Shares of $62 million mobile payments and marketing company, Mobile Embrace Ltd (ASX: MBE) have fallen 9% in early trade this morning, following the announcement of its half-yearly results.
In the six months to 31 December 2014, Mobile Embrace's profit fell 5.5% to $1.63 million, with marketing and advertising expenses offsetting a big chunk of the group's 48% revenue increase.
However despite the profit fall and share price movements the group experienced significant growth within its M-payment and M-Marketing businesses.
The payments business increased its customer base 24%. While revenue growth shot up an impressive 128% within the Marketing business, which includes results from the company's two most recent acquisitions, Eggmobi and The Performance Factory.
With more and more consumers turning to mobile devices for browsing online shops, entertainment (games, videos etc.) and purchases, the two markets which Mobile Embrace operates in are expected to grow rapidly in coming years.
Buy, Hold or Sell?
Whilst the company is certainly not short of potential, the big question remains as to whether or not it'll be able to capitalise on it. With larger international competitors vying for a spot in the next wave of mobile growth, the company presents as a somewhat speculative investment.
However management appear to be making the right moves and despite the market reacting poorly to a report which appeared to show the company setting the foundation for higher future returns, Mobile Embrace could be worthy of a spot on your watchlist.
