Raiz today released their Raiz Q4 Results, announcing record revenues and smashing expectations with funds under management up 78% Year on Year.
We first covered Raiz Stock back in early July and were Bullish on the stock: Link
RAIZ Q4: RZI Stock Summary
Raiz operates in the micro-investing space, allowing users to get started investing with very little starting capital. We have covered the company many times in previous articles and are a big fan of the company creating opportunities for smaller investors.
Raiz makes money by holding client’s funds (Funds Under Management) and charging a fee on the holdings (at the time of writing $2.95/month). There are also other minor revenue streams such as Raiz rewards and Raiz Home-loans which bring in affiliate revenue for the business.
Raiz recently announced the inclusion of Cryptocurrencies into their sapphire portfolio. This sapphire portfolio allows ASX: RZI to charge additional fee’s on the FUM to the users.
The company (ASX: RZI) is Australia’s largest mobile first financial services platform and is only challenged in our opinion by Commsec Pocket.
The company in their Q4 Results announcement provided an overview of the source of their revenues, of which the majority comes from the maintenance fee.
Raiz Q4 Results Announcement
ASX: RZI today announced their FY2021 Q4 results to the market. Funds under management increased 8.9% to $799 million. The share price is currently up 7.69% to $1.68 at the time of writing.
From the chart below you can typically see a strong correlation between the funds under management and the RZI Stock price. As Raiz Q4 Results have increased FUMS by 8.9% this seems to be a fair uptick in the companies share price.
Raiz’s also once again flagged the importance of their recent acquisition of SuperEstate to further accelerate the growth in the Australian Market. It’s interesting as this business includes a niche integrated superannuation and Australian residential property investment platform. Raiz in the previous interview’s with the founder George Lucas has also alluded to the potential to maybe someday allow property investment through the Raiz Platform.
The company also seems to be making headwinds into the Malaysian and Indonesian market with Active Customers growing by 17.2% and 19.6% respectively.
Highlights from the Raiz Q4 Results FY2021 announcement:
- Raiz achieved record Global Active Customers, and Funds Under Management (FUM) for the quarter
- Record revenue in Q4 FY21 with total normalised revenue for Raiz platform up 76.7% year on year (YoY) to $3.6 million
- Global Active Customers up 86.7% YoY to 456,927
- Australian FUM up 76.3% YoY to $799.6 million
- Superannuation FUM up 53.0% YoY to $106.6 million
- Continued strong growth across Indonesia and Malaysia despite challenges caused by the Covid-19 pandemic
- The operational cashflow was $481,000 (positive) in Q4 FY21 and the Australian business’s operational cashflow was $1,402,000 (positive)
- Agreed to acquire Superestate, which will provide Raiz with the capability to offer residential property as an asset class both inside and outside of superannuation
- Raised $10.4 million via an institutional Placement and Share Purchase Plan
- As of 30 June 2021, Raiz has a strong balance sheet with cash, cash equivalents and term deposits totalling $19.4 million
ASX:RZI Share Price
At the time of writing the Raiz, Stock Price is up 7.69% to $1.68. The company has a market capitalization of $127million.
Investors seem to be pleased with the progress the company is making in Australia and overseas.
What Does Raiz ASX Q4 Results Mean for Investors?
With the companies latest announcement putting the company on the verge of offering a positive PE for the first time. This may start to jump up on additional analyst stock screeners in the future.
We will be monitoring user growth and funds under management very closely as in our opinion these are the key performance indicators for this business.
With the company recently raising nearly $10.4 million in an institutional placement and share purchase plan we are excited to see how ASX:RZI decide to deploy these funds and whether they can generate a decent return on capital for investors.
RZI Future Earnings Outlook and Fundamentals
The Q4 Results look very promising and if Raiz Stock can continue to deliver record FUM and user growth we can see the stock price going much higher. We will continue to monitor these key performance indicators.
Raiz currently trades on a negative EPS, price to sales of 3.69, and a price to book ratio of 1.36. The gross profit margin currently sits around 76%.
Summary of RAIZ Q4 2021 Results
RZI shares have performed quite well over the past year with shares up nearly 160% YoY. Given the companies last set of performance figures, we see no sign of a slowdown in uptake of investors entering the platform and no reason why FUM will not continue to increase.
The southeast Asian projects are also in their infancy and this is a massively growing market for investors.
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