Buy now, pay later (BNPL) shares have stolen the limelight from the ASX tech sector. BNPL shares have become increasingly challenging to buy as valuations continue to be stretched. With reporting season around the corner, here are 4 ASX tech shares with reasonable valuations and strong growth portfolios.
1. Data#3 Ltd (ASX: DTL)
Data3 delivers an integrated array of solutions spanning cloud, modern workplace, security, data and analytics, and connectivity. These technology solutions are delivered by combining its services across consulting, project services and support services.
On 16 July, the company advised that, subject to finalisation of its group year-end audit, its consolidated net profit before tax for FY20 is estimated to be approximately $34 million. This represents an increase of 28% compared to its previous record FY19 result.
2. Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a global leader in sales enablement software, which allows organisations to increase sales win rates, reduce expenditure and improve customer satisfaction. In its equity capital raising presentation back in May, the company cited that its customer cash receipts increased 178% to $14.9 million from the March 2019 quarter of $5.4 million. This growth was driven by significant new wins with a number of Fortune 500 companies.
I believe Bigtincan represents a more volatile opportunity that could deliver some explosive growth in the medium-long term. For investors looking for a slightly speculative opportunity, this could be the ASX tech share to add to your watchlist.
3. Rhipe Ltd (ASX: RHP)
Rhipe provides licensing, business development and knowledge services that support its customers’ adoption of cloud technologies. Its vendors – such as Microsoft, VMWare and Citrix – all rely on Rhipe’s platform to build, grow and support the consumption of their cloud license programs.
On 17 April, the company provided a trading update highlighting its unaudited trading results for the nine months to 31 March 2020. During this period, the company delivered a 32% increase in sales and 19% increase in revenue. Following this announcement, Rhipe initiated a $34 million capital raising to allow it to pursue acquisitions that are complementary to its existing cloud software subscription business. I believe Rhipe has demonstrated fair growth and is now in a strong cash position to explore opportunities to accelerate its growth moving forward.
4. Dicker Data Ltd (ASX: DDR)
Dicker Data is a value added distributor of hardware, software, cloud and emerging technologies in Australia. In the company’s market update announced on 23 July, it outlined the recent surge in remote work has seen a strong demand for remote and virtual working solutions across its hardware and software portfolios.
The company provided unaudited half year results that saw its total revenue increase 18.1% and net profit after tax up 23.5%. Dicker is one of the few ASX tech shares that do not trade at an outrageous valuation. At today’s prices, its price-to-earnings ratio is just 21. I believe the company represents good value and further sales tailwinds can be expected.
These 3 stocks could be the next big movers in 2020
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended BIGTINCAN FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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