The Damstra Holdings (ASX:DTC) share price is up 50% in a month!

What has caused the sudden rise in the share price?

| More on:
Woman attached to rocket flies into the air

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 share price of ASX workplace technology company Damstra Holdings Ltd (ASX: DTC) has been on an absolute tear recently. In just the last month alone, Damstra shares have skyrocketed almost 50% higher (to $1.20, as at the time of writing). So, what is behind this sudden rally in the Damstra Holdings share price?

Company Background

First, a quick look at what Damstra actually does – because it's actually quite interesting.

Damstra operates in a fairly niche industry. It develops tailored workplace management solutions for corporate clients operating in specialised fields like mining, construction and utilities. These sorts of workplaces often have very specific safety, compliance and regulatory standards they need to meet in order to remain operational. Damstra partners with these clients to develop the systems and processes required for them to exceed the unique demands of their industries.

For example, Damstra recently worked with a mining company to fully digitise its safety compliance forms, delivering a bespoke technology solution that ended up saving the company $1 million a year.

Recent news

The Damstra share price really took off following the release of the company's fourth-quarter FY21 activities report on 22 July. In it, Damstra reported record quarterly revenues of $9.1 million, a massive jump of 75% over the prior comparative period. The company also brought in record cash receipts during the June quarter, amounting close to $10 million.

Commenting on the results, Damstra CEO Christian Damstra hinted that Damstra had a strong sales pipeline and that further growth could still be on the way. He stated that Damstra remains "in productive contractual negotiations with several potentially material clients in the United Kingdom and North America, all recognised leaders in their respective fields and each with more than 10,000 users."

Recent moves in the Damstra Holdings share price

Although the recent gains in the Damstra Holdings share price have been great news for shareholders, it's worth pointing out that it comes at the end of a pretty rough period for Damstra shares.

After surging to a new all-time high price of $2.44 last October, Damstra shares shed close to 70% of their value. Just prior to the company releasing its quarterly activities report, the Damstra share price had plunged to a new 52-week low of just $0.75.

It's important to keep this context in mind because even despite the recent surge, the Damstra Holdings share price is still down over 20% this year. Investors may still be concerned about the impacts of continued lockdowns in Australia, as well as the resurgence of the delta strain of COVID-19 internationally. However, the announcement of major infrastructure projects in the US could also create possible tailwinds for Damstra.

All these competing factors make Damstra a really interesting company to watch, particularly over the short term. And all eyes will be on the Damstra Holdings share price when the company reports its full-year FY21 results to the market on 26 August.

Motley Fool contributor Rhys Brock owns shares of Damstra Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. 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

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Technology Shares

Why are investors fighting to buy this speculative ASX stock today?

What is getting investors excited today? Let's find out.

Read more »

Two men laughing while bouncing on bouncy balls
Technology Shares

Top broker says ASX 300 tech stock has 18% upside after sell-off

ASX 300 investors overreacted in punishing the high flying tech stock yesterday, this top broker says.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Earnings Results

Xero share price rockets to record high on explosive half-year growth

The tech star delivered another impressive half year results this morning.

Read more »

A young man goes over his finances and investment portfolio at home.
Technology Shares

These ASX 200 tech stocks just crashed! Is this a no-brainer buying opportunity?

Bell Potter thinks these tech stocks could be great options following declines this week.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Technology Shares

Down 45% in 8 months, why this ASX 200 tech stock 'now looks attractive'

Down 45% since March, this investing expert sees good value in the ASX 200 tech stock.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Technology Shares

Why is this ASX tech stock crashing 27% today?

Why are investors hitting the sell button? Let's find out.

Read more »

Man looks confused as he works at his laptop. watching the Magnis share price movements
Technology Shares

WiseTech share price in spotlight again as class action mounts

The headlines continue rolling in.

Read more »

Unsure man analysing data on laptop.
Earnings Results

ASX 200 tech stock sees red as investors punish Q3 results

Investors continue digesting the numbers.

Read more »