What is Happening to the Share Price of Technology One Ltd?

What does Technology One Ltd do?

Technology One Ltd [ASX:TNE] is an enterprise software company. Over 1,000 companies, government departments and statutory authorities are powered by their software across a range of key sectors, such as utilities, financial services, education, health and community services.

What’s happening to the TNE share price?

Good revenue results are driving the share price higher. The company released their full year results on 24 November, that’s for the year ending 30 September.

The results exceeded market guidance for profit growth. Net profit before tax was up 16% to $46.5 million.

Technology One attributed record revenues to an increase in licence fees. Added to that was strong growth in its cloud business, which increased by 200%

Chief executive Adrian Di Marco expects the business to double its annual turnover in the next four to five years, that’s on the expectations of more strong growth in its cloud division.

The cloud offering has been a big investment for Technology One. It’s losing money in these early stages, but revenues are growing and the division is expected to be profitable next year.

What now for TNE shares?

The company continues to attract customers. There were 49 new customers for the financial year, including such large enterprises as the Australian Bureau of Statistics, Department of Treasury, Brisbane and Wellington City Councils, and other large organisations. These sort of signings suggests their product is a good one.

The company is also big on plowing revenue back into its research and development, much more than the industry average.

The company has $75 million in cash and little debt, so the fundamentals look solid. Of course, all that fundamental information is in the chart, if you know how to read it. If you want to know how to start reading individual companies through the charts, go here to find out more.

Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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