FY19 results were ahead of UBS estimates. The quality was below expectations, although the outlook is considered positive.
UBS calculates TechnologyOne will have to reduce its FY20 operating expenditure by -5% in order to achieve 10% pre-tax profit growth.
This is based on FY20 estimated revenue growth of 6%. UBS maintains a Sell rating. Target is raised to $7.25 from $7.00.
Sector: Software & Services.
Target price is $7.25.Current Price is $8.72. Difference: ($1.47) – (brackets indicate current price is over target). If TNE meets the UBS target it will return approximately -20% (excluding dividends, fees and charges – negative figures indicate an expected loss).