Why has the Nuix share price surged 95% in the past month?

This tech share has been making investors smile this month.

| More on:
A man sees some good news on his phone and gives a little cheer.

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 Nuix Ltd (ASX: NXL) share price has continued its positive run on Monday.

At one stage today, the investigative analytics and intelligence software company's shares were up a further 10% to a 52-week high of $1.66.

When the Nuix share price hit that level, it meant it was up an enormous 95% in July.

Why is the Nuix share price shooting higher this month?

Investors have been scrambling to buy the tech company's shares since the release of its preliminary full-year results.

Those results revealed a significant improvement in the company's performance, which underpinned a major re-rating of its shares after being in the doldrums for a couple of years.

Nuix revealed that it expects to report a 14% to 15% increase in annualised contract value (ACV) to $184 million to $186 million and a 19% to 20% lift in revenue to $181 million to $183 million. This was great news considering how the number of multi-year deals fell on the previous year.

But perhaps what got investors particularly excited was its earnings. Thanks to a combination of its top-line growth and cost discipline, Nuix's earnings grew at an even quicker rate. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to increase 51% to 61% (excluding one-offs) to $44 million to $47 million.

A final positive was that the company was cash flow positive in both the second half and over the full year (excluding one-offs). This was better than expected, with management previously aiming to just be underlying cash flow neutral for the year.

So, with a cash balance of $29.6 million, no debt, and positive cash flow, the risk of another capital raising has diminished significantly.

Overall, given the above, it isn't hard to see why the Nuix share price smashed the market this month.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

More on Technology Shares

Man holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

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

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »