#1 UK Growth Stock Just Exploded !!!!

Summary

In this video, the presenter discusses a UK growth stock, Audio Boom, which has been performing well following a positive trading update. The stock surged after a major dip, reflecting the volatility in the UK market. The presenter highlights the company's impressive revenue growth and profitability, with notable gains in Q4 and projections for 2025. Despite concerns from platforms like Stockopedia, the presenter remains confident in Audio Boom's future, emphasizing its scaling profitability and improved contract situation. Viewers are encouraged to invest in the company as its prospects continue to improve.

Takeaways

• 😀 The UK inflation rate has decreased to 2.5%, potentially leading to interest rate cuts, which could boost the UK market.
• 😀 JD Sports' stock saw a significant dip due to a profit warning but was considered an overreaction by the presenter. The stock has since recovered.
• 😀 The presenter bought JD Sports on the dip, and it has now improved, highlighting the value of buying during market downturns.
• 😀 AudioBoom, a UK growth stock, has performed exceptionally well, increasing in market cap from £45 million to £71 million in a short period.
• 😀 The presenter increased their position in AudioBoom when its stock dropped, citing a 'stupid move' in the market.
• 😀 AudioBoom's trading update was very positive, including a 133% annual revenue growth and a 3.4 million profit ahead of expectations.
• 😀 AudioBoom's adjusted earnings showed significant improvement, with Q4 generating a profit of 2.1 million, compared to a loss last year.
• 😀 The company has eliminated loss-making contracts, contributing to a surge in profitability, and expects record revenue in 2025.
• 😀 The stock's negative movement after the trading update was deemed unreasonable, as the company showed strong growth and positive prospects.
• 😀 Despite some analysts, like Stockopedia, giving it an Amber/Red rating, the presenter believes AudioBoom's profitability is on a strong upward trajectory and will outperform expectations.

Q & A

What is the current inflation rate in the UK, and what does it imply for the economy?

The UK inflation rate is currently 2.5%. This could potentially lead to a rate cut, which would be beneficial for the UK markets, as lower inflation could foster economic confidence and support stock growth.

How does the current economic situation in the UK compare to that of the US?

The US economy is performing better, with inflation data showing improvement, although still relatively high. The UK's economy is weaker, and as a result, there is more pressure on the UK to implement rate cuts.

What happened to JD Sports' stock, and how did the speaker respond to it?

JD Sports' stock experienced a major dip, with a 12% drop at opening, following a profit warning. The speaker bought into the dip, believing the drop was exaggerated, and the stock quickly recovered, only being down 3% later.

What significant action did JD Sports' CEO take during the stock dip?

The CEO of JD Sports bought around £100K worth of shares during the dip, signaling confidence in the company's future prospects.

What are the key highlights from the trading update of AudioBoom?

AudioBoom reported a 133% annual revenue growth, exceeding expectations. They also showed improved profitability with a significant increase in adjusted EBITDA and strong performance in Q4 of 2024.

How did the stock price of AudioBoom behave after the trading update?

After the positive trading update, AudioBoom's stock initially dropped, but the speaker saw this as an opportunity and bought more shares. The stock quickly rebounded, rising by 8% from the lows.

What is the expected outlook for AudioBoom in 2025?

AudioBoom expects significant growth in 2025, with booked revenue of over £54 million already secured. The company anticipates a record-breaking profit, driven by improved advertising rates, the removal of loss-making contracts, and a more profitable second half of the year.

What was the main issue AudioBoom faced with its contracts in the past, and how is it being addressed?

AudioBoom had made overly generous contracts with creators during the pandemic, offering minimum guarantees that turned out to be loss-making. As these contracts expire, profitability is expected to improve significantly.

Why does the speaker disagree with Stockopedia's assessment of AudioBoom?

The speaker disagrees with Stockopedia's negative view of AudioBoom, as the company is now profitable, growing rapidly, and shedding loss-making contracts. The speaker believes the stock's valuation is set to improve significantly as profitability continues to scale.

What are the growth projections for AudioBoom in terms of revenue and profitability?

The speaker forecasts 10-20% revenue growth for AudioBoom, with a potential increase in profit margins as the company continues to scale and benefits from higher ad rates. The speaker believes the company's profitability will rise considerably over the next few years.