2 top ASX tech shares rated as buys by brokers

Temple & Webster and FINEOS are two ASX tech shares that brokers like.
The post 2 top ASX tech shares rated as buys by brokers appeared first on The Motley Fool Australia. –

There are some really good ASX tech shares out there that are rated as buys by brokers.

Brokers (hopefully) have a good understanding of the merits of the businesses and have given thought to whether, at the current share price, a business is a buy, hold or sell right now.

These two businesses are ones that brokers think are buys in the technology space at the moment:

FINEOS Corporation Holdings PLC (ASX: FCL)

FINEOS is a software provider for the employee benefits and life, accident and health industry. Its technology aims to improve operational efficiency, increase effectiveness and provide excellent customer care.

The ‘FINEOS AdminSuite’ is designed to manage the modern complex structures and relationships of group and individual insurance processing to optimise the plan, coverage and data management, operational processing and business intelligence.

It’s currently rated as a buy by at least three brokers including Macquarie Group Ltd (ASX: MQG). The price target from Macquarie is $4.63, which suggests a potential upside of around 20% over the next 12 months if the broker is right.

Macquarie believes that FINEOS looks good value when looking at its peers, yet the business continues to make good operational progress. The broker thinks that it has a good future.

The ASX tech share is expecting organic subscription revenue growth of 30% for FY21. Management said this demonstrates strong and consistent software as a service (SaaS) revenue growth. Around 71% of its revenue is cloud-based.

It’s also looking for strategic bolt on acquisitions to enhance the FINEOS platform, such as Spraoi which is a provider of machine learning capabilities for the employee benefits and life industry.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an online furniture and homewares business which sells many thousands of products through its website.

It’s currently rated as a buy by at least two brokers including Morgan Stanley. The broker has a price target on the ASX tech share of $15.

The broker likes the tailwind for the business of the e-commerce growth story. There also continues to be good demand for the products that Temple & Webster sells. Morgan Stanley thinks that Temple & Webster can become much more profitable in the future.

A few months ago, Temple & Webster told the market that it’s going to invest heavily over the next few years to increase its market presence, improve its offering to customers and make the business even more efficient. During this scale-up period, it expects that revenue will increase by “strong double digit” amounts whilst the earnings before interest, tax, depreciation and amortisation (EBITDA) margin would be between 2% to 4%.

But the ASX tech share’s management believes that with scale it can achieve operating leverage and higher levels of profitability. That will include improved supplier terms, more repeat customers which will reduce marketing expenses, a slowing of investment in fixed costs and a higher percentage of exclusive products with higher gross profit margins.

Temple & Webster CEO and co-founder Mark Coulter has said:

You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper.

The post 2 top ASX tech shares rated as buys by brokers appeared first on The Motley Fool Australia.

Should you invest $1,000 in Temple & Webster right now?

Before you consider Temple & Webster, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Temple & Webster wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

These are the 10 most shorted ASX shares

Why is the Temple & Webster (ASX:TPW) share price up over 3% today?
3 ASX shares growing at a rapid rate

Brokers name 3 ASX shares to buy today

3 ASX growth shares named as buys

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FINEOS Corporation Holdings plc. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended FINEOS Corporation Holdings plc and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!