Small-Cap Success: Why Has Plexure Soared by Over 6% Today?

 

Plexure Group Limited [NZX:PLX] has benefited from a bullish market today, and its share price has surged by over 6%.

This follows a two-week winning streak for the company, raising its share value by over 46% since 4 May 2020.

Plexure is a mobile-engagement software company. It provides a marketing platform for brands looking to carry out personalised campaigns to cement customer loyalty.

Plexure’s share price is currently $0.99, and its market capitalisation is $138 million.

 

Why has the [NZX:PLX] share price risen?

 

Plexure is currently enjoying a rising wave of optimistic sentiment. This is buoyed by announcements that indicate a positive direction for their business:

  • Financial performance is up 50% compared to 2019.
  • Net profit is up 243% compared to 2019.
  • The partnership between Plexure and McDonald’s Corp [NYSE: MCD] continues to go from strength to strength. McDonald’s previously purchased a 9.9% stake in Plexure in April 2019.
  • Plexure has added several key customers to its expanding international roster. This includes legendary American burger chain White Castle, as well as Super Indo, one of Indonesia’s leading supermarkets.

These developments have been received warmly by shareholders, boosting market interest in Plexure’s future.

 

Where could [NZX:PLX] go from here?

 

We previously recommended Plexure as part of our Small-Cap Speculator service — where our subscribers enjoyed a 300% capital-growth return between December 2018 and July 2019.

However, despite the positivity, it’s important to note that this company remains relatively small and risky.

  • Plexure has just transitioned from a loss of $700,000 in 2019 to a current net profit of $1 million.
  • It only has a small cash reserve of $14 million on hand.
  • Plexure’s current price-to-book ratio is overvalued — 8.7x compared to the NZ software industry average of 2.5x.

Plexure is an intriguing tech investment in this climate.

It represents both risk and opportunity as the world struggles to claw its way out of the COVID-19 pandemic. The coming weeks and months will be crucial to Plexure’s health as it seeks to expand its client base amidst this uncertain economic environment.

 

Regards,

John Ling

Contributor, WealthMorning.com

PS: Have a question on the markets? Subscribe to our free newsletter and access our Wealth Talk podcast where we take general questions on the global economy.

 

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John is the Chief Marketing Officer at Wealth Morning. His responsibilities include marketing, customer service, and compliance. He is an experienced investor and portfolio manager, trading both on his own account and assisting with high net-worth clients. In addition to contributing financial and geopolitical articles to this site, John is a bestselling author in his own right. His international thrillers have appeared on the USA Today and Amazon bestseller lists. John is a shareholder of Wealth Morning.


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