If you are looking for exposure to the tech sector, then it could pay to listed to what Macquarie Group Ltd (ASX: MQG) is saying about one ASX All Ords technology stock.
That's because the broker believes it could generate big returns over the next 12 months.
Which ASX All Ords tech stock?
The tech stock in question is Siteminder Ltd (ASX: SDR).
In case you're not familiar with the company, let's take a quick look at what it does.
SiteMinder is the owner of the world's leading hotel distribution and revenue platform. It also owns Little Hotelier, which is an all-in-one hotel management software that makes the lives of small accommodation providers easier.
Management notes that it generates more than 125 million reservations worth over $80 billion in revenue for its hotel customers each year.
What is broker saying about Siteminder?
Macquarie has initiated coverage on the ASX All Ords tech stock today with a bullish view.
This is based partly on its belief that the company has a significant long term growth opportunity. It said:
The global hotel industry is estimated to be worth ~$573bn (Phocuswright) made up of >1m hotels. Today SDR serves >47k properties representing ~5% market share. We expect this will continue to grow, and forecast medium-term property growth of ~12% pa. The rise of multichannel distribution strategies is forcing increased adoption of channel managers by SMEs.
We forecast medium term revenue growth of a 22% pa CAGR over FY24-27E supported by continued growth in 1) market share; and 2) transaction product adoption. This exceeds most ASX small cap technology peers and material upside exists if SDR achieves its ~30% medium term target.
According to the note, the broker has initiated coverage on the ASX All Ords tech stock with an outperform rating and $6.09 price target. Based on its current share price of $4.77, this implies potential upside of 28% for investors over the next 12 months.
Commenting on its recommendation, the broker said:
Initiate at Outperform. We think SDR will rapidly grow medium-term revenue on continued 1) market share growth; and 2) transaction product adoption. Smart Platform represents material upside revenue potential and if successfully executed should support a long-term re-rate.
Catalysts: 1) FY25 results; 2) reaching positive UFCF; 3) Smart Platform revenue coming online; and 4) achieving ~30% revenue growth.
All in all, this could make this ASX All Ords tech stock one to consider if you're looking for exposure to this side of the market.
