Are you looking for options in the tech sector? If you are, then Objective Corporation Limited (ASX: OCL) could be the ASX tech share to buy this week.
That's the view of analysts at Goldman Sachs, which are feeling very positive about the public sector software provider.
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Why is Objective Corp an ASX tech share to buy?
Goldman Sachs recently attended Objective Corp's inaugural investor day event and came away feeling comfortable that the company is well-placed to deliver on expectations in FY 2023. It explains:
We attended Objective Corp's inaugural Investor Day on Friday 19 May in Sydney. OCL did not provide a quantitative trading update given the significant deal skew to May/June each year (in line with typical public sector procurement processes), although we came away incrementally more comfortable with our assumption for ARR growth to accelerate to +14% y/y in 2H23E (vs +12% in 1H23) given the positive commentary around customer adoption of new products and resilience of public sector demand.
The good news is that Goldman doesn't believe this ASX tech share will stop growing at a strong rate any time soon. In fact, the broker is expecting its growth to go up a gear in FY 2024 and FY 2025. It said:
In our view OCL is well placed to deliver robust and defensive earnings growth driven by (1) R&D and new product cycles accelerating the contribution from newer products including Nexus, Build and RegWorks; (2) cycling of revenue/earnings headwinds from model transition away from perpetual / services revenue and towards subscriptions; and (3) cost management into FY24, with +350/+250bps margin expansion driving +23%/+32% FY24/25 EPS growth when comping trough FY23E earnings.
Big returns ahead
In light of the above, Goldman Sachs sees plenty of value in this ASX tech share.
The note reveals that its analysts have a buy rating and $14.90 price target, which implies potential upside of 17% for investors over the next 12 months.
