Insights

TechnologyOne share price is a buy ahead of profit growth acceleration: broker

TechnologyOne’s growth has been tipped to accelerate…
The post TechnologyOne share price is a buy ahead of profit growth acceleration: broker appeared first on The Motley Fool Australia. –

The TechnologyOne Ltd (ASX: TNE) share price was a relatively positive performer on Friday.

The enterprise software company’s shares edged 0.4% lower to $10.09.

This was despite the ASX 200 index ending the day down by 1.8%.

Why did the TechnologyOne share price outperform?

The TechnologyOne share price fared better than most on Friday thanks to a bullish broker note out of Bell Potter.

According to the note, the broker has retained its buy rating but trimmed its price target on the company’s shares slightly to $12.50.

Based on the current TechnologyOne share price, this implies potential upside of almost 24% for investors over the next 12 months.

What did the broker say?

Bell Potter highlights that in recent years TechnologyOne has been guiding to annual profit before tax growth of 10% to 15%.

However, it suspects that the company’s profit growth could go up a gear in FY 2023 thanks to widening margins and further solid revenue growth. As a result, it is expecting management’s guidance to be increased to 15% to 20% next year.

Historically Technology One has typically provided guidance of 10-15% PBT growth each year and in many cases it has delivered a result towards the upper end of this range. In our view, however, this could be about to change.

If both these events occur then the PBT growth will likely be >15% and the company may therefore raise its guidance from 10-15% to 15-20% next year.

Pleasingly, the broker doesn’t expect the company’s stronger growth to stop there. Bell Potter is expecting this positive trend to continue in FY 2024 and beyond.

We therefore believe that, if and when the company lifts the guidance to 15-20% PBT growth, this will be maintained for the foreseeable future.

The post TechnologyOne share price is a buy ahead of profit growth acceleration: broker appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of January 12th 2022

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Brokers name 3 ASX shares to buy today
5 things to watch on the ASX 200 on Friday
2 ASX growth shares to buy for when the market rebounds
I think these excellent ASX growth shares are buys for 2022 and beyond
Top ASX dividend shares to buy in June 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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.

  • This field is for validation purposes and should be left unchanged.

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

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

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, 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.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info