Peaking at just under £30 on September 18, 2018, the Accesso Technology (LSE: ACSO) share price went on to see a steady decline. This was the case until late 2020, when things started to pick up for the AIM-listed company. In the past six months, the share price has increased over 180% and year-to-date prices are up 250%! A year ago the price was almost 223p. It closed Tuesday at 720p. Let’s take a closer look at why.
What is Accesso Technology?
Accesso is a virtual queuing, ticketing, and distribution company. Its solutions operate in theme parks, water parks, cruise lines, museums, and various other attractions. Accesso eliminates the hassle of queuing, instead you get a token that tells you when it’s your turn. Accesso functions at over 1,000 venues in over 30 countries. This is a huge reach to the guest experience and tickets & distributions markets, which are valued at $1.5bn and $1.9bn respectively.
Bull case for Accesso Technology share price
The recent increase in share price can be largely attributed to the recent full-year results issued by Accesso. Revenues of $56.1m exceeded revised projections for 2020 by 3%. This increase in revenue was in the face of multiple worldwide lockdowns. This gives me huge confidence in the company’s direction for 2021.
The firm also announced a stronger liquidity position, with a rise in net cash to $29.7m. This was also backed up by a new three-year debt facility, which will provide $18m of liquidity. This gives the company a strong cash base moving forward.
Most importantly, as lockdown restrictions are lifted, people will want to visit theme parks again. The guest experience industry will thrive as people are allowed to visit their favourite attractions freely again. Accesso’s business model is built on this freedom and will profit directly from this reopening.
Bear case for the share price
The fact that the Accesso Technology share price had been falling since 2018 — before the pandemic shut down the attractions industry — does worry me.
The company was a classic example of an overinflated growth share, I feel. It offered a new, exciting technology that investors flocked to, inflating the price/earnings ratio to 70 at one point. This came at the cost of neglecting some of the shaky fundamentals that began to present themselves in the 2018 annual report. By 2019, cash issues led to the Accesso bubble bursting, sending share prices tumbling. If shaky management happened once, who’s to say it won’t happen again?
There’s also the problem that the pandemic still exists. Although vaccines are being rolled out, there are some concerns about the AstraZeneca vaccine’s safety that have impacted the rollout in some countries. And distribution globally for all vaccines remains patchy. This could halt the opening of the public attractions that drive Accesso’s business.
But I believe the Accesso Technology share price will continue to rise throughout 2021 as much of its business reopens, even if not as fast as it has done. The firm has also strengthened its balance sheet throughout 2020, learning from previous mistakes. There are still risks to consider, but I think the worst is behind this company. Therefore, I could see this stock being a solid addition to my portfolio.
Markets around the world are reeling from the coronavirus pandemic…
And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.
Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…
You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.
That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.
Dylan Hood owns AstraZeneca shares. The Motley Fool UK has recommended Accesso Technology. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.