Weekly| 360 & XRO Surged After Posting Stellar Earnings

As of the close on Friday,$S&P/ASX 200(XJO.AU)$ closed at 7,279.50 points, up 0.31% in the past 5 days.

During the last 5 trading days,  $Life360(360.AU)$ was up 20.62%; $Xero(XRO.AU)$ added 15.09%; $Sayona Mining Ltd(SYA.AU)$ rose 6.98%; $Virgin Money(VUK.AU)$ was up +4.75%; $Block Inc(SQ2.AU)$ increased +3.52%.

1. $Life360(360.AU)$ posted strong earnings

The Life360 Inc rose because the company announced strong financial results for the first quarter of 2023. Here are the key factors that contributed to the share price increase:

Revenue Growth: Life360 reported a 34% year-on-year increase in quarterly revenue to $68.1 million.

The core Life360 subscription revenue, which is a significant component of their business, grew by 66% year-on-year to $46.2 million. This substantial revenue growth indicates the company's ability to attract more customers and generate higher sales.

Positive EBITDA: Despite reporting a net loss of $14.1 million, Life360 achieved positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $0.5 million.

This positive EBITDA was achieved one quarter ahead of expectations, indicating improved operational efficiency and cost management.

User Growth: Life360 experienced a 33% increase in global monthly active users, reaching 50.8 million. Additionally, the number of "paying circles" (customers) grew by 22% year-on-year, with a net quarterly addition of 73,000. This growth in user base demonstrates the company's ability to attract and retain customers.

Positive Outlook: Life360 provided optimistic guidance for the future, expecting core Life360 subscription revenue to grow by more than 50% in 2023.

The company anticipates total revenue to range between $300 million and $310 million for the year, with adjusted EBITDA and operating cash flow projected to be between $5 million and $10 million.

Investors are optimistic about the company's performance and its potential for long-term success.

2. $Xero(XRO.AU)$’s stellar full-year results got positive rating from Goldman Sachs

The share prices of Xero rose due to several positive factors revealed in its full-year results.

Xero reported impressive financial figures for the 12 months ended 31 March. These robust financial results indicate the company's growth and profitability:

• Operating revenue increased by 28% to NZ$1.4 billion

• Annualized monthly recurring revenue grew by 26% to NZ$1.55 billion

• Adjusted EBITDA rose by 45% to NZ$301.7 million.

Subscriber Growth and Revenue per User

Xero experienced solid growth in its subscriber base and average revenue per user across both its ANZ (Australia and New Zealand) and International segments.

The company's performance in the UK market was particularly highlighted, with a net addition of 76,000 subscribers in the second half of the year.

Positive Analyst Response From Goldman Sachs

Analysts at Goldman Sachs responded positively to Xero's results, expressing bullish sentiment toward the company's shares. Their commentary highlighted the sales, EBITDA, and NPAT figures, as well as strong cash conversion and net cash increase.

According to a note out of Goldman Sachs, its analysts have responded to the result by reiterating their buy rating with an improved price target of $130.00.

3. $Sayona Mining Ltd(SYA.AU)$ continues its upward trend as lithium price go up

Lithium miners are seeing some gains today following Citi’s analyst note suggesting the collapse in lithium prices is likely over, with Raymond James also finding bullish fundamentals.

In fact, China lithium carbonate prices have risen 44% in the past three weeks to $34K per ton.

data from Factset

4. $Virgin Money(VUK.AU)$ and $Block Inc(SQ2.AU)$ rose as finance sector ended slightly up

According to data from Bloomberg, financials rank 4th in this week.

Virgin Money UK PLC provides banking products and services for consumers, and small and medium sized businesses.

$Virgin Money(VUK.AU)$ announced a cash dividend of 0.033 with an ex-date of May. 18, 2023

Peller rates $Block Inc(SQ2.AU)$ outperform and gave a $90 target price. The consensus average for $Block Inc(SQ2.AU)$ is $88.20. Analyst price targets range from $60 to $170.

Block Inc has 36 buy recommendations, 11 holds and 3 sells.

The Relative Strength Index (RSI) indicates the company is neither overbought nor oversold.