TechnologyOne gains as analysts impressed by investor day showing
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The new: TechnologyOne shares gained on the ASX as analysts were left impressed by new ambitions set out by the enterprise software provider at its 2024 investor on Tuesday.
The numbers: Shares climbed 4.9% to $20.54 by 1:40pm AEST.
RBC Capital Markets upgraded its rating on TechnologyOne to 'outperform', bumping its price target from $20 to $24. Wilsons Advisory analysts retained their 'overweight' rating and increased their target price 15% to $22.28.
On Tuesday, TechnologyOne hosted its annual investor day and announced that it will bring forward its $500 million ARR (annual recurring revenue) target and aim for $1 billion ARR by 2030.
The context: RBC analyst Garry Sherriff said that TechnologyOne provided a "detailed and useful investor day experience", with customer presentations and software demonstrations to better understand the company's product set.
RBC's upgrade reflected a "clearer understanding of the product suite, go-to-market and higher outer year estimates", he said.
Wilsons analysts said they have "noticeably higher" confidence in TechnologyOne achieving its medium-term ARR goal early. They noted that the products, markets and capabilities the company has at its disposal over the next five years are more favourable than during the previous period of doubling ARR.
What they said: "Longer term we are more positive on [TechnologyOne's] likely success with a unique and focused strategy," RBC's Sherriff said.
"[TechnologyOne's] power of one (which includes all sales, R&D, implementation, support done in house) and the new SaaS+ selling model where fixed price implementation charges for customers are spread over a four-year period is likely to resonate and gain traction in core verticals."
The source: ASX announcement
