"NEA delivered a FY20 result (refer to our first take here) we regard as solid given the uncertain macro backdrop and significant restructuring undertaken by NEA (headcount fell 13% in the half). No specific guidance was provided but it was indicated the first seven weeks of FY21 are seeing similar year-on-year growth as that experienced in the same period last year (for context 1H20 ACV growth was +23% yoy even after material churn impacted its growth late in 1H20). Our ACV growth assumptions remain conservative: +18% in FY21E and +20% in FY22E. This compares to NEA’s unchanged medium to long-term growth rate targets of 20-40% beyond an uncertain FY21. NEA forecasts a Net cash position of A$32-35mn in FY21 (GSe A$34.5mn) which should reduce the risk of requiring further capital in the absence of M&A or geographic expansion opportunities."
NEA Price at posting:
$2.37 Sentiment: Buy Disclosure: Held