Aussie Broadband (ASX:ABB) share price hits all-time high

The Aussie Broadband Ltd (ASX: ABB) share price just hit an new all-time record high despite recent market volatility and tech selloffs.

| More on:
Aussie Broadband share price ASX share price rise represented by woman looking excitedly at computer screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Aussie Broadband Ltd (ASX: ABB) shares have cruised to a record all-time high of $2.97 on Thursday. The Aussie Broadband share price has surged by 10% this week despite no market-sensitive news from the company. The last significant announcement from Aussie Broadband was its half-year results on 17 February. 

Let's take a closer look at what's been happening for the Aussie telco.

Aussie Broadband share price ignoring the noise

The Aussie Broadband share price is ignoring the recent market volatility, including the sharp selloff of tech shares amid fears over rising bond yields. Its shares have pushed higher on Thursday to retest previous record highs set on 27 January. 

Aussie Broadband shares are up there as one of the best performing initial public offerings (IPOs) of 2020. The company had an IPO offer price of $1.00 per share with an indicative market capitalisation of approximately $190 million. 

Aussie Broadband is a licensed carrier that provides NBN subscription plans and bundles to residential homes, small businesses, not-for-profits, corporate and managed services providers.

Despite there being 189 direct and indirect NBN service providers as at June 2020, 92% of market share is concentrated among four main companies, Telstra Corporation Ltd (ASX: TLS), TPG Telecom Ltd (ASX: TPG), Optus and Vocus Group Ltd (ASX: VOC).

While there might be somewhat of an oligopoly in the Australian telecommunications market, Aussie Broadband has managed to grow its NBN market share from 1.09% in June 2017 to 3.51% as at June 2020. 

The company aims to continue growing its market share by leveraging its customer loyalty to deliver new products and pursuing initiatives to acquire more customers. 

Solid half-year results 

Aussie Broadband delivered an impressive half-year result with revenues up 89% to $157.4 million and earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 87% to $7.3 million. The company cited strong organic growth across both its residential and business segments. Its strong results translated to an improvement in market share to 4.2%. 

The company is currently still loss-making, with its half-year results delivering a net loss after tax of $1.4 million. This represents a significant improvement against the $10.5 million loss from the prior corresponding period. Aussie Broadband's prospectus forecast that FY21 results should deliver a maiden profit of ~$529,000. 

One of few successful IPOs from 2020 

The Aussie Broadband share price represents one of the few IPO success stories (excluding mining exploration companies) from 2020.  

IPOs that hit the ground running last year included Douugh Ltd (ASX: DOU), COSOL Ltd (ASX: COS), Credit Clear Ltd (ASX: CCR) and Dusk Group Limited (ASX: DSK) which have delivered respective returns of around 550%, 220%, 95% and 50%. 

Meanwhile, the likes of Youfoodz Holdings Limited (ASX: YFZ), Plenti Group Ltd (ASX: PLT), Payright Ltd (ASX: PYR), DUG Technology Ltd (ASX: DUG), Adore Beauty Group Ltd (ASX: ABY), and Zebit Inc (ASX: ZBT) have yet to deliver any value to shareholders who participated in their IPOs. 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Aussie Broadband Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Brainchip, Findi, Lottery Corp, and REA shares are falling today

These shares are ending the week in the red. But why?

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 shares leading the charge higher this week

Investors have been piling into these four ASX 200 shares this week. But why?

Read more »

Woman and man calculating a dividend yield.
REITs

What price target does Macquarie have on Goodman Group shares?

Goodman Group posted an interesting set of numbers in Q3. Here's Macquarie's take.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why Catapult, Champion Iron, Healthco, and Meeka Metals shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »

Miner looking at a tablet.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »

two women celebrating good news on phone
Broker Notes

Top broker names 3 ASX All Ords stocks with between 30% and 77% upside

These 3 stocks offer compelling potential upside.

Read more »

Woman on her phone with diagrams of tech sector related elements linking with each other.
Broker Notes

A leading fund manager is buying these ASX 200 tech shares

Let's see why the fund manager has these shares in its focus portfolio.

Read more »