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Topline Capital Management, LLC, along with its managing member Collin McBirney, has significantly increased its holdings in NerdWallet, Inc. (NASDAQ:NRDS). According to a recent SEC filing, the investment firm acquired a total of 461,777 shares of NerdWallet's common stock over two days, October 21 and October 22. The purchases were made at prices ranging from $11.35 to $12.05 per share, amounting to a total investment of approximately $5.28 million.
The acquisitions, executed through Topline Capital Partners, LP, reflect an increased commitment to NerdWallet, a company known for its financial guidance services. Following these transactions, Topline Capital Management and McBirney now hold a substantial position in the company, with 5,251,145 shares owned indirectly through the partnership.
These transactions underscore Topline's confidence in NerdWallet's business prospects, as the firm continues to expand its stake in the financial services company.
In other recent news, NerdWallet Inc. has reported a 5% year-over-year increase in revenue, hitting $151 million in the second quarter of 2024. The company's insurance business significantly contributed to this growth, reporting a substantial 196% increase in revenue. Amid these developments, NerdWallet has also announced an amendment to its credit agreement with JPMorgan Chase (NYSE:JPM) Bank, enabling the company to invest up to $15 million annually in unrestricted subsidiaries.
Simultaneously, the company has initiated a new $50 million stock buyback program, replacing the previous $30 million program. In light of recent market challenges, including changes in Google (NASDAQ:GOOGL)'s algorithms affecting its organic traffic, NerdWallet has increased its performance marketing expenditure. Truist Securities, after reviewing these developments, revised its price target for NerdWallet from $19.00 to $16.00, while maintaining a Buy rating.
Furthermore, NerdWallet announced the promotion of Samuel Yount to Chief Business Officer. These are recent developments that reflect the company's ongoing efforts to manage capital, return value to shareholders, and navigate market adversities.
InvestingPro Insights
Topline Capital Management's recent investment in NerdWallet aligns with several promising indicators highlighted by InvestingPro. Despite the stock's recent volatility, with InvestingPro Tips noting that it "has taken a big hit over the last week" and "fared poorly over the last month," there are signs of potential upside.
One key InvestingPro Tip suggests that "net income is expected to grow this year," which could explain Topline's increased stake. This optimism is further supported by analysts' predictions that "the company will be profitable this year," according to another InvestingPro Tip.
The company's financial health appears solid, with InvestingPro Data showing a revenue of $599 million for the last twelve months as of Q2 2023. Additionally, NerdWallet boasts a strong gross profit margin of 90.62% for the same period, indicating efficient cost management.
While the stock has experienced a 31.17% decline over the past three months, it's worth noting that the 1-year price total return stands at an impressive 52.21%. This long-term performance may have factored into Topline's decision to increase its holdings.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for NerdWallet, providing deeper insights into the company's financial outlook and market position.
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