Morningstar analysts have uplifted the fair value estimate for software-as-a-service company TechnologyOne (ASX:TNE) by 25%, pushing it to A$14.00 per share.
The decision cites the company’s robust public-sector customer base, alongside high customer retention rates, as the driving factors.
The brokerage anticipates TechnologyOne’s revenue to surge at a compound annual growth rate of 10%, with its EBIT margin expected to increase from 31% in the fiscal year 2022 to 37% in the fiscal year 2032.
The analysis also points to the company’s long-term growth being propelled by the increased advancement and adoption of its products, notably within the local government and education sectors in Australia and New Zealand.
TechnologyOne’s stocks have been given ‘buy’ or higher ratings by five out of thirteen analysts, with six advising a hold and two suggesting a sell or lower, according to LSEG Data.
The company’s stock has seen a rise of 16.1% year-to-date, as of the most recent closing figures.
TechnologyOne is a software-as-a-service company with a strong customer base primarily in the public sector and education industries.