NetDimensions Holdings Ltd. fell the most since July as the publisher of educational software posted a wider loss, even as Panmure Gordon & Co. said momentum in revenue growth means investors should buy the shares.
The adjusted first-half loss before tax widened to $2.7 million from $100,000 a year earlier, the company said today in a statement. The shares fell 5.7 percent to 58.50 pence in London trading, the biggest drop since July 4. The volume traded was more than eight times the three-month daily average.
NetDimensions, based in Wan Chai, Hong Kong, plans to become the leading provider of software for talent management solutions and related compliance within highly regulated industries. In May, the company outlined investment plans to grow the business that included a target to generate $50 million in annual revenue in five years.
“The results illustrate early success with the ‘$50 million in five years’ plan,” George O’Connor, an analyst at Panmure Gordon in London, wrote in a note to clients. “We expect the momentum to continue.”
O’Connor maintained a buy rating on the stock and raised his 12-month price target to 132 pence from 125 pence. “This is a high-growth global market,” he said.
The adjusted loss before tax of $2.7 million beat Panmure Gordon’s estimate of a $4.5 million loss. O’Connor raised his estimate for earnings before interest, taxes, depreciation and amortization by $500,000 for this year and lowered it by the same amount in 2014.
Revenue of $6.5 million was the company’s best first-half performance, Chairman Roger Durn said today in a statement.
Earlier this month NetDimensions agreed a $5 million finance facility with Silicon Valley Bank to fund acquisitions, Durn said.