A top broker has given its verdict on the Bravura share price…
The post Broker says Bravura (ASX:BVS) share price selloff is a buying opportunity appeared first on The Motley Fool Australia. –
It certainly has been a disappointing week for the Bravura Solutions Ltd (ASX: BVS) share price.
Since this time last week, the financial technology company’s shares have lost 19% of their value.
This means the Bravura share price has given back all its 2021 gains and a touch more.
Why is the Bravura share price falling heavily this week?
Investors have been selling down the Bravura share price this week following the release of its full year results.
Although the company delivered a result largely in line with expectations, its guidance was modestly lower than consensus estimates.
Though, perhaps the biggest drag on the Bravura share price was the surprise and sudden (next week) departure of its CEO, Tony Klim, after a decade at the helm.
Is this a buying opportunity for investors?
According to a note out of Goldman Sachs, its analysts believe the weakness in the Bravura share price is a buying opportunity.
This morning the broker retained its buy rating but trimmed its price target slightly to $3.70.
Based on the latest Bravura share price of $3.10, this implies potential upside of 19% over the next 12 months.
What did the broker say?
Goldman believes the post-results selloff has been overdone and feels it has left the Bravura share price trading at a very attractive level. The broker also has confidence in the company’s new CEO, Nick Parsons, who has been with the company for 14 years.
Goldman said: “BVS has guided to solid mid-teen FY22 NPAT growth; seasonality should be slightly 2H weighted but far less pronounced than FY21. In our view the share price reaction today (-16%) may be overdone. The mid-point of guidance implies only 2% downgrade to consensus NPAT (Bloomberg); we downgrade our FY22/FY23E EPS by -1.9%/-5.5%.”
“The departure of CEO Mr. Tony Klim may have come as a surprise; he has been CEO for 10 years and has been replaced by Mr. Nick Parsons. Mr. Parsons has been with BVS since 2007, appointed as CTO. He has undertaken a range of senior leadership roles in the business, most recently as Global COO.”
“Our updated forecasts imply +12% 3-yr EPS CAGR. The stock is trading at a 29% discount to the FY22 Small Industrials Index, which we think makes the stock a compelling investment in the current environment,” it concluded.
Overall, this could make it worth considering when the market reopens on Friday.
Should you invest $1,000 in Bravura right now?
Before you consider Bravura, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bravura wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.