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.
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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.
