The Dug Technology (ASX:DUG) share price is climbing today. Here's why

The Dug Technology (ASX: DUG) share price has edged 2.30% higher after a mixed trading update

| More on:
Rising asx share price represented by woman with excited expression holding laptop

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

Shares in Dug Technology Ltd (ASX: DUG) are lifting today after the company released a trading update for the financial year to 31 April 2021.

At the time of writing, the Dug Technology share price is up 2.29% trading at $1.115.

The trading results come a day after the company announced it plans to build a high-performance computing (HPC) data campus in Western Australia powered entirely by renewable energy. Let's take a look.

A mixed trading update

Dug Technology announced that unaudited revenue from 1 January to 30 April this year was US$11.8 million compared to US$13.8 million in the prior corresponding period.

In response to the drop in revenue, the company said that revenue in its service division for the four-month period had been below expectations. However, its high-performance computing (HPC) as-a-service and application software revenues have continued to grow through the period.

On a more positive note, Dug Technology advised that its tender activity had increased due to recovering market conditions. The company achieved US$45.9 million in new work proposals in its services division for the first four months of 2021. This represents an increase of 10% on pre-COVID-19 levels, over the same period in 2019.

Despite its year-to-date revenue coming in below expectations, the company is seeing positive signs for growth moving forward. Dug advised that this elevated level of activity had led to increasing project awards, which were expected to contribute positively to revenue growth in FY22.

About the Dug Technology share price

The Dug Technology share price has slipped 8% year-to-date and is down almost 25% since its ASX debut on 12 August 2020 when it closed at $1.45.

The thing is, Dug Technology isn't alone in its underperformance. Many notable initial public offerings that took place around the same time as Dug have underperformed. ASX shares including MyDeal.com.au Ltd (ASX: MYD), Adore Beauty Group Ltd (ASX: ABY), Youfoodz Holdings Ltd (ASX: YFZ) and Cleanspace Holdings Ltd (ASX: CSX) have all struggled to make headway after listing.

Despite its positive performance today, its shares have a long way to go before breaking even with its debt highs of $1.45 and listing price of $1.35.

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia has recommended CleanSpace Holdings Limited. 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

Happy man working on his laptop.
Technology Shares

Can Xero shares surpass $200 in 2025?

Let's see what analysts are saying about this market darling.

Read more »

A player pounces on the ball in the scoring zone of the field.
Technology Shares

Why this ASX sports tech share looks like a winner

Catapult Group has been delivering outstanding returns for investors. Will the winning streak continue?

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Technology Shares

Why this top fund manager thinks this ASX tech share can continue rising

Investors can be excited about this stock.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Broker Notes

Macquarie tips 28% upside for this ASX All Ords tech stock

Let's see what the broker is saying about this growth stock.

Read more »

happy teenager using iPhone
Share Gainers

Up 96% since April, should I still buy Life360 shares today?

A leading expert offers his verdict on the growth outlook for the surging Life360 share price.

Read more »

A female soldier flies a drone using hand-held controls.
Technology Shares

DroneShield shares charge higher on European expansion plans

This high-flying stock is surging again on Tuesday. But why?

Read more »

Human head and artificial intelligence head side by side.
Technology Shares

NextDC share price jumps 8% on big news

Another big announcement has caught the eye of investors this morning.

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Technology Shares

Up 60% in two months, is it too late to buy Pro Medicus shares?

Pro Medicus has been delivering solid returns for years. Can the trend continue?

Read more »