Shareholders of iSelect Ltd (ASX: ISU) had a rocky start to the year, but things have certainly improved a great deal since then. Today the company reported a 34% increase in statutory net profit after tax to $12.9 million, sending its share price higher by around 8%.
Whilst this brings the year to date return to a market-beating 26%, it is worth remembering that its shares dropped around 35% at the start of the year. In fact, its shares have now climbed an astonishing 112% since January 12.
The product comparison company's shares were sold off in January after it provided a trading update to the market advising that it expected full year earnings before interest and tax (EBIT) in the range of $15 million to $18 million.
Issues ranging from increasing staff numbers to falling sales, and a lack of spend on new technology were reasons for the reduced profit outlook according to the new CEO Scott Wilson.
However, it comfortably delivered on its guidance and posted full year EBIT of $16.9 million, excluding restructuring costs of $2.9 million. Better yet it looks set to carry on the momentum from the strong second half into FY 2017.
Wilson stated that:
"We are seeing strong growth across all our existing businesses, including newly launched credit cards. With travel insurance and mobiles coming soon, our expanded product and service offering will better meet the constantly evolving needs of our customers."
For FY 2017 the company is targeting EBIT in the range of $21 million to $24 million, representing impressive EBIT growth of 24% to 42%.
With earnings per share coming in 38% higher at 5.1 cents, iSelect's shares are currently changing hands at 28x full year earnings. This puts it at a slight discount to other online-only tech shares such as Carsales.Com Ltd (ASX: CAR) and SEEK Limited (ASX: SEK) which are trading at around 30x earnings currently.
In my opinion this could represent a reasonable entry point for investors looking at making a long-term investment today.