ERD - ERoad. (Transport sector technology)

[BlackPeter]

Guess im replying to myself now - but this price just keeps dropping and dropping - every day 2-5% - down to 1.47 with no obvious reason why - surely its going to find some bottom level soon and worth some sort of punt, the numbers dont look that terrible, it was up in the $6 range not that long ago. Surely it cant all be about the CEO.

OK - I have to admit, I dropped ERD a long time ago from my watchlist, i.e. I am talking here out of a certain position of ignorance. However, just noticing that you put a lot of bias into your posts ... and I suppose this might be the problem for a lot of the remaining holders.

You say price is dropping without apparant justification. Question - did it ever occur to you that there never might have been a justification for the high price the share used to trade at? From memory - one never could justify the ERD share price using any of the usual formulas based on earnings - i.e. if at all it was investors dreaming up a really huge number for growth, adding a premium for cool technology, another premium for growth hype and multiplying the result with 42.

Markets don't use this rating mechanism forever ...

Potentially markets are just realizing that growth is weak, competition does not sleep and the (cell phone / GPS based) technology is not really rocket science?

What I remember about ERD is that their technology is not outstanding and their market saturation used to be in the US not even close to the top three in the field. I assume this hasn't changed in the last three years or so, has it? ERD have however a long and successful history of disappointing investors ... and their growth rates never have been material for a growth company.

Why would anybody be surprised that SP is dropping? The only surprise I see is - why did it take that long?

[percy]

Stockhead this morning
ERD also expects revenue to increase to at least $250m by FY25.

Interestingly, earlier this month Bell Direct market analyst Sophia Mavridis flagged the company as her top pick in the tech sector.

Mavridis said the company has a strong track record of average revenue per user (ARPU), as well as revenue growth.

“Upcoming product launches are significant opportunities to expand ARPU. EROAD has extremely attractive unit economics and internal rate of return of new contracted units.

“The company also has material growth opportunities in Australia and North America and are successful in a large and growing addressable market.”

Bell Potter view EROAD to have considerable growth opportunity and has therefore retained their Buy recommendation, however, have reduced their price target to $3.40 following its earnings coming in lower than its expectation.

[Rawz]

If you look back over the last 3 years, its all good. Revenue has increased from $57m to $107m. That's a whopping 88% growth.
Only problem is the share count increased from 67m to 96m Or 43% so shareholders a tipping in heaps to force growth.

They need to sustainably grow now that they are a $100m+ rev company.

The whole CEO thing- what an absolute disaster. Hard to have confidence eh.

On my watchlist

[percy]

If you look back over the last 3 years, its all good. Revenue has increased from $57m to $107m. That's a whopping 88% growth.
Only problem is the share count increased from 67m to 96m Or 43% so shareholders a tipping in heaps to force growth.

They need to sustainably grow now that they are a $100m+ rev company.

The whole CEO thing- what an absolute disaster. Hard to have confidence eh.

On my watchlist

I have watched from a distance for some years.
Always looks interesting.
Perhaps one day.

[LaserEyeKiwi]

The way this company is going, seems like this will be a record time for a company to be added and then removed from the NZX50 index, its well below the minimum market cap level now to remain in the index for long.

[BlackPeter]

The way this company is going, seems like this will be a record time for a company to be added and then removed from the NZX50 index, its well below the minimum market cap level now to remain in the index for long.

What a sad chart ... listed 8 years ago for more than twice the current SP. Did they ever pay divvies? Probably not - remember, this is one of those high tech startups - big promises and just growing a bit slow (I mean the earnings, not the promises)!

ERDchart.JPG

But hey - one can get now the same share which was valued one year ago still at $6.70 for only $1.50. This must be a bargain, isn't it?

Sadly though - poor past performance is not necessarily a guarantee for future wealth, but what is certain: The loss per share purchased today will be smaller than the loss per share bought in July 2021. And hey, maybe the goddess of luck might start to smile at ERD ... who knows?

[BlackPeter]

Interesting article in the herald (paywalled):

https://www.nzherald.co.nz/business/...2QZK5AUL3QDTM/

"We were focusing less on hardware and more on services. We slowed down our hardware journey. We probably didn't invest as much there from 2017 to 2019 as we should have. We got off the pace a bit and that slowed down our sales."

It pitches the Coretex deal as the solution.

Appears like new boss sees selling more hardware (vs solutions) as the remedy to ERD's woes.

While I wish them good luck - I am quite happy that its not my money he is investing against conventional wisdom ...

[Rawz]

All those poor sales updates in USA which was blamed on covid. I questioned the excuse at the time.. turns out they are running old tech! Nobody wants old tech

[Charlie]

Director buys $52000 of shares on 30 June around $1.48, and it goes up by over 30 % in a bit over a week . I bought back in at $1.80, last week , not sure if I should sell the gain of 20% or just wait .
Looks like most posts recently have been a bit negative, with good reason , so will watch carefully.
http://nzx-prod-s7fsd7f98s.s3-websit...973/374250.pdf

[sb9]

Director buys $52000 of shares on 30 June around $1.48, and it goes up by over 30 % in a bit over a week . I bought back in at $1.80, last week , not sure if I should sell the gain of 20% or just wait .
Looks like most posts recently have been a bit negative, with good reason , so will watch carefully.
http://nzx-prod-s7fsd7f98s.s3-websit...973/374250.pdf

Up another 20c or so today. If I were you, I may take some profits purely based on current market trend, just my opinion though..
Disc - used to be holder, sold couple of years back for decent profit..