Brokers rate these 3 ASX tech shares as a Buy

Brokers have run the ruler over which ASX tech shares are a 'Buy' after they took a beating in the last month. Here's the lowdown.

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Big brokers have run the ruler over ASX tech shares after their recent selloff. Here are three that were rated as a buy on Thursday 11 March. 

1. Hansen Technologies Limited (ASX: HSN)

The Hansen share price surged ~20% on Wednesday after the company announced a significant new contract with Telefónica Germany. The agreement is for a fixed initial term of five years and is expected to generate approximately $25 million in revenue. 

Ord Minnett believes this important contract improves Hansen's organic growth outlook and ability to attract new clients. The deal will also provide a nice lift in FY21 earnings.

The broker rates Hansen as a buy with a $6.00 share price target. This represents a 10.5% premium to the $5.43 at which the Hansen share price closed Thursday's session.

2. Iress Ltd (ASX: IRE

The Iress share price has likely been dragged down by the broader weakness in ASX tech shares, stumbling by 12% year to date. The financial software provider has generated relatively stable earnings for the past decade, albeit with not much growth.

Credit Suisse upgraded Iress to outperform on the basis of its recent share price drop. The broker views the company as one that is more defensible with a solid recurring revenue base. It also noted that, at current share price levels, the company offers a dividend yield of ~4.90%.

The broker believes such a yield is attractive in the current environment. Credit Suisse has an $11.00 price target which represents an upside of 17% on the current Iress share price, excluding dividends. 

3. Nearmap Ltd (ASX: NEA

The Nearmap share price came under significant selling pressure on 11 February after the release of a short-seller report by Hong Kong-based J Capital Research

The report alleged a number of challenges for Nearmap including a struggling US division, clients dropping the service and weak client churn figures. 

Nearmap has since replied to the short report, claiming, "The report contains many inaccurate statements and makes unsubstantiated allegations of a very serious nature". While the company has made an attempt to quash the allegations, the Nearmap share price has slumped to near 11-month lows in recent days. 

Citi retained a buy rating for Nearmap shares with a $3.10 share price target, around 48% higher than the current Nearmap share price. But the broker's commentary was far more neutral and reserved in nature.

It noted that Nearmap competitor Aerometrex Ltd (ASX: AMX) was seeing rising traction with enterprise customers. The broker noted that competition remains a risk and ANZ forecasts could come in at below-trend growth in the near term. 

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hansen Technologies and Nearmap Ltd. The Motley Fool Australia has recommended Hansen Technologies, IRESS Limited, and Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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