Why is the GetSwift Share Price Up 170% in Two Months?

GetSwift Share Price
Why is the GetSwift Share Price Up 170% in Two Months?

Let’s begin with a 30,000-foot view…

GetSwift Ltd [ASX:GSW] is a software company that specialises in logistics and delivery.

It does this through its cloud-based Software-as-a-Service (SaaS) platform.

The company generates revenue from a subscription based business model.

GetSwift basically fast tracks delivery services by optimising the dispatch channel.

I guess you could say customers get their things swiftly…

Yep, that pun was intended!

Let’s continue…

The company operates in six continents across 75 industries.

It has clients like fast food chain Red Rooster, which we’re all familiar with. It also has smaller companies you may not know, like a firm called HERB.

HERB is a US company that joined GetSwift to deliver cannabis products directly to consumers.

HERB has been able to use GetSwift to help scale their business and bring on more customers.

That’s the compelling proposition for clients and part of GetSwift’s appeal.

You now have an idea on what GetSwift is.

Let’s move on and look at why the GetSwift share price is rising…

GetSwift: Winning contracts

A SaaS company that helps businesses deliver more may not sound exciting.

But Getswift has had a good run lately. Let’s look at their contract wins and how that’s played out recently…

Who knows? It could signal more success to come…

I’ve marked a handful of investor updates on the chart below:

GetSwift Share Price Chart

Source: TradingView

First up, to the left is the appointment of Stanley Pierre-Louis.

GetSwift has had a myriad of regulatory problems since the share price peaked in late 2017.

It fell from $4 to 15 cents at one point. His appointment may have marked the beginning of the market’s improved view of the stock.

Now for the contract win.

On 30 August, GetSwift announced a new agreement with Master IT Services company Heineken International B.V.

While the value of the agreement cannot yet be determined, it’s a contract win and the market liked it.

The next win was with Heineken again, but this time the contract extended to the Philippines.

You can see GetSwift brings global potential.

The company will be deploying its services to the Philippines Heineken International B.V. and this may create additional contracts in the future.

Again, the market ran the stock higher on this announcement. That’s usually positive to see.

In September, GetSwift notified investors it had secured an agreement which will extend the company’s services to Pizza Hut in Saudi Arabia.

It will no doubt be positive for the GetSwift share price if it can secure more agreements like this.

On 26 September, GetSwift secured a new subscriber agreement with Royal Crest Dairy, Inc.

GetSwift sold down along with the rest of the market, so the effect of this agreement may not be reflected in the current price.

But think a little long term…

GetSwift signed a Teaming Agreement with a company called Patriot Defense Group LLC.

That’s a US-based firm that supplies training and evaluation services to the US Special Operations Forces and intelligence communities.

The market reacted positively and the GetSwift share price jolted the stock 17% higher on the release of this news.

That’s the power of a positive contract announcement. You should watch for any stock with this kind of potential.

It’s not all fun and games for GetSwift. It runs at negative cash flow. That means it spends more each month than it brings in revenue.

It also has a legal case that won’t be resolved until next year. That adds an element of uncertainty and burns through a lot of money in legal fees.

GetSwift also operates in a competitive field.

However, it appears the market is beginning to price in an improving future for the company after a very dismal 18 months.

As always, this is not a recommendation to buy or sell GSW. It is an update only. I hope you found it useful.

Until next time,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch