Prosus — Stock Performance, Technical View & Future Expectations

Let’s check out the recent performance & future expectations of Prosus. The stock dropped deeply in the first months of 2022. However, the rebound of Prosus was firm and sharp as the prices went up by 80% in the next 4 months. But as it sometimes happens, the illustrious recovery afterwards ended and the stock got stuck in a downtrend for another 4 months. Additionally, Prosus terminated the potential firm’s greatest-ever merge, which caused disquiet among investors. What will happen with the company now?

Recent Performance

Prosus NV reported full-year earnings results as of March 31, 2022. The company has an excellent five-year sales raise trend. Here are some brief financial results:

Revenue: $35.6 billion — up 24% year-over-year

•   Ecommerce: $9.8 billion — 51% up

•   Food Delivery: $3 billion — 77% up

•   PayU: $796 million — 45% up

         Net Margin: 272.84%

         Gross Profit: $2.06 billion — up 24% year-over-year

This company looks like the silver lining. However, reports were brought up in March; hence the numbers may have changed during the current economic situation. Nonetheless, published results look good. The revenue rose, net margin is sky-high and the gross profit almost over 25% year-over-year higher.

It would be tough to bring down a company like Prosus. As mentioned before, the firm was delivering continuous revenue increase the past five years. For the vast majority of companies out there, COVID-19 hit hard. But as one of the businesses of Prosus is Payments & Fintech, the lockdown most probably helped the gains.

Another thing worth mentioning is the portfolio diversification. Prosus operates mainly on internet platforms. And the possibilities in the segment of internet business are limitless. The wide range of engagement area goes from food delivery to, for instance, ventures and health.

Stock Technical View

The stock bearing the PRX ticker is publicly traded on EURONEXT Amsterdam. Right now, price is oscillating somewhere between $52 and $55 per share and we witnessed a super-recent 10% drop, but we will get to that later. The stock had a great — almost exponential upward movement since June, which ended up even breaking the resistance in the middle. The beginning of July discontinued the upward run and bears started beating the bulls, forming the recent downtrend.

Additionally, there was a great drop during February, and the revealed financial results most likely calmed investors at least a little. Macroeconomic insecurity has influenced every stock. Inflation and almost ridiculous prices of commodities and daily stuff do not please nor motivate people to buy more stocks. Actually, it’s quite the opposite.

As far as the previously mentioned super-recent drop is concerned, Prosus walked away from its $4.2 billion acquisition of India’s company called BillDesk. The deal was announced in August last year, and the biggest takeover in the history of Prosus was about to happen in the future. However, due to the unmet conditions, that according to the Prosus’ spokeswoman couldn’t be specified, the deal went off the table.

Prosus’ Future

According to the , the overall consensus of most analysts indicates that the stock will outperform. The price target in the next 12 months aims high and its average may be around 60% upside, with the neutral price scenario on the level of approximately $87 per share. The optimistic scenario aims at $110. Additionally, according to analysts, the stock wouldn’t most probably be stuck in the current downtrend for much longer, and is therefore likely to thrive in the following months.

Another great sphere of Prosus’ portfolio is its venture business. Venture business may be a great opportunity for a capital increase. Nevertheless, you need the crucial know-how and to have a special business sense. It might be a great opportunity for Prosus, as it invests only in businesses which operate in the same field as they do. And according to the data mentioned, Prosus knows what it’s doing.

Even if everything might look splendid for Prosus, the economic crisis is still pulling strings, and no one knows what happens next. For instance, Dow Jones is now officially in bear market and who knows what will come after that.

Will Prosus be the shining star? What might be the long-term consequences of the agreement termination with BillDesk in regard to Indian investors?

Tradematics, Andy