To The Moon

As of the close on Friday, $S&P/ASX 200(XJO.AU)$ closed at 8,436.20 on Friday, up 0.51% in the past 5 days.

1. $LIFE360 INC-CDI(360.AU)$ +20.48%

We wouldn't blame Life360, Inc. shareholders if they were a little worried about the fact that James Synge, the Independent Non-Executive Director recently netted about AU$1.7m selling shares at an average price of AU$68.57. 

However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 3.7%.

Life360's stock is trading at A$24.67, below its estimated fair value of A$29.08, suggesting potential undervaluation based on cash flows. Despite recent insider selling and shareholder dilution, the company reported a positive shift to profitability with Q3 2024 earnings showing net income of US$7.69 million compared to a loss previously. Revenue growth is expected to outpace the broader Australian market, although guidance was slightly lowered due to reduced hardware sales expectations.

2. $Web Travel Group Ltd(WEB.AU)$ +19.77%

Web Travel share price jumps on results day.

Bookings up 23% to 4.3 million

Total transaction value (TTV) up 25% to $2.59 billion

Revenue up 1% to $170.4 million

Underlying EBITDA down 8% to $70 million.

For the six months ended 30 September, Web Travel reported a 1% increase in revenue to $170.4 million. This reflects weaker margins, which largely offset strong booking and TTV growth over the prior corresponding period. 

The company revealed that its top line growth has continued in the second half. For the first seven weeks of trading for the second half, TTV is up 23% and TTV margins were at 6.5% in October.Based on current trading, management is expecting FY 2025 EBITDA to be between $117 million to $122 million.Looking further ahead, Guscic advised that he expects the company's margins to recover next year. The Web Travel share price is up 20% since this time last month.

3. $PRO MEDICUS LTD(PME.AU)$+13.59%

The Pro Medicus Ltd share price soared 9% on Thursday after winning its largest ever contract. The company revealed it has signed an A$330 million, 10-year contract with Trinity Health, one of the largest not-for-profit healthcare systems in the US.

 Pro Medicus continues to win impressive, large contracts with huge clients in the US. If it keeps winning contracts like this, it will rapidly grow its market share in the world’s biggest economy.

The company could eventually become one of the largest technology business at this rate. It’s now priced on a higher price/earnings (P/E) ratio than ever. However, its profit could soar in the coming years with all of the previously-announced contracts and boosted by its huge (and rising) profit margins.

4. $SIGMA HEALTHCARE LTD(SIG.AU)$ +13.33%

The Australian Competition and Consumer Commission’s (ACCC) approval of the Chemist Warehouse and Sigma merger could prove to be a landmark moment in the history of Australia’s $20 billion pharmacy industry. The merger still needs to be approved by each company’s shareholders and the Federal Court, but if that occurs, Chemist Warehouse and Sigma will become the biggest pharmacy retailer in Australia. 

In addition, our preliminary estimate of forecast fiscal 2025 earnings for the merged group implies Sigma's shares are currently trading at a forward P/E ratio of 33 times. This suggests minimal upside if the deal goes through as proposed, outweighed by the significant downside risk if Sigma cannot overcome all ACCC concerns.

5. $Guzman y Gomez Ltd(GYG.AU)$ +12.67%

Guzman Y Gomez Limited (GYG) has differentiated its business by delivering clean, fresh, made-to-order, Mexican-inspired food. Food is served to guests via multiple sales channels, restaurant formats and dayparts.

In the FY24 result, Guzman y Gomez reported its revenue increased 32.1% to $342.2 million, underlying operating profit rose by 52.9% to $44.8 million, and underlying profit before tax (PBT) jumped 113.7% to 16.3 million.

Pleasingly, the company reported that its corporate restaurant profit margin increased from 14.4% to 17.4%, a three percentage point increase. With impressive plans to grow significantly in scale over the next decade or two, We believe Guzman y Gomez shares can continue rising, despite current valuations.