Why is the Cirralto (ASX:CRO) share price up more than 3,000% in 12 months?

The Cirralto Ltd (ASX:CRO) share price has been a huge mover on the S&P/ASX All Technology Index this year, but why?

| More on:
A male ASX investor wearing glasses and a beanie and denim shirt puts his hand to his chin wondering whether to buy ASX shares

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

The Cirralto Ltd (ASX: CRO) share price has been a huge mover on the S&P/ASX All Technology Index (ASX: XTX) this year, rising from just one cent to a high of over 11 cents per share.

The Cirralto share price is already in the news today and has closed down 7.3% at 6.3 cents per share after its latest investor presentation.  

Let's take another look.

Cirralto's ups and downs

Long-time investors may be familiar with the Cirralto story. It's a technology investment company based in Australia, which acquires, develops and commercialises tech assets that modernise IT systems.

Data storage, migration and cloud-based computing are all key areas for the company. Its products include PoolBox, Flash Convert, Synk'd and its latest payment service, Spenda.

The company has attempted to enter the buy now, pay later (BNPL) space as a B2B offering over the past few months, which saw its share price surge and reach 12-month gains of 4,810% in March. 

Throughout this period its often seen daily gains of more than 200%, punctuated by significant weekly and monthly losses.

At its high, it raised $18 million in capital to launch Spenda in the BNPL market. After a period of work behind the scenes and share price drops, which perhaps reflected the ongoing investor uncertainty in this company, it upgraded its pay services at the beginning of May.

It was potentially seen as being late to the party after such high initial BNPL interest, and that appears to have hurt trust in the company. The company's latest financial reports show a 25% increase in cash receipts, 12% increase in customer numbers, and 18% increase in merchant turnover.

Still, the Cirralto share price falls.

The company believes Spenda has a market advantage because it can provide payment services cheaper than most of its rivals on the market, and it has a higher level of integration with a range of existing platforms.

It's currently tightly marketing Spenda in key areas, where it hopes to create notable efficiencies in connecting consumers, retailers and manufacturers throughout the payment process.

Foolish takeaway

Despite seemingly positive reports from the company this month, some investors clearly believe it has been overhyped. The Cirralto share price has lost 22% in the past month and has declined on 13 of the past 30 days. 

It's easy to see why Cirralto could drive this kind of hype. It's a company that appears to have many of the right pieces: strong sales growth, cloud-based IT systems, BNPL technology, high profile financial partnerships and a huge market capitalisation for a six-cent share.

But it's also proven a little nerve-wracking, and some director share sell-offs in hard times create an uneasy feeling. It's also been exceptionally volatile in a period that's seen a boom in ASX technology shares, with no shortage of quiet achievers on the index. 

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Three businesspeople leap high with the CBD in the background.
Technology Shares

ASX 200 tech stock jumps 10% on stellar Q2 update

This high-flying tech stock delivered further strong growth during the second quarter.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Technology Shares

Which ASX 200 tech stock is surging today on big news?

Investors are cheering on this news. Let's see what the company announced this morning.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Technology Shares

3 reasons Xero shares are poised to rise in 2025

This tech stock has a lot going for it, in my view.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

Why is this ASX All Ords stock crashing 10% on Friday?

This share is having a tough time. What's going on?

Read more »

Unsure man analysing data on laptop.
Technology Shares

Down 7%: What's going on with the WiseTech share price this week?

Could the ex-CEO be selling even more stock?

Read more »

Scared looking people on a rollercoaster ride representing the volatile Mineral Resources share price in 2022
Technology Shares

How the Brainchip share price rode a rollercoaster to 129% gains in 2024

Brainchip shares weren’t for the faint-hearted in 2024.

Read more »

A young boy sits on his father's shoulders as they flex their muscles at sunrise on a beach
Technology Shares

2 booming ASX tech shares with more 'significant growth potential'

A leading fund manager forecasts more growth ahead for these booming ASX tech stocks.

Read more »

A father helps his son look through binoculars during a family holiday or day out in the city.
Technology Shares

Should you buy the 20% dip on Life360 shares?

Is now the right time to invest in this exciting tech company?

Read more »