Dicker Data Ltd (ASX: DDR) shares lifted 6% last Thursday on the back of strong FY25 results.
The company is a wholesale distributor of computer hardware, software, cloud, and related products.
Last week it reported a 15.7% increase in gross revenue to $1,840.5 million and an 11.4% rise in net profit before tax (NPAT) to $56.6 million in its half year results.
The company's executive chair, Fiona Brown, said it was a "strong first half result returning the company to double-digit growth in a competitive market".
It seems investors were pleased, with Dicker Data shares posting another 4% rise yesterday.
This means the technology company has seen more than a 7% share price rise across just the past 5 trading days.
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What is Macquarie's outlook?
Macquarie's analysis of Dicker Data highlights a strong 1H25 result, with earnings per share beating consensus by 4%.
The broker attributed this to increased IT device purchasing, as larger customers undergo a refresh cycle from Windows 10 to 11.
Management noted that this refresh is largely complete for approximately 60% of Enterprise customers and 50% of Mid-Market clients.
Macquarie noted that increased competition in the lucrative mid-market space could pose a medium term risk.
We maintain our Neutral, and see balanced risk/reward symmetry given SME expenditure remains subdued, but (lower-margin) Enterprise AI PC demand is supporting earnings growth over FY25E. Founder-selling (despite escrow to Mar-26) remains an overhang, but could actually help longer-term liquidity.
12 month price target
After a strong past 5 days for Dicker Data shares, it closed at $9.52 on Monday.
Macquarie has a "neutral" rating and 12 month price target of $9.45 on Dicker Data shares.
We raise our target price by +1% to $9.45 (from: $9.35), based on a combination DCF/PE-Rel valuation. This is reflective of our revisions in FY27E (+1%) & FY28E (+1%). Given the current balanced risk/reward symmetry, we maintain our Neutral rating.
It seems after last week's strong run, this technology company's share price is trading close to fair value based on Macquarie's analysis.
It seems brokers elsewhere believe there is further room for upside however.
TradingView has a consensus 12 month price target of $10.52, which indicates roughly 10% upside.
Online brokerage platform Selfwealth has similar view on Dicker Data shares, with an average price target of $10.49.
