3 Top Performing ASX Tech Stocks To Consider in November 2021
The ASX 200 fell 10.30 points or 0.14% to $7,423.90, retreating from early gains to extend losses for the second consecutive session as Wall Street indices eased from record highs overnight amid increasing inflationary fears. The heavyweight mining sector also dipped as iron ore prices fell to 12-month lows. Get Insights on Top 3 ASX Tech Stocks
Our List of ASX Tech Stocks to Consider in October 2021
As the market is on the verge of a rebound, we have selected three stocks that can contribute to growing your portfolio:
PointsBet Holdings (ASX: PBH)
The first one is PointsBet. Pointsbet is a licensed corporate bookmaker with operations in Australia and the United States. The company has developed a scalable cloud-based wagering platform through which it offers its clients sports and racing wagering products. What is good about the company, is that it had been appointed as an Official Sports Betting Partner of the NHL. PointsBet derives revenue from the Australia segment which includes revenue from sports and race betting services provided to Australian customers.
At the time of writing, the PBH share price is up by 0.34% to $8.84 per share. Despite the broad market remaining quite neutral, PointsBet is doing quite well. What exactly is driving the price higher? The company reported that PointsBet Canada has entered into an agreement to become the exclusive sports betting partner of Curling Canada. PointsBet Canada is a 100% owned subsidiary of PointsBet Holdings. However, this is non-price sensitive news, unlikely to have a material impact on the PointsBet share price.
According to the release, more than 13 million viewers tune in to Curling Canada’s events every season. That ranks it among the highest-rated sports programming in the country. More importantly, the agreement includes complete category exclusivity covering the company’s Sports Book and Online Casino for all Curling Canada event broadcasts.
The PointsBet share price has struggled so far this year, down 23.3% year to date. That compares to a gain of 12.3% posted by the ASX 200. However, PointsBet shares are up by about 9% since last week.
Freelancer (ASX: FLN)
Another interesting stock to consider is Freelancer. Freelancer is engaged in freelancing, outsourcing services, and crowdsourcing marketplace. It offers software development, writing, data entry, and design services. The group is organized into two operating segments: Online marketplace and Online payment services. The company operates predominantly in Australia, where most of the online revenues are incurred.
The freelancer share price has plunged by more than 23% since the company has released its first-half results back in July. At the time of writing, shares in the global freelancing and outsourcing marketplace have tumbled by 15.4% to 79.5 cents since the last three months. However, year-to-date, FLN shares gained an impressive 63.9%. So, what is happened since July?
Freelancer revealed 1H21 group net revenue had tipped 5.7% lower on the prior corresponding period to $27.8 million. The slight decline in revenue was underpinned by weak currency movements. This droves a negative impact of 17.4% in the first half. This trickled down to both negative EBITDA and operating net profit after tax of -$2 million and -$1.6 million respectively. The company’s net operating cash flow also declined from $6.2 million in 1H20 to $2.7 million in 1H21.
The weaker financial performance could be a near-term reason why the Freelancer share price is experiencing such a heavy sell-off.
However, it is worth noting that, despite a slight decline in revenue, the company experienced a record in gross payment volumes, the total payments to Freelancer for products and services transacted. The first half of FY21 gross payment volumes came in at a record $566 million, up 35.9% on the PCP.
Pleasingly, we believe the company is on track to achieve its milestone of $1 billion in gross payment volumes. In addition, Freelancer maintained a solid cash and cash equivalent position of $31.8 million.
Xero (ASX: XRO)
And finally, one of the hot stocks of the moment to consider is Xero. Xero provides a cloud accounting solution for small businesses. The software enables SME owners to run their business efficiently on the go by uploading their banking transactions and invoices. Thus, that is a fantastic solution valued by many clients. On top of that, Xero reconciles the transactions and provides its clients with accounting services for a subscription fee.
The last month was a great month for Xero. The cloud-based firm saw its stock appreciated by almost 7% since early mid-October to $148 per share. The outperformance has been driven by a positive reaction to the launch of its app store.
Xero launched its App Store across the ANZ and the UK markets. This is part of the company’s plan to streamline and simplify access to the thousands of apps currently available in its ecosystem. This App Store has a similar model to Apple and Google App store. It charges a 15% fee for app subscriptions purchased through its store.
However, Xero share price slumped along with the broad market correction in September losing all the gains accumulated in August.
Although looking at the long term, we see can only see a positive outcome for Xero. We believe, the recent correction is just a temporary event. Xero remains fundamentally a solid growth stock.
So far, we like the idea of increasing focus on monetising its strong market positions within the ANZ and the UK markets. Accordingly, we think that the incremental revenues will boost Xero to accelerate its ongoing global expansion.