% from $546.9 million in FY 2022.

The company also reaffirmed its earnings before interest, tax, depreciation and amortisation (EBITDA) margin guidance of 10% to 10.5% for FY 2023. This will be an improvement from 7.2% during the last financial year.

Based on the middle of both its revenue and margin guidance ranges, this implies EBITDA of $84 million for the year. This will be more than double the EBITDA of $39.4 million it recorded in FY 2022.

What about its growth opportunities?

Aussie Broadband highlighted a number of growth opportunities in its investor day presentation.

As well as traditional broadband services (which it is targeting the almost doubling to 1 million services by FY 2025), the company notes that it has the ability to leverage its existing infrastructure to provide more products to its business customers at higher margins.

This includes cloud services, mobility services for Internet of Things, virtual office phones, and 4G and 5G failovers.

In respect to the cloud, the company notes that the Australian cloud infrastructure as a service market is expected to growth from $1.7 billion in FY 2021 to $3.04 billion in FY 2025.

And while major public cloud providers (Amazon, Microsoft, Google, etc.) currently dominate the market, management notes that they can be expensive and are not the best solution in every scenario. This creates an opportunity for Aussie Broadband to win market share.

All in all, management appears confident in its growth trajectory over the coming years. And judging by the Aussie Broadband share price performance today, investors seem to share this confidence.

The post Aussie Broadband share price lifts as company spruiks 'huge opportunity' appeared first on The Motley Fool Australia.

1. The terminal cash rate for this economic cycle will likely be around 4%. That means the Reserve Bank of Australia (RBA) will be largely done raising interest rates by around the middle of next year.

2. Elements of the equity markets will recover from their recent lows. In the US, I'd be looking at large-cap tech stocks like Microsoft Corp (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), and Meta Platforms Inc (NASDAQ: META). Australia is a little trickier, given commodity stocks have been strong, bank stocks relatively stable, and some tech stocks, even after their shellacking this year, still look expensive.

3. Many stocks will never again reach their 2021 all-time highs. Many former market darlings and COVID-19 beneficiaries would have to 10x from here to get back to where they traded at their peak. It just isn't going to happen. I'm looking at you Zip Co Ltd (ASX: ZIP), Sezzle Inc (ASX: SZL), and Redbubble Ltd (ASX: RBL), and they've got plenty of mates.

4. That said, some fallen heroes will stage remarkable recoveries, rising 300% or more from these depressed levels. I own a few that have taken big tumbles for which I hold out hope of recovery, and in more recent times, I've taken bites in a few beaten-down ASX small and microcap stocks that are still growing quickly.

Recovery hopefuls: Pinnacle Investment Management Group Ltd (ASX: PNI), Aussie Broadband Ltd (ASX: ABB)

Newer bites: Field Solutions Holdings Ltd (ASX: FSG), Alloggio Group Ltd (ASX: ALO), Mighty Craft Ltd (ASX: MCL)

5. The economy will slow as interest rate rises start to bite. This will put pressure on corporate earnings, particularly in consumer discretionary retailers like Harvey Norman Holdings Limited (ASX: HVN), Kogan.com Ltd (ASX: KGN), and Temple & Webster Group Ltd (ASX: TPW). Profit warnings will likely outpace profit upgrades.

6. Even though some companies are likely going to experience falling profits in FY23, in some cases this has already been priced into their cheap stock prices. I'm certainly no energy and commodity stock expert, and I'm always very conscious of their cyclicality, but Woodside Energy Group Ltd (ASX: WDS) and BHP Group Ltd (ASX: BHP) trading on 8 to 10% trailing fully franked dividend yields and on trailing single digit multiples have significant future falls in the iron ore and oil price already reflected in their share prices.  

7. On a trailing basis, some retailers look dirt cheap. At $2, the Dusk Group Ltd (ASX: DSK) share price trades at seven-times profit and on a fully franked dividend yield of 10%. The specialty retailer of home fragrance products didn't provide FY23 guidance given "ongoing uncertainty surrounding the macro-environment". Dusk is capitalised at $125 million, has $21 million cash, and no debt. 

8. If you believe the economy will recover (it always has done so in the past) and corporate profits will be higher three to five years from now (as they have been in the past), and that will translate to a higher stock market in the future (as it has done so in the past), one of the simplest investing strategies and processes is to dollar-cost average into a low-cost exchange-traded fund (ETF).

My favoured option is the Vanguard MSCI Index International Shares ETF (ASX: VGS). Since its inception in 2014, it has returned 11.4% per annum, something that would have turned an initial $10,000 investment into almost $23,000. The ETF holds stakes in large US companies, including Apple, Microsoft, Amazon, Tesla, Johnson & Johnson, and Exxon Mobil. 

If you want to throw in a local flavour, consider adding the Vanguard Australian Shares Index ETF (ASX: VAS). You'll get exposure to the big miners, the big banks, and the big supermarkets.

9. Interest rates will start turning lower around the third quarter of next year as the economy slows in response to standard variable mortgage rates of around 7.5 to 8%. Consumer confidence has already taken a big hit, dropping to its lowest level since April 2020 amid higher interest rates and surging inflation. 

To the points above, discretionary spend – retail, food and beverage, even travel – is about to take a hit.

10. The forward-looking stock market has already priced much of what's coming into the prices of individual stocks. It knows not how far spending will fall, nor how much some corporate profits will shrink. 

Just as the stock market is falling now, despite an economy with near-record-low unemployment, the forward-looking stock market will go higher in the face of a sharply weaker economy. Bad news is good news for the stock market.

In the meantime, volatility is likely to persist. There could even be another bear market from here, where the S&P/ASX 200 Index (ASX: XJO) falls a further 20%.

For stock pickers, use it to your advantage to add to your favourite existing stocks, and to throw a couple of new positions into your portfolio. 

For ETF investors, continue making regular (fortnightly or monthly) contributions, come hell or high water. With annualised returns potentially around the 8% level, an investment made today would double in nine years. 

It reminds me of the Bill Gates quote…

"Most people overestimate what they can do in one year and underestimate what they can do in ten years."

The post These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market appeared first on The Motley Fool Australia.

The Aussie Broadband Ltd (ASX: ABB) share price has a lot of upside, according to one expert.

This business primarily provides broadband, voice over internet protocol (VOIP), and mobile services to residential customers. Its target is to be Australia's fourth-largest provider of communications and technology services.

Aussie Broadband has also acquired Over The Wire, which has a lot of capabilities across data, voice, cloud, and managed services. Over The Wire is focused on business, enterprise and government, and wholesale segments.

By combining these two businesses, it can be an integrated full-service provider across the "full suite" of solutions to residential, business, enterprise and government, and wholesale customers. It will also have full ownership of tier 1 voice and data networks in Australia, interconnection to all 121 NBN points of interconnection and a cloud infrastructure platform.

With all of the volatility that's going on, I think it's a good idea to look at how the company is actually performing, not just what the share price is doing.

FY23 first-quarter update

The ASX telco share announced that in the FY23 first quarter, it had reached 610,098 broadband services, up 4.3% from 30 June 2022.

In the quarter, it generated $184.4 million of revenue, which was an increase of 4.6% from the fourth quarter of FY22.

It said that Aussie Broadband's residential and business segment delivered consistent net additions despite strong price-based competition without the need for heavy promotion use, reducing its customer acquisition costs and long-term churn risk.

The mobile division grew "strongly" thanks to a new marketing strategy and change to plans. There were 4,953 net mobile additions during the quarter.

Wholesale and white-label additions were lower because of white-label customer internal platform change., Management is expecting white-label additions to improve in the second quarter of FY23.

In terms of its NBN market share, it had reached 6.73% at September 2022, up 27 basis points from 30 June 2022. Since December, Aussie Broadband has reportedly taken more net additions than the rest of the industry combined.

Guidance for FY23

Aussie Broadband noted that based on current market conditions, the operating plan, and year-to-date trading, it's expecting revenue of between $800 million and $840 million.

It's planning growth in higher margin business, enterprise and government customers, and the full-year benefit of Over The Wire. This should deliver an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin, excluding integration costs, of between 10% and 10.5%, up from 7.2% in FY22.

Aussie Broadband share price target

One of the brokers that likes the ASX telco share is Ord Minnett, with a price target of $3.61. That implies a possible rise of more than 40% from Thursday's closing price of $2.52.

The broker likes the expected increasing profitability of the business and thinks Over The Wire can help it become bigger.

Based on the estimated earnings for FY24, Ord Minnett thinks the business is priced at 13x FY24's projected profit.

The post The Aussie Broadband share price offers 40% upside: expert appeared first on The Motley Fool Australia.

Many investors will not need reminding that 2022 has been a distressing time to own technology shares.

Most have fallen so much that they will need to become multibaggers in the next market recovery for them to return to the dizzying heights of 2021 and 2020.

The trouble is, how can you tell which ones have a genuine chance of such a resurgence and which stocks are just duds?

One clue could be to see if the people who run the business are buying the shares.

Insiders like directors and executives could be selling their shares for many different reasons — buy a new house, pay for a new car, repay loans, pay the kids' private school fees. But the theory is that there can only be one reason why they would buy. 

It's that they think the share price will head up.

After all, why would these presumably smart people, who have access to the inside machinations of the business, risk their own money unless they thought it was headed for a bright future?

What's doing with Aussie Broadband shares?

One investor asked Shaw and Partners portfolio manager James Gerrish what he thought about buying Aussie Broadband Ltd (ASX: ABB) shares.

The internet provider has helplessly watched its stock price plunge 60% since Easter. Is it in terminal decline or does it have prospects of a recovery?

"It has indeed been a tough period for Aussie Broadband, with a number of earnings downgrades sending the stock down," Gerrish told a Market Matters Q&A.

But Gerrish has noticed a positive signal from its ASX disclosures.

"Following last month's result and subsequent share price decline, it is worth highlighting that all of Aussie Broadband's directors have bought stock in the market since — clearly a very good sign."

Managing director Phillips Britt, chair Adrian Fitzpatrick, board members Michael Omeros and Richard Dammery have all bought more Aussie Broadband shares over the past few weeks. 

No executives or directors have sold since early March.

Gerrish's team is bullish after the market update last week.

"On Friday they reconfirmed FY23 guidance and from speaking to management post their FY22 result, the guidance we believe could well be on the conservative side," he said.

"Our Emerging Companies Portfolio already holds a large 8% exposure to Aussie Broadband hence we are not likely to increase this exposure, but we do still like the stock at current levels and would in all likelihood buy if we had no position."

The post Buy this ASX share that all its directors have been snapping up: expert appeared first on The Motley Fool Australia.

Believe it or not, tonight is federal budget night. If you're a little confused, I wouldn't blame you. Yes, we've already had a budget this year, the one delivered back in March.

But that was a different government, with a different Treasurer. Normally, the economics enthusiasts among us get one budget a year to salivate over. But due to the change of government and the new Treasurer's wishes, this year we are getting two for the price of one.

New Treasurer Jim Chalmers is now scheduled to deliver this new budget (some are calling it a mini-budget) at 7.30 pm tonight.

Now, of course, we won't know everything that's in this new budget until it gets released, as is the norm with these things. But we can speculate as to what it might mean for the economy, and of course, ASX shares.

An analysis of the upcoming budget from Bloomberg predicts the key areas to watch are infrastructure, resources, housing, childcare and telecommunications.

Which ASX 200 shares are ones to watch after the budget?

The report points out that the government could be set to pledge $96 billion for road and rail investment. No doubt this will go towards some road and rail upgrades and perhaps even new links altogether. But it also warns that some of this cash may come from scrapping other previous government promises, such as commuter car parks.

Some ASX shares to watch in this space are construction and building companies. Those include Adbri Ltd (ASX: ABC), Boral Limited (ASX: BLD), and Lendlease Group (ASX: LLC). Another one to watch might be toll road operator Transurban Group (ASX: TCL).

The report also predicts that the recent government interest in funding critical mineral supply chains will continue. This could see more grants to ASX 200 shares in the lithium, rare earths and battery metals space. So keep your eye on shares like Pilbara Minerals Ltd (ASX: PLS) and Lynas Rare Earths Ltd (ASX: LYC).

Housing, childcare and telecommunications

Housing continues to be a potent political issue as well. So Bloomberg argues that we could see some further developments addressing these issues in tonight's budget. We already know the government has a new 'first home guarantee' scheme that it took to the election.

The government has also indicated that it wants to see super funds invest in affordable housing. So it will be interesting to see how property-linked ASX 200 shares like REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) fare following this budget.

The government has also already announced an increase in paid parental leave from 18 weeks to 26 weeks from 2024. We could see more announcements in this arena tonight. So more ASX 200 shares to keep an eye on include those in childcare. Think G8 Education Ltd (ASX: GEM) and the like.

Finally, Bloomberg reports that the government is looking at investing another $2.4 billion into the national broadband network (nbn) to expand full-fibre access to another 1.5 million premises by 2025. That could have direct implications for the ASX 200's telco shares. Those include Telstra Corporation Ltd (ASX: TLS), Aussie Broadband Ltd (ASX: ABB), and TPG Telecom Ltd (ASX: TPG).

The post Which ASX 200 shares could benefit from the federal budget? appeared first on The Motley Fool Australia.

Perhaps it was inevitable that some retailers weren't going to keep posting record profits. And maybe demand for buying cars will reduce.

But, while share prices are hard to predict, is it possible to find businesses that could see their profits barely affected by a recession – perhaps even grow?

I think there are a few places we can look to.

Food

We all need to eat. I believe that businesses that sell food to consumers could continue to see decent results. Certainly, I think the demand will still be there.

In my opinion, food is one of those areas where people will keep spending, even if they have to change to cheaper alternatives. Supermarkets are an obvious suggestion here, such as Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

But, I also think that KFC and Taco Bell operator Collins Foods Ltd (ASX: CKF) could be another defensive idea.

Farmland real estate investment trust (REIT) Rural Funds Group (ASX: RFF) could be another defensive All Ords ASX share idea, thanks to its long-term rental contracts and the ongoing tenancy by leading farming businesses.

Energy

There doesn't seem to be an end in sight to the Ukraine conflict and energy prices remain high. The world needs energy, even if demand were to drop a little. I think that Woodside Energy Group Ltd (ASX: WDS) could keep generating good earnings, particularly with the All Ord ASX share's LNG division as Europe looks for alternative sources of energy away from Russia.

APA Group (ASX: APA), the owner of various energy assets including a large gas pipeline network, could also keep generating good cash flow as it transports half of Australia's natural gas.

Telecommunications

People's phones and home internet are very important bills to pay. Indeed, my work depends on it. Communication is vitally important. And so on. Nearly every business needs the internet for some reason.

I think Telstra Corporation Ltd (ASX: TLS), TPG Telecom Ltd (ASX: TPG), and Aussie Broadband Ltd (ASX: ABB) all could offer defensive earnings, particularly with the NBN transition now over.

Telstra is expecting to grow its earnings per share (EPS) over the next few years.

Healthcare

People don't choose when to get sick, but I do think people (and the government) would keep paying to access healthcare services. All Ords ASX share names like CSL Limited (ASX: CSL) and Sonic Healthcare Ltd (ASX: SHL) (excluding COVID-19 testing) are two names that I think won't see much change in demand.

Gambling

There is research that shows that "when people are experiencing financial difficulties during economic recessions, the possibility to improve their financial situation by winning large jackpots with low initial stakes becomes more enticing".

The Lottery Corporation Ltd (ASX: TLC) is the business that operates Australia's lotteries through The Lott.

Funerals

There are only two things certain in life – death and taxes, as the saying goes.

While it's a bit morbid to think about owning All Ords ASX shares that are funeral operators, they could provide defensive earnings. Demand is based on deaths rather than economic factors.

Within this sector are names like InvoCare Limited (ASX: IVC) and Propel Funeral Partners Ltd (ASX: PFP).

Auto parts

Finally, Bapcor Ltd (ASX: BAP) is an interesting one in my opinion. It's the biggest auto parts business in Australia and New Zealand with a number of brands like Burson and Autobarn.

I think that people are more likely to delay a new car purchase in leaner times. This means trying to make their current car last longer, which could mean buying replacement parts when needed. This, in turn, could be good for Bapcor's earnings.

The post Which ASX All Ords shares could perform well in a recession? appeared first on The Motley Fool Australia.

Readers may know Aussie Broadband as a growing telecommunications business that aims to offer better customer service.

While it has built up its market share of NBN household customers, there are other areas that the company is focusing on. It offers solutions for business, enterprise and government customers. It also provides wholesale access to other telcos and managed service providers.

The ASX telco share provides broadband services nationally through a wholesale agreement with NBN Co, its own fibre network, and some leased backhaul infrastructure from third parties.

Aussie Broadband claims to be the fifth largest provider of broadband services in Australia and is one of only six tier 1 voice providers in Australia.

Why this expert likes the Aussie Broadband share price

Ben Rundle from Hayborough Investment Partners rated the telco a buy on Livewire's 'buy hold sell' segment.

Starting off his case for the company, Rundle said:

I feel like I'm sticking my neck out a little bit with this company because it's trading like it's faced a monster downgrade.

Rundle said he liked businesses with higher customer satisfaction levels, which he thinks Aussie Broadband has achieved in its residential broadband division. It has built a "huge amount of market share".

In its FY22 results, the ASX telco share revealed that its residential broadband connections had increased by another 28% to 464,979. It also revealed that revenue went up 57% to $546.9 million and it achieved $39.4 million of earnings before interest, tax, depreciation and amortisation (EBITDA) – up 107%.

Rundle also noted that the business was in a transition phase and "nobody's really seeing the fruits of that yet".

On the Aussie Broadband share price — down around 60% over the past six months — Rundle said:

It's quite cheap for what I think it is. It's a founder-led business that has a fantastic management team. So, I think that it's offering a pretty good opportunity to buy it here.

In FY23 the company expects the underlying EBTIDA margin to grow to between 10% to 10.5%, up from 7.2% in FY22.

Snapshot

The Aussie Broadband share price is up 7.8% trading at $2.21 at the time of writing. Shares in the telco have lifted 13% since the close of trade on Wednesday, 12 October.

The post Aussie Broadband share price is 'quite cheap for what it is': expert appeared first on The Motley Fool Australia.

In the stock-tipping realm, investors come across many varied opinions about which ASX shares to buy.

No one has a crystal ball, so even the experts have different investment styles and attributes they look for in a company. 

Diversity of opinion is healthy, but it can make it confusing for the average punter.

So when two different funds name the two same stocks for praise, you'll want to check for a blue moon or buy a lottery ticket.

But that's exactly what's happened this week.

A star performer in August to keep for the long term

The team at QVG Capital is loving their investment in PSC Insurance Group Ltd (ASX: PSI) right now.

They were especially pleased seeing the share price rise 18% during August, as its results were delivered.

"PSC Insurance just keeps delivering," QVG analysts said in a memo to clients.

"The company produced the trifecta: an earnings beat, great cash flow and an upgrade to FY23 consensus earnings expectations."

The team noted that PSC's business of insurance-broking is "a competitively advantaged industry" and similar companies around the world are currently rewarding shareholders handsomely. 

"What we like most about PSC, however, is their management team who permeate a culture that is just as hungry for organic as inorganic growth."

Celeste Funds Management analysts, in their memo to clients, also noted the company's financials "exceeded both market expectations and previous company guidance".

That team also loves where management is taking ASX share PSC.

"Management provided some further clarity on their medium-term target which includes growing EBITDA to $130 million to $140 million by FY25," read the memo.

"Pleasingly the company is fully funded to achieve this goal and as such remains an attractive investment capable of generating growing, defensive and long-term cash flows."

PSC shares are up 4.24% year to date.

A pauper in August to keep for the long term

On the other side of the coin is ASX telco share Aussie Broadband Ltd (ASX: ABB), which painfully lost almost a quarter of its value over August.

But both Celeste and QVG Capital are still bullish on the internet services provider.

"Aussie Broadband delivered earnings ahead of guidance and grew retail broadband market share by nearly 2%," read the Celeste memo.

"Aussie Broadband now makes up 6.46% of the NBN market and was the fastest growing NBN service provider this quarter."

QVG Capital did note that the company downgraded its 2023 guidance due to "wage inflation and National Broadband Network cost pressures".

Both camps agreed that Aussie Broadband's residential business has plateaued, but it has other fires burning for future growth.

"Reselling the NBN isn't a great business, but we see potential in Aussie as they grow their corporate and enterprise division and get a return on the capital they've sunk in their fibre network," read the QVG memo.

The Celeste team praised Aussie Broadband's acquisition of IT services provider Over The Wire, saying the company could now provide "a one-stop-shop for business customers".

"With the residential market now largely penetrated, the key to growth is capturing margin-rich business customers."

Aussie Broadband shares have almost halved since the start of the year.

The post 'Hungry for growth': Multiple funds name same 2 ASX shares that look good to buy now appeared first on The Motley Fool Australia.

ASX-listed technology company Aussie Broadband Ltd (ASX: ABB) has been fined $213,120 for "large-scale breaches" of rules that protect Australians.

An investigation by the Australian Communications and Media Authority found that the internet service provider failed to provide customer data to the Integrated Public Number Database (IPND) more than 30,000 times between last November and May this year. 

The infringement endangered Aussie Broadband's own customers' lives as the IPND is used by the Triple Zero service to locate people in emergency situations.

The database is also used by the Emergency Alert Service to communicate to residents in areas affected by natural disasters.

'Alarming' failure in software

ACMA chair Nerida O'Loughlin said Aussie Broadband's failure was "unacceptable".

"While we are not aware anyone was harmed due to the breaches, it is alarming that Aussie Broadband did not have effective processes in place to identify that its customer information was not being provided for over six months."

The industry watchdog has directed Aussie Broadband to continue to comply with the IPND rules or risk court action that could result in penalties of $250,000 per breach.

"While the breaches should not have occurred, we are pleased to see Aussie Broadband moved quickly to upload the missing data once it was brought to its attention and has taken steps to comply in future," said O'Loughlin.

Aussie Broadband boss apologises

Aussie Broadband managing director Phillip Britt apologised for the error and accepted the penalty.

"Whilst we had several checks and balances in place, these did not go far enough and I'm confident that our new compliance checks will ensure this never happens again," he said.

"We are deeply sorry that this software failure went undetected leading to inaccurate records in the IPND database."

Aussie Broadband stated that it has now "implemented further redundancy measures, error notifications, independent monitoring and regular audits" to comply with the IPND rules.

According to the ACMA, it is on an "ongoing campaign" to improve the quality of the data in the IPND to better protect the public.

The watchdog has taken action against 30 telecommunications companies since 2018 for breaching IPND rules, resulting in almost $4 million fines.

The post ASX 300 telco fined $213,000 for endangering customer lives appeared first on The Motley Fool Australia.

The Aussie Broadband Ltd (ASX: ABB) share price could soon chart into greener territory due to its CEO Phillip Britt purchasing a substantial number of shares, according to Shaw & Partners senior investment advisor James Nicolaou.

Britt plucked 184,000 ordinary shares from the market on Tuesday, amid Nicolaou observing that the sell-off in Aussie Broadband shares was "overdone," as reported by The Australian.

Nicolaou believes Aussie Broadband's forecast for the next financial year underpromises its potential.

Nicolaou stated:

The takeaway being that operating leverage, changes in ARPU and other differences could see more bullish upside, we viewed FY23 guidance as a conservative start and still encompassing solid growth.

Aussie Broadband's revenue guidance for FY23 is between $800 million and $840 million, while its earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin will be 10% to 10.5%.

Aussie Broadband's share price plummeted 18% after it published its financial results for FY22 on Monday. My Foolish colleague Tony observed that this was despite the company posting "record revenue and earnings."

The Aussie Broadband share price is down 16% so far this week.

Aussie Broadband share price snapshot

The Aussie Broadband share price is down 45% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down much less over the same period by 10%.

Shares of the telco are down 2.6% shortly after the market open this morning to $2.59.

The company's market capitalisation is $632.18 million.

The post Is the Aussie Broadband share price a bargain? Here's what the founder's latest ASX transaction says appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are sinking:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is down 13% to $2.71. Investors have been selling this broadband provider's shares after the release of its full year results. That's despite the company reporting a 56% increase in revenue to a record $546.9 million and more than doubling its EBITDA to a record of $39.4 million. The market appears to have been expecting even stronger results.

Grange Resources Limited (ASX: GRR)

The Grange share price is down 28% to 98 cents. This morning the iron ore pellet miner released its half year results and revealed a sharp drop in sales and earnings. Grange reported a half year profit of $132.2 million, down almost 36% from $205.3 million a year earlier.

NextDC Ltd (ASX: NXT)

The NextDC share price is down over 6% to $10.26. Investors have been selling NextDC's shares after a selloff on Wall Street on Friday night offset the release of a strong full year result. This morning, the data centre operator reported an 18% increase in revenue to $291 million and 26% lift in underlying EBITDA to $169 million. The latter was ahead of its guidance range of $163 million to $167 million.

Polynovo Ltd (ASX: PNV)

The Polynovo share price has continued its slide and is down a further 18% to $1.34. Investors have been selling down this medical device company's shares after its full year results disappointed last week. The market selloff today certainly hasn't helped matters, particularly given the lofty multiples its shares trade on.

The post Why Aussie Broadband, Grange, NextDC, and PolyNovo shares are being hammered appeared first on The Motley Fool Australia.

The Aussie Broadband Ltd (ASX: ABB) share price has plunged in early trade after the company released its 2022 financial year results on Monday morning.

No doubt caught up in the general sell-off of growth shares after United States Federal Reserve chair Jerome Powell's comments over the weekend, at the time of writing Aussie Broadband shares are down 18.47% to $2.56.

What did the company report?

• Record revenue, up 56% to $546.9 million
• Record earnings before interest, taxation, depreciation and amortisation (EBITDA), up 107% to $39.4 million
• Net profit after tax (NPAT) up 118% to $5.3 million
• Total broadband connections up 46% to 584,793
• NBN broadband market share (excluding satellite) up from 4.74% to 6.46%

What else happened in FY22?

The big event for Aussie Broadband was its acquisition of IT solutions provider Over the Wire Holdings Ltd, which was also formerly listed on the ASX. That $344 million deal wrapped up in March.

Aussie Broadband also continued building out its own dark fibre network, which gives it independence from the larger wholesale telcos. That project is 90% complete, according to Monday's financial report.

What did management say?

Aussie Broadband co-founder and managing director Phillip Britt said:

I am extremely proud of the work the whole team has put in to deliver these outstanding results. We have achieved strong growth in revenue, earnings and market share, and are well positioned to achieve our goal of becoming Australia's fourth largest communications company providing a full suite of solutions across enterprise, wholesale, residential, and government sectors.

Aussie has come a long way from our early days as a residential internet service provider. Today we are growing a complete communications and technology solution across multiple market sectors. This enables us to develop closer relationships with a broader range of customers while also driving increased profit margins. 

What's next?

Aussie Broadband has forecast 2023 financial year revenue to fall between $800 and $840 million. 

After growth in enterprise and government clientele plus full integration of Over The Wire, the EBITDA margin will be around 10% to 10.5%, which is up from 7.2% for the 2022 financial year.

Aussie Broadband share price snapshot

Like most technology shares, the journey for the Aussie Broadband share price has been on a stomach-churning ride this year.

The stock has more than halved since mid-April, and is down 46% since the start of 2022.

The post Aussie Broadband share price plummets 18% despite record revenue, earnings appeared first on The Motley Fool Australia.

Three ASX shares brokers have named as buys this week are listed below. Here's why they are bullish on them:

Aussie Broadband Ltd (ASX: ABB)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and $4.80 price target on this broadband provider's shares. While the broker appears slightly disappointed with a slowdown in residential connections, it believes this has been driven partly by one-off impacts. However, it was pleased with the integration of the OTW business. It feels this business will be key to diversifying Aussie Broadband's earnings in the coming years thanks to its exposure to the enterprise market. The Aussie Broadband share price is trading at $3.15 on Wednesday.

BHP Group Ltd (ASX: BHP)

A note out of Citi reveals that its analysts have retained their buy rating and $44.50 price target on this mining giant's shares. Citi is expecting iron ore prices to strengthen later this year as steel production rates in China are supported by policy easing. It also sees constrained iron ore supply as a positive for prices. The broker is expecting this to underpin a fully franked dividend yield of approximately 10% in FY 2023. The BHP share price fetching $35.58 this afternoon.

Qualitas Ltd (ASX: QAL)

Analysts at Goldman Sachs have retained their buy rating and lifted their price target on this real estate investment company's shares to $3.20. This follows news that the company has received a major mandate from the Abu Dhabi Investment Authority. Goldman believes the mandate is a validation of the company's leading product breadth and track record in Australian CRE private credit strategies. Outside this, the broker sees Qualitas as a way to gain attractive exposure to an emerging asset class. The Qualitas share price is trading at $2.32 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is down over 17% to $3.00. This is despite the broadband provider advising that it expects to deliver on the top end of its EBITDA guidance range of $38 million to $39 million in FY 2022. Management also revealed higher than expected synergies from its Over the Wire acquisition. Investors appear to have been expecting even better.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has sunk 12% to $4.67. Investors have been selling off the online furniture seller's shares despite there being no news out of it. However, it is worth noting that a number of tech shares have come under pressure today.

United Malt Group Ltd (ASX: UMG)

The United Malt share price has crashed 16% to $3.08. This commercial maltster's shares have come under pressure today after it downgraded its earnings guidance. United Malt now expects to report underlying EBITDA of $100 million to $108 million before software-as-a-service costs. This represents a 22% drop on the top end of its previous guidance. Management blamed the North American barley crop, supply chain issues, and high energy costs.

Zip Co Ltd (ASX: ZIP)

The Zip share price is down 6% to $1.07. This morning the team at Citi downgraded this buy now pay later provider's shares to a sell rating and slashed the price target on them to 70 cents. Citi isn't particularly optimistic on the company's outlook and suspects that its cash burn will continue due to cost inflation and slower growth.

The post Why Aussie Broadband, Temple & Webster, United Malt, and Zip shares are dropping appeared first on The Motley Fool Australia.

Aussie Broadband shares closed on Friday trading at $3.63 each and are currently trading for $3.10 apiece.

This comes following the release of the ASX telco's quarterly results for the three months ending 30 June (Q4 FY22).

While posting some solid gains in its broadband service figures, the numbers aren't helping lift the Aussie Broadband share price today. Here are the highlights:

What happened during Q4 FY22?

• Total broadband services increased by 7% during Q4 to 584,793
• Across the full 2022 financial year, total broadband services increased 46%
• Aussie Broadband expects FY22 earnings before interest, taxes, depreciation and amortisation (EBITDA) to come in at the high end of its guidance range of $38 million to $39 million
• In Q4, the telco was named 'the most trusted telco brand in Australia' by Roy Morgan

What else happened during the quarter?

Broadband services experienced a notable uptick across the sectors, with residential broadband services increasing 28% to 464,979 while business broadband services increased 68% to reach 59,488. That includes services provided by Over the Wire which Aussie Broadband acquired earlier this year.

The company also reported a "significant" boost in its wholesale and white label broadband services, which hit 60,326.

Excluding satellite, Aussie Broadband also increased its share of NBN services to 6.46% from 4.74% in 4Q FY21.

What did management say?

Commenting on the results, Aussie Broadband cofounder Phillip Britt said:

We are pleased with this result given the third quarter challenges we faced, and have been very focused on addressing over the past three months.

The acquisition of Over the Wire has bolstered Aussie Broadband's business segment product and skills capability. It added 16,000 business, enterprise, government and wholesale customers. The integration is progressing as planned and we have already started generating revenue synergies from the combination of the two businesses, including two large regional health alliance and shire council deals recently signed.

Synergies relating to the migration of Aussie voice traffic onto the Over the Wire tier 1 voice network have yielded $2.9 million in annualised savings, higher than our original investment case. A further annualised $2.3 million in other run rate synergies have been achieved, taking the total cost synergies achieved to date to $5.2 million annualised.

The Aussie Broadband share price fell hard in early trade, despite Britt reporting that the company's investment case of $8 million to $12 million of annualised cost synergies remains on track.

What's next?

The company reported that its Aussie Fibre Project is now 90% complete and remains on budget. This is forecast to generate $13.5 million of year-on-year savings. The project was facing delays from adverse weather and is now scheduled to be finished in the current quarter (1Q FY23).

Aussie Broadband reports its full year results on 29 August.

Aussie Broadband share price snapshot

With the intraday losses factored in, the Aussie Broadband share price is down 34% since the opening bell on 4 January. That compares to a year-to-date loss of 9% posted by the All Ordinaries Index (ASX: XAO).

The post Aussie Broadband share price plunges 15% as quarterly results fail to impress appeared first on The Motley Fool Australia.

The Aussie Broadband Ltd (ASX: ABB) has lifted in afternoon trade on Monday. At the time of writing, the share trades 3% higher at $3.10 apiece on no news.

As the growth/tech trade has unwound itself in 2022, investors have shifted priority onto fundamentals.

With that said, let's take a look at Aussie Broadband's financial position, and how this could be related to its share price.

Aussie Broadband balance sheet analysis

Turning to the company's balance sheet, we see it has a total asset base of $297 million as of H1 FY22. On this base, it has long-term liabilities of $29 million.

It also held more than $168 million in cash at H1 FY22, up from $57 million in the prior corresponding period (pcp).

Moreover, its debt ratio is just 10.5%, whereas debt as a percentage of Aussie's total capital is only 13% – suggesting the company is lowly leveraged.

It also covers its interest payment of more than 4 times from operating income, whilst generating $2.20 for every dollar invested into its asset base.

These seem to be supportive numbers for the Aussie Broadband share price.

Furthermore, the company looks as if it will meet its short-term obligations when they fall due. Short-term liabilities are covered more than 3 times from liquid assets, up from 1.5 times in the pcp.

As a result of its performance last half, it generated a 3.8% return on its assets and a 6% return on shareholder equity for the 6 months to December 2021.

Net-net, investors have $190 million in shareholder equity at the time of Aussie Broadband's last earnings report.

From this rudimentary analysis, it appears as if the company is reasonably well capitalised and will continue to meet its financial obligations as they fall due.

In the last 12 months, the Aussie Broadband share price has clipped an 11% gain.

The post Own Aussie Broadband shares? Here's the state of the company's balance sheet appeared first on The Motley Fool Australia.

The Aussie Broadband Ltd (ASX: ABB) share price had a difficult month in June.

To finish the month, shares in the telco fell more than 20% into the red, bringing losses to over 30% for the year to date.

In broad market moves, the S&P/ASX 200 Communication Services Index (ASX: XTJ) also slipped 3.5% into the red last month and is down 16% since January.

What's up with the Aussie Broadband share price?

Despite no news from the company in June, investors sold off Aussie Broadband shares at pace last month in tandem with the broad sector and the wider market.

The last we heard from the telco was back in May regarding its Q3 FY22 update. It reported a 42% year on year increase in total active broadband services to 697,083.

These figures weren't inclusive of Aussie Broadband's acquisition of fellow telco provider Over The Wire on 15 March 2022.

Folding in the acquisition and the company expects "annual cost synergies of between $8–$12 million within 3 years".

Over The Wire is expected to deliver approximately $11 million in EBITDA "for the 3.5 months that ABB has owned OTW" in FY22.

Market punishment

Investors weren't satisfied with the announcement at all and sent the share tumbling.

Just a week earlier investors had piled into Aussie Broadband shares at pace, driving prices to a 52-week high of $5.95 on 21 April.

However, shares plunged more than 28% on the day of the trading update announcement.

The market underwent a serious correction in June and ASX telecommunications shares weren't immune to downside.

The broader communications sector was hit equally as hard and the XTJ fell to a 52-week low on 17 June.

As seen on the chart below, the Aussie Broadband share price followed suit soon after. It is now down 29% this year to date but has clipped a 13% gain in the last 12 months.

The post Why did the Aussie Broadband share price fall 20% in June? appeared first on The Motley Fool Australia.