ASX:FCT

Stock Analysis Report

Firstwave Cloud Technology

Executive Summary

Firstwave Cloud Technology Limited engages in the development and sale of Internet security software to businesses, enterprises, and government organizations in Australia and internationally.

Risk Analysis

Earnings have declined by -38.23% per year over past 5 years

Has less than 1 year of cash runway

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

+ 1 more risk


Snowflake Analysis

Adequate balance sheet with weak fundamentals.

Share Price & News

How has Firstwave Cloud Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FCT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.4%

FCT

5.1%

AU IT

2.0%

AU Market


1 Year Return

-4.6%

FCT

30.2%

AU IT

19.8%

AU Market

Return vs Industry: FCT underperformed the Australian IT industry which returned 34.4% over the past year.

Return vs Market: FCT underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

FCTIndustryMarket
7 Day4.4%5.1%2.0%
30 Day7.7%7.7%3.3%
90 Day-7.2%11.3%5.8%
1 Year-4.6%-4.6%32.7%30.2%25.2%19.8%
3 Year-69.6%-69.6%65.8%53.0%39.6%20.9%
5 Yearn/a140.5%111.2%61.8%25.3%

Price Volatility Vs. Market

How volatile is Firstwave Cloud Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Firstwave Cloud Technology undervalued compared to its fair value and its price relative to the market?

6.69x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate FCT's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate FCT's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: FCT is unprofitable, so we can't compare its PE Ratio to the IT industry average.

PE vs Market: FCT is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FCT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: FCT is overvalued based on its PB Ratio (6.6x) compared to the AU IT industry average (2.7x).


Next Steps

Future Growth

How is Firstwave Cloud Technology forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

37.6%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Firstwave Cloud Technology has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Firstwave Cloud Technology performed over the past 5 years?

-38.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FCT is currently unprofitable.

Growing Profit Margin: FCT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: FCT is unprofitable, and losses have increased over the past 5 years at a rate of -38.2% per year.

Accelerating Growth: Unable to compare FCT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: FCT is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (60.9%).


Return on Equity

High ROE: FCT has a negative Return on Equity (-157.04%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Firstwave Cloud Technology's financial position?


Financial Position Analysis

Short Term Liabilities: FCT's short term assets (A$10.4M) exceed its short term liabilities (A$7.2M).

Long Term Liabilities: FCT's short term assets (A$10.4M) exceed its long term liabilities (A$1.7M).


Debt to Equity History and Analysis

Debt Level: FCT is debt free.

Reducing Debt: FCT has no debt compared to 5 years ago when its debt to equity ratio was 26%.


Balance Sheet

Inventory Level: FCT has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if FCT's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: FCT has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: FCT has less than a year of cash runway if free cash flow continues to reduce at historical rates of -25.9% each year


Next Steps

Dividend

What is Firstwave Cloud Technology's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.3%markettop25%5.4%industryaverage2.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate FCT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate FCT's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FCT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FCT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FCT's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Firstwave Cloud Technology's salary, the management and board of directors tenure and is there insider trading?

2.1yrs

Average management tenure


CEO

David Kirton 0

1.4yrs

Tenure

AU$620,247

Compensation

Mr. David Kirton, B.Com, CPA, has been Chief Executive Officer of Firstwave Cloud Technology Limited since August 22, 2018 and served as its Chief Financial Officer since May 9, 2017 until April 2019. Mr.  ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD428.05K) is above average for companies of similar size in the Australian market ($USD262.68K).

Compensation vs Earnings: David's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.1yrs

Average Tenure

Experienced Management: FCT's management team is considered experienced (2.1 years average tenure).


Board Age and Tenure

11.8yrs

Average Tenure

Experienced Board: FCT's board of directors are seasoned and experienced ( 11.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$299,99930 May 19
Scott Lidgett
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares1,000,000
Max PriceAU$0.30
SellAU$153,97329 May 19
Alium Capital Management Pty Ltd
EntityCompany
Shares500,000
Max PriceAU$0.31
BuyAU$563,36420 Feb 19
Alium Capital Management Pty Ltd
EntityCompany
Shares3,490,442
Max PriceAU$0.16

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 25.8%.


Management Team

  • David Kirton

    Chief Executive Officer

    • Tenure: 1.4yrs
    • Compensation: AU$620.25k
  • Neil Pollock (53yo)

    COO & Head of International

    • Tenure: 2.1yrs
    • Compensation: AU$543.55k
  • John Grant

    Executive Chairman

    • Tenure: 0.5yrs
  • Gai Stephens

    Company Secretary

    • Tenure: 2.2yrs
  • Scott McNeilage

    Chief Engineer

    • Simon Ryan

      Chief Technology Officer

      • Tenure: 12.5yrs
      • Compensation: AU$361.69k
    • Andrew Chamberlain

      Chief Revenue Officer & Sales Director

      • Tenure: 3.8yrs
    • Roger Carvosso

      Marketing Director

      • Jason Singh

        Chief Financial Officer

        • Tenure: 0.8yrs
        • Compensation: AU$273.78k
      • Sundar Bharadwaj

        Business Head of EMEA & North America Region


        Board Members

        • Paul MacRae

          Non-Executive Director

          • Tenure: 11.8yrs
          • Compensation: AU$48.00k
        • John Grant

          Executive Chairman

          • Tenure: 0.5yrs
        • Scott Lidgett

          Non-Executive Director

          • Tenure: 11.8yrs
          • Compensation: AU$52.56k

        Company Information

        Firstwave Cloud Technology Limited's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Firstwave Cloud Technology Limited
        • Ticker: FCT
        • Exchange: ASX
        • Founded: 2001
        • Industry: Internet Services and Infrastructure
        • Sector: Software
        • Market Cap: AU$52.936m
        • Shares outstanding: 316.04m
        • Website: https://www.firstwavecloud.com

        Number of Employees


        Location

        • Firstwave Cloud Technology Limited
        • 132 Arthur Street
        • Level 10
        • North Sydney
        • New South Wales
        • 2060
        • Australia

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        FCTASX (Australian Securities Exchange)YesNew Ordinary SharesAUAUDMay 2016
        FCTCHIA (Chi-X Australia)YesNew Ordinary SharesAUAUDMay 2016
        1TLDB (Deutsche Boerse AG)YesNew Ordinary SharesDEEURMay 2016

        Biography

        Firstwave Cloud Technology Limited engages in the development and sale of Internet security software to businesses, enterprises, and government organizations in Australia and internationally. It offers FirstWave cloud content security gateway, cloud email security, cloud Web security, cloud next generation firewall, and cloud integration services. The company was founded in 2001 and is headquartered in North Sydney, Australia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/18 10:41
        End of Day Share Price2020/01/17 00:00
        Earnings2019/06/30
        Annual Earnings2019/06/30


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.