In a rocky and volatile trading session, one small-cap is delivering a solid gain for investors today.
That small cap is Tesserent Ltd [ASX:TNT], a $270 million market cap stock that specialises in cybersecurity. The TNT share price is up 10.2% at time of writing.
Tesserent’s latest surge is thanks to the release of its half-year update, showcasing not only some incredible growth, but also positive earnings!
Let’s take a closer look…
500% increase in turnover puts Tesserent in the black (technically)
The standout statistic in Tesserent’s latest update has to be its 500% increase in year-on-year turnover.
This massive uptick in revenue is a huge win for the company, highlighting just how far it has come in the span of just one year. TNT raked in $36.4 million worth of sales for this reporting period, compared to just $6 million this time last year.
Much of this comes down to the strategic acquisitions that Tesserent has made recently. Notably, four key takeovers in the reporting period (the six months to 31 December), and one subsequent takeover in February.
All in all, these acquisitions have clearly helped immensely in improving Tesserent’s top line.
More impressively, though, it has also translated into positive earnings of $1.98 million, which, in turn, has given Tesserent a (reported) net profit of $1.78 million for the six-month period. Another huge turnaround from the $2.28 million net loss the company made in the first half of the last financial year.
However, there is one big caveat to all of this…
The statutory bottom line for Tesserent is actually a $6.1 million loss. This takes into account all the one-off costs, as well as option expenses for staff.
And while these costs may not be ongoing from here on out, investors still need to be aware of it.
So, while this is a promising, up-and-coming stock, don’t get too carried away. TNT still has some hurdles to overcome before it posts its first genuine profit. But it’s certainly a lot closer to that goal than this time last year.
What’s next for Tesserent share price?
Looking ahead, it’s clear Tesserent has big plans for the second half of FY21, including the previously mentioned acquisition.
But management isn’t stopping there.
They’ve got much bigger ambitions, as outlined in the report:
‘Tesserent, through its Cyber 360 strategy, continues to focus on building out a one-stop-shop that provides a complete end-to-end cybersecurity solution for its clients.’
This could turn this tiny cybersecurity small-cap into a much greater force. At least, that’s what it’s clearly hoping for.
And if you’re looking for more tech-based stocks, well, we’ve got you covered. Our latest report delves into the heart of the budding AI sector across the ASX, including our top five picks that could become the next BrainChip.
For more information, and the names of those five stocks, click here.
For Money Morning