In a November 5 earnings season preview, focused on NZ-listed tech stocks, Jarden said, "We view Eroad as most at risk from a deteriorating economic backdrop, with Pushpay offering a more resilient revenue base."
Yesterday, Eroad - a maker of fleet-tracking technology - tightened its FY2023 revenue guidance from the previous $150m-$170m to $154m-$164m, and announced a five-year 9000 truck contract with US food service logistics firm Sysco and the renewal of a 6000-vehicle contract with a second American firm, ABC Supply. (Its ebit guidance was unchained a $5m loss to breakeven).
Investors liked what they saw. Eroad was the largest gainer of the NZX 50 up 12.2 per cent to close Monday at $1.38 ($1.45 at close 8/11/22).
But in a follow-up note overnight, Jarden maintained its neutral rating on Eroad and slashed its 12-month target price from $2.75 to $1.75 and cut its FY2024 and FY2025.
Analyst Guy Hooper said the North American wins were meaningful. He estimates the Sysco deal will bring in around $6m per year, equating to around 4 per cent of Eroad's annual revenue.
But that was within Jarden's existing growth forecast.
And while Eroad had signalled moves to cut costs, Hooper saw inflation and the economic slowdown leading to longer lead times for orders. Trucking was also one of the most cyclical industries, making it one of the most vulnerable to recession.
Craigs Investment Partners' analyst Josh Dale called Eroad's American deals "much-needed good news" after an "annus horribilis' that saw shares fall from a high of $6.70 in July last year to $1.38 following the abrupt departure of longtime chief executive Steven Newman.
However, Dale also tempered that while the revenue forecast was effectively unchanged, if you took the midpoint, it was arguably a modest downgrade given the NZ dollar had depreciated 10 per cent since Eroad's last update. He retained his neutral rating.
New Eroad CEO Mark Heine recently told the Herald that his firm had made technology and strategy missteps in the key US market - but that its $158m takeover of rival Coretex, and shifts in approach, would turn around its fortunes in the territory.
Hooper said there was execution risk as the two firms integrate.
Eroad reports its half-year result on November 25.
https://www.nzherald.co.nz/business/the-most-at-risk-tech-stock-revealed-and-one-of-the-safer-bets/N5TVBPSMJFHAVDSNE7EKJWJ47A/
Quote from: kiwi2007 on Nov 08, 2022, 04:23 PMIn a November 5 earnings season preview, focused on NZ-listed tech stocks, Jarden said, "We view Eroad as most at risk from a deteriorating economic backdrop, with Pushpay offering a more resilient revenue base."
Yesterday, Eroad - a maker of fleet-tracking technology - tightened its FY2023 revenue guidance from the previous $150m-$170m to $154m-$164m, and announced a five-year 9000 truck contract with US food service logistics firm Sysco and the renewal of a 6000-vehicle contract with a second American firm, ABC Supply. (Its ebit guidance was unchained a $5m loss to breakeven).
Investors liked what they saw. Eroad was the largest gainer of the NZX 50 up 12.2 per cent to close Monday at $1.38 ($1.45 at close 8/11/22).
But in a follow-up note overnight, Jarden maintained its neutral rating on Eroad and slashed its 12-month target price from $2.75 to $1.75 and cut its FY2024 and FY2025.
Analyst Guy Hooper said the North American wins were meaningful. He estimates the Sysco deal will bring in around $6m per year, equating to around 4 per cent of Eroad's annual revenue.
But that was within Jarden's existing growth forecast.
And while Eroad had signalled moves to cut costs, Hooper saw inflation and the economic slowdown leading to longer lead times for orders. Trucking was also one of the most cyclical industries, making it one of the most vulnerable to recession.
Craigs Investment Partners' analyst Josh Dale called Eroad's American deals "much-needed good news" after an "annus horribilis' that saw shares fall from a high of $6.70 in July last year to $1.38 following the abrupt departure of longtime chief executive Steven Newman.
However, Dale also tempered that while the revenue forecast was effectively unchanged, if you took the midpoint, it was arguably a modest downgrade given the NZ dollar had depreciated 10 per cent since Eroad's last update. He retained his neutral rating.
New Eroad CEO Mark Heine recently told the Herald that his firm had made technology and strategy missteps in the key US market - but that its $158m takeover of rival Coretex, and shifts in approach, would turn around its fortunes in the territory.
Hooper said there was execution risk as the two firms integrate.
Eroad reports its half-year result on November 25.
https://www.nzherald.co.nz/business/the-most-at-risk-tech-stock-revealed-and-one-of-the-safer-bets/N5TVBPSMJFHAVDSNE7EKJWJ47A/
Down 37% from the time of this post - just 2 months ago. Jarden's warning seems fairly well timed but their "slashed" 12-month target price from $2.75 to $1.75 is looking optimistic. The share price is sitting just above the 5 year low and no sign of an end to the sell off http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ERD/405121/386786.pdf
Don't hold, but considered it some time ago.
Lots of entrenched competition in the US, plus many independent truckers just not that keen on being 'monitored' (perhaps a reason why ERD has struggled in Aus as well as USA??)
Maybe a turn-around story one day.....but will need a lot more key client 'wins'. GLH.
They considering takeover offer
Brilliant bought heaps of shares at $1.30 yesterday and mentioned takeover in SSH
All on but high premium to recent price ....but nowhere near $6.70 it once was
Never been a holder but I asked a broker today what he thought of latest cap raise. His comments "rubbish company, don't go near it, run for the hills"
Not often my broker has so much conviction on a stock.
Quote from: Shareguy on Sep 07, 2023, 02:23 PMNever been a holder but I asked a broker today what he thought of latest cap raise. His comments "rubbish company, don't go near it, run for the hills"
Not often my broker has so much conviction on a stock.
.
The market agrees with your broker (https://www.youtube.com/watch?v=86URGgqONvA&ab_channel=IronMaiden) and has rewarded Eroad's shenanigans with 67 cps against the post-raise theoretical ex-rights price of $1.12.
An owner of a trucking business I work with love eRoad given the RUC savings it delivers (which I have seen and can confirm). However, some other software packages refuse to create APIs and/or tools to allow eRoad to integrate/interface with their systems that have nothing to do with RUC. Selling software is hard enough without facing those sorts of issues.
Quote from: Ferg on Oct 02, 2023, 10:07 PMAn owner of a trucking business I work with love eRoad given the RUC savings it delivers (which I have seen and can confirm). However, some other software packages refuse to create APIs and/or tools to allow eRoad to integrate/interface with their systems that have nothing to do with RUC. Selling software is hard enough without facing those sorts of issues.
I'm guessing that this issue is not peculiar to their NZ operations?
Quote from: Hectorplains on Oct 02, 2023, 10:19 PMI'm guessing that this issue is not peculiar to their NZ operations
Good question. The client is 100% local, the software is international. But looking at their website they list eRoad as an option....so I have just e-mailed my client.
https://justthebusinessjennyruth.substack.com/p/whats-gone-wrong-inside-the-eroad
Jenny Ruth takes us on a guide tour of the strange street that is Eroad's cap raise. In general, her Just the Business is worth reading and supporting too.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ERD/419443/404476.pdf
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ERD/419442/404475.pdf
UBS and Regal both lumped with a stack of 'sub-underwritten' shares. Them dumping into every chance they get is going to supress the share price for many moons.
Latest results look good.....(the heading for this thread needs modification!)
https://www.nzx.com/announcements/431510
Financial Highlights
•Achieved positive Free Cash Flow (to the firm) of $1.3m in FY24 compared to negative free cash flow (to the firm) of $29.9m in FY23. This improvement is the result of growth in units, price increases and cost control.
•Revenue increased to $182.0m for FY24 from reported revenue of $174.9m in FY23 and normalised revenue of $165.3m in FY23. This represents a 10.1% increase against normalised revenue for the prior comparable period, normalising for the one-off acquisition accounting adjustment of $9.6m in FY23 relating to the Coretex merger. Growth in revenue was delivered across all markets.
•Annualised Monthly Recurring Revenue increased by $24.1m (15.7%) to $177.8m in FY24 from $153.7m in FY23, reflecting growth across all markets and support by favourable foreign exchange.
•EBIT of $0.8m in FY24 compared to $1.7m in FY23. Normalised EBIT increased to $4.4m in FY24 up from $(4.5)m in FY23. Normalised for 4G hardware upgrade costs of $3.6m in FY24 and integration costs of $3.4m and one-off acquisition revenue of $9.6m in FY23........
OUTLOOK
•FY25 Revenue guidance of $190m to $195m
•FY25 EBIT guidance of $5m to $10m, normalised for the 4G hardware upgrade program
•EROAD expects to be free cash flow positive in FY25
More progress...... materially important new customer signed in NZ/Aus.
https://www.nzx.com/announcements/433430
Someone was paying up in Aussie late in the day yesterday closed @ 1.26 Aud So circa 1.38 nz.( NZ Close $ 1.26)
Be interesting to see if there is an announcement today .......
ERD doesn't get much attention here..... however if you are into chart analysis take a look.
There is suddenly a lot of interest in ERD.....SP up over 50% in 1 month on big volumes.... maybe a takeover?
Exciting times.
Interesting to note in the latest investor presentation that the installed base in the US has fallen from 107k in H2 24 to 104k in H2 25. There's a profitable business in here, but meaningful growth is another matter. Currently selling on a P/E of 200. A trade bidder doing the synergy sums on the $59m of corporate and development cash costs can be the only way to square the valuation circle. But why would they rush? A dominant position in the NZ market but really nothing in the US and Australia. Compare that to XRO on a P/E of 137, offering strong market positions in Australia and the Uk as well as NZ,together with footholds in other territories.
Wecome to the fourm Foghorn, an excellent first post. Many people including myself think the likes of XRO's valuation is also wildly overdone.
Some speculation on the other channel by well respected poster Ronaldson that ERD will replace Manawa when the scheme of arrangement is implemented on 9 July. I think Ronaldson is wrong and NPH are FAR more likely to be the one included in the index.
Slight downgrade for FY26 and a re-prioritisation back to Australia & NZ.
https://www.nzx.com/announcements/460917
Also a bunch of Management & Governance changes. SP has been caned down 36% as I post this.
'slight downgrade' is lower sales but the lower sales coming from a non renewal of contract from Feb which implies that a full year impact is quite significant seeing they have a March year end
The cash flow margin sort of says cash flow was expected to be about $20m and now could be as low as $10m ...ouch
First of three perhaps?
Quote from: winner (n) on Oct 17, 2025, 03:52 PMThe cash flow margin sort of says cash flow was expected to be about $20m and now could be as low as $10m ...ouch
Is that to the firm or to equity holders... Not entirely clear.
Anyway looks like the chair is now on $600k or so, maybe this can make ERD the first nzx company with triplet CEOs.
https://www.youtube.com/watch?v=peiaCwp_qu0
FYI - ERD profiled on Equity mates podcast - at 17 min mark.
podcast came out before big drop.