Below we discuss two Asx Tech Stocks amidst the prevailing tech boom scenario. While one of these is over its 52-week low level and the other nearing 52-week high level, the insights depict which one looks to be an option to consider for investment scenario in view of the trading levels and future momentum.
ASX Tech Stocks in discussion -
Technology One Limited
Expecting Strong Profit Growth for Full Year: Technology One Limited’s (ASX: TNE) stock tumbled 14.95 per cent in the past one-month post announcement of first-half year result wherein the market was expecting better earnings growth. Net profit grew by 1% and amounted to $8.1 Mn in 1HFY18 as compared to previous corresponding period. As a result, basic EPS came at 2.57 cents per share which is similar to the prior corresponding period. However, the group is on track and is expected to deliver a profit growth in the range of 10% to 15% for the full year as per its standard profit at the back of robust SaaS business and continuing growth in Licences Fees expected in the second half. Further, the company focuses on to continue developing its Mass Production SaaS platform and expects $7 million profit in 2018. It has recently inked a new seven-year SaaS deal with Victoria University, representing the demand into the market.
On the other hand, the company will soon introduce its next phase of Digital Strategy which is related to mass production SaaS platform and Ci Anywhere technology. This will empower the customers to grasp the digital revolution that is currently gaining momentum. Artificial Intelligence (AI) and Machine Learning (ML) is an integral part of the Digital Strategy.The Group takes the responsibility for building, marketing, selling, implementing, supporting and running its enterprise solution for each customer to guarantee long-term success. This will make the platform ready for the next stage of growth. The current ratio stood at 1.82x in 1HFY18 while the group enjoys its debt-free status. Looking at historical dividend performance, the company will continue to pay dividend to its shareholders. Meanwhile, TNE disclosed to ASX that one of its directors, Jane Elizabeth Andrews had an indirect interest in the company and acquired 2300 more ordinary shares. While TNE stock has fallen 27.4 per cent in the past one year as at June 20, 2018 and is trading close to 52-week lower level, it looks an opportunity to consider.
Growing Total Recurring Revenue to FY22 (Source: Company Reports)
Wisetech Global Limited
Long Term Growth Intact: Wisetech Global Limited’s (ASX: WTC) stock climbed up 5.65 per cent on June 20, 2018 at the back of positive market sentiments as the group continues to improve its yearly revenue growth from over the past five years and recorded revenue growth at a CAGR of 37.5% during FY13-17. Investors are expecting the same trend to be continued in upcoming years. WTC now expects revenue growth of 37%-43%, subject to currency movements. To support its long-term growth, the group has done several valuable acquisitions in France, Belgium, Ireland, Germany, Italy, Turkey, North America, Argentina, the Netherlands, Brazil, Uruguay, Taiwan, and Australasia.
Recently, the group has acquired Fenix Data Systems, a Canadian customs management solutions provider. The purchase cost is an initial $2.5 million, with future multi-year earn-outs of up to $0.8 million which relates to integration and revenue performance. Moreover, the group has signed another lucrative takeover agreement with the transportation management system (TMS) vendor SaaS Transportation Inc. with the objective of expanding its market share of the U.S. less-than-truckload (LTL) shipping sector. SaaS Transportation and Fenix Data Systems are expected to be consolidated into WiseTech Global accounts from July 2018, and are expected to support long-term organic growth. The group has now snapped up Pierbridge, which is a parcel shipping TMS provider in the US. Meanwhile, the stock price has risen 56.27 per cent in the past three months and WTC is trading close to 52-week high level, and looks touch expensive.
