Gentrack Group Ltd (ASX: GTK) shares have been on fire over the past 12 months.
During this time, the ASX tech stock has risen by a staggering 150%.
This means that if you had invested $10,000 into the utilities and airport software company's shares a year ago, you would now have approximately $25,000.
But if you thought the gains were over, think again.
ASX tech stock tipped to keep rising
According to a note out of Bell Potter this morning, its analysts believe that Gentrack shares could still have plenty of upside.
In response to its full year results release this week, the broker said:
GTK reported a revenue beat ahead of guidance/BPe/consensus, growing +25% to $213m broad-based across operating units, recurring/non-recurring sources and regions. Margin was bottom of guidance range due to LTI costs ahead of expectations.
Bell Potter also highlights that the ASX tech stock's outlook is positive and sees upside risk to its guidance. It adds:
GTK reiterated its medium-term targets (15%+ rev. CAGR, margin 15%-20%), due to uncertain timing around potential deals closing and timing of revenue recognition in FY25. Upside risk to 15%+ revenue CAGR was flagged on the analyst call. EPS changes following the update include -16%/flat/+6% through FY25e/26e/27e, with FY25e/26e impacted by rolling off LTI costs, somewhat offset by slight revenue increases. We note forecast EPS CAGR of 56% b/w 24-27e.
Time to buy
The note reveals that Bell Potter has reaffirmed its buy rating on the company's shares with an improved price target of $13.90 (from $11.50).
Based on its current share price of $12.04, this implies potential upside of 15.5% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
Our TP increases to A$13.90/sh on earnings leverage in future periods and reduction in WACC to 10.5% on decrease in market risk premium. We are bullish on GTK's ability to maintain customer win momentum in both ROW and Core markets, supporting high NRR revenues, flow on ARR, but masks 'true' EBITDA margin during growth phases. Customer win momentum is underpinned by rapidly shifting energy consumption and production trends, driving increased complexity within the grids which is meeting technical debt within legacy billing platforms.
All in all, the broker appears to believe that it isn't too late to snap up this ASX tech stock even if it has more than doubled in value since this time last year.
