Objective Corporation Ltd (ASX: OCL) shares are under pressure on Friday.
At the time of writing, the ASX tech stock is down 3% to $12.59.
What's going on?
As a reminder, this content, collaboration, and process management software provider released its FY 2024 results on Thursday.
For the 12 months ended 30 June, the ASX tech stock reported a 6% increase in sales revenue to $117.5 million and an 11% jump in annual recurring revenue (ARR) to $104.5 million.
While double-digit growth is great, it was short of management's 15% growth target. This may explain why its shares are under a spot of pressure today.
Nevertheless, that didn't stop the company's operating cash flow from more than doubling to $56 million. This represents 127% of adjusted EBITDA and boosted its cash balance by 32% year on year to $96 million.
This ultimately allowed the company's board to lift its total dividends by 26% to 17 cents per share, which comprises an 8 cents per share fully franked dividend and a 9 cents per share unfranked dividend. Its shares will go ex-dividend for these payouts early next month with their payment dates coming around a couple of weeks later.
Based on its current share price, this equates to a modest 1.35% dividend yield. However, management believes it is well-placed for strong growth over the long term, which could mean this dividend grows materially in the future.
The ASX tech stock's CEO, Tony Walls, said:
We are excited by the opportunity ahead of us in FY2025 and beyond. We remain confident that our overall ARR growth target of 15% is the right goal for us, and that our business model assures the growth achieved will drive an increased level of profitability.
Should you invest in this ASX tech stock?
The team at Shaw and Partners thinks that investors should be snapping up this ASX tech stock today.
While the broker was disappointed to see the company fall short of its ARR guidance, it believes this target is achievable in FY 2025.
In response to the full year results, its analysts have put a high risk buy rating and $14.40 price target on its shares. Based on its current share price, this implies potential upside of 14% for investors over the next 12 months.
To put that into context, a $5,000 investment would turn into $5,700 if the broker is on the money with its recommendation.
