Looking to buy an underappreciated ASX tech stock with strong growth potential heading into 2025?
Then you may wish to run your slide rule over All Ordinaries Index (ASX: XAO) software solutions company, Fineos Corp Holdings PLC (ASX: FCL).
That's according to ECP Asset Management's Damon Callaghan (courtesy of The Australian Financial Review).
Callaghan said he is bullish on the outlook for Fineos. Although at the moment he said the ASX tech stock is still an "unloved, under-followed technology company".
But that may well be set to change.
ASX tech stock at 'an inflection point'
"Fineos is leading in the development of modern core systems software for the life, accident and health insurance industry, in both North America and [Australia and New Zealand]," Callaghan said.
He noted that investors may have been put off by the lacklustre financial performance the ASX tech stock has reported in recent years. However, he believes that performance is about to lift off.
According to Callaghan, "Over the last five years, a slow deal environment … makes its backward-looking [profit and loss statement] uncompelling. The business, however, is approaching an inflection point."
He pointed to Fineos' new AdminSuite product as something the company's competition will find "extraordinarily difficult to replicate".
"It has established a reputation as the software leader among major insurers and has recently developed tier-1 consulting partnerships set to drive new deals," Callaghan added.
What's the latest from Fineos?
The ASX tech stock reported its September quarterly results on 28 October.
Fineos reported a 23% year on year increase in cash receipts from customers to 35.5 million euros. The boost was partly credited to the contribution of revenues from a new name customer.
Cash receipts were down 2% from the prior quarter, which management noted had benefited from significant upsell wins.
And the September quarter saw the launch of Fineos' AdminSuite, which Callaghan mentioned, at both Guardian and NYL.
The ASX tech stock reported a closing cash balance at 30 September of 29.1 million euros.
Commenting on the latest quarterly performance, Fineos CEO Michael Kelly said:
Pleasingly, we secured another new contract win during the quarter and were able to finalise several important contract renewals.
Our pipeline remains healthy and given the significant progress we are making with existing clients moving their business to the Fineos Platform, our growth prospects remain strong.
The Fineos share price has gained 19% in a year.
Much of that lift has come over the last month, with the ASX tech stock up 36% since 11 November.
