How to use ChatGPT to more accurately forecast financial metrics, page-21

I asked a proper question to Grok - here is the result:

Spenda on ASX has been performing very poorly. What is your outlook on the company?

I assume you're referring to Spenda Limited (ASX:SPX) when you mention "Spenda and ASX," as SPX is the company's ticker on the Australian Securities Exchange (ASX). Let’s break down the situation and provide an outlook based on available insights and reasoning.
Spenda Limited is a technology company focused on providing integrated business solutions, particularly in software-as-a-service (SaaS), payment processing, and lending services. It aims to streamline financial operations for businesses across supply chains. However, its stock performance has indeed been lackluster recently, reflecting broader challenges.

As of March 23, 2025, Spenda’s share price has been volatile but generally trending low. Historically, it has hovered in the penny stock range (below AU$0.01 at times), with occasional spikes driven by market momentum or company announcements. For instance, earlier data from 2024 indicates a 52-week low of AU$0.0055 (June 25, 2024) and a high of AU$0.014 (October 22, 2024), showing significant fluctuation but no sustained upward trajectory. The current price is likely near the lower end of this range, given your comment about poor performance, though I’d need real-time data to confirm the exact figure today.

The company has also been unprofitable, with a reported net income loss of AU$-7.09 million in its last half-year (compared to AU$-6.11 million previously), a 16.10% worsening. Its EBITDA is similarly negative at AU$-7.11 million, with an EBITDA margin of -132.37%, indicating operational inefficiencies or heavy investment without corresponding revenue growth. This financial strain likely contributes to investor skepticism and the stock’s poor performance.
]Factors Influencing Performance

1. [Penny stocks like SPX are highly sensitive to market sentiment. Despite occasional mentions of “500%+ ROI potential” from speculative trading sources (e.g., TradingView), the lack of consistent growth suggests these are more hype-driven than fundamentally supported.Spenda operates in a competitive space—SaaS and payments—dominated by larger players like Xero, Square, or Tyro Payments. Its value proposition (streamlining B2B payments and lending) is compelling, but execution and market penetration seem limited, possibly due to scale or customer acquisition costs.
2. Negative margins and increasing losses indicate that Spenda is spending heavily—likely on development or marketing—without generating sufficient revenue. This is common for growth-stage tech firms, but prolonged losses erode investor confidence.Recent developments, such as a 10-year service agreement with Capricorn (a cooperative of automotive businesses) or the Limepay deal boosting payment processing to $167 million annually, show potential. However, these haven’t yet translated into profitability or stock price stability, suggesting either slow rollout or insufficient scale to offset costs.

The outlook for Spenda (ASX:SPX) is cautiously mixed, leaning toward continued challenges in the short term but with some long-term potential if key risks are addressed.Without a clear path to profitability, the stock will struggle to attract sustained investment. Negative earnings and cash flow make it a risky bet, especially in a market favoring stability amid global economic uncertainty.

• Spenda’s niche is crowded, and it lacks the brand recognition or resources of bigger competitors. This could cap its growth unless it carves out a distinct edge.
• s a micro-cap stock (market cap around AU$41.5 million as of mid-2024), SPX is prone to sharp swings, making it more a speculative play than a reliable investment.

• Deals like Capricorn and Lessn (via Limepay) could provide a revenue base if fully leveraged. The Capricorn agreement, in particular, offers a decade-long runway, which is rare for a small tech firm and could stabilize cash flow over time.
• The demand for integrated payment and lending solutions in supply chains is real. If Spenda can execute effectively, it might tap into a growing segment underserved by larger players.[ Some analysts (e.g., RiskMastery on TradingView) have flagged breakout potential if the price holds above certain thresholds (e.g., AU$0.017), though these are speculative and unproven given current fundamentals.

In the near term (next 6-12 months), I expect Spenda to remain under pressure. The financials don’t yet support a turnaround, and broader market conditions—rising interest rates, cautious investors—aren’t favoring unprofitable micro-caps. The stock could linger in its current low range or dip further if sentiment sours or if key deals fail to deliver quick results.Longer term, there’s a glimmer of hope if Spenda can convert its partnerships into meaningful revenue and reduce its burn rate. A shift to profitability or even positive cash flow could spark a re-rating, but that’s likely 2-3 years out and hinges on execution—a big "if" given its track record.For now, it’s a high-risk, high-reward play suited for speculative investors with a high tolerance for volatility, not a safe bet for those seeking steady returns. If you’re holding or considering it, watch for quarterly updates on revenue growth and cost management—those will be the real signals of whether Spenda can turn the corner.

Cheers,

Ballsup - by name and nature, IMO, NFA and as usua NFI