There are a number of companies in the tech sector that are growing at a strong rate currently
Two that you might want to get better acquainted with are listed below. Here's what you need to know about them:
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ELMO Software Ltd (ASX: ELO)
The first ASX tech share to look at is ELMO. It provides a cloud-based human resources and payroll software platform that streamlines a number of important business processes such as employee administration, remuneration, and payroll.
ELMO has been a strong performer once again in FY 2021. Last month it released its half year results and revealed a 42.8% increase in annualised recurring revenue (ARR) to a record $74.2 million. This was driven by a combination of organic growth and the benefits of acquisitions.
Morgan Stanley is positive on the company's growth prospects. It currently has an overweight rating and $9.70 price target on its shares. This compares to the latest ELMO share price of $5.12.
Megaport Ltd (ASX: MP1)
Another ASX tech share to look at is Megaport. It is a provider of elastic interconnection services across data centres globally.
Megaport has been benefiting greatly from the shift to the cloud over the last few years. Pleasingly, this has continued in FY 2021 with the company recently reporting Monthly Recurring Revenue (MRR) growth of 37% to $6.3 million at the end of the first half. If you annualise this, it works out to be revenue of $75.6 million, which is already 30% higher than FY 2020's revenue of $58 million.
Goldman Sachs is a fan of the company and recently put a buy rating and $15.00 price target on its shares. The broker believes Megaport is well placed for growth thanks to increasing demand for public cloud infrastructure and the broadening of its product suite.
