Why this small-cap ASX tech share 'stands out' right now: expert

The recently listed technology company reported strong FY22 earnings and revenue growth.

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2022 hasn't been a kind year for most ASX tech shares.

At least, not yet.

Technology companies are often priced with distant future earnings in mind. Meaning they've been particularly vulnerable to rising interest rates, which drive up the present-day cost of investing in those future earnings.

To give you some idea of the headwinds facing ASX tech shares this year, the S&P/ASX All Technology Index (ASX: XTX) is down 31% since the opening bell on 4 January. That's far steeper than the 11% loss posted by the All Ordinaries Index (ASX: XAO).

But not all technology stocks have lost ground in 2022.

Share price up on revenue and earnings growth

Atturra (ASX: ATA) counts among the ASX tech shares bucking the trend, with the share price up 25% year-to-date.

Atturra is a relative newcomer to the ASX, listing on 22 December 2021. The company provides a range of enterprise advisory, consulting, and IT services and solutions to government and corporate entities.

The company released its first FY22 results as a listed entity on 30 August.

Among the highlights, the newly minted ASX tech share reported a 29% year-on-year increase in earnings before interest and tax (EBIT) of $12.4 million.

FY22 revenue reached $134.6 million, up 37% from the prior year. And Atturra held $35 million in cash at hand as at 30 June, with a debt of $4.8 million.

These are among the reasons that 1851 Capital's Chris Stott told Livewire, "We've gone with Atturra," when asked for a microcap stock that can take advantage of the current conditions and "really set itself up for the coming years".

Why this small-cap ASX tech share 'stands out' right now

According to Scott, the recently listed ASX tech share "trades on seven times EBIT… So, it's doing very well in terms of, it's performed well since its listing."

Scott added:

It's got $30 million of net cash on the balance sheet. It's been upgrading its earnings since the listing. So, [a] very well managed little IT services business, off the radar. Not many institutions on the register, not well covered by the stock broking community. So that one stands out for us right now.

How has this ASX tech share been performing?

Up 25% this year to 75 cents per share, the Atturra share price reached all-time highs of 84 cents on 7 June.

Over the past month, the ASX tech share has gained 12%, compared to a 4% loss posted by the All Tech Index.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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