Technology One Limited (ASX: TNE) shares suffered a dramatic sell-off by investors last week after the company posted its full-year earnings. The ASX tech share reported strong financials and revenue growth, but it appears that investors weren't satisfied with its lack of future growth projections.
Last Monday, the 17th of November, Technology One shares shed 17% of their value in just one day. There has been some recovery since then, but the stock still has a long way to go to return to pre-reporting season levels.
At the time of writing, ahead of the ASX open on Wednesday morning, the ASX tech share is priced at $30.58 per share. For the month, the shares are 21.02% lower, and for the year-to-date, the ASX tech share is down 0.13%.
The thing is, despite the latest drop in investor sentiment, I still think this ASX tech share could quietly become a global leader.
And thanks to its new ultra-low share price, it could make a fortune for savvy investors.
Here's why.
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Technology One well-positioned for a boom in growth
TechnologyOne is one of the largest publicly listed software companies in Australia, with offices across six countries. It develops user-friendly enterprise software products that are deeply integrated into customers' information technology (IT) infrastructures.
The company boasts more than 1,300 clients across seven industry segments: namely, government, local government, financial services, education, health and community services, utilities, and managed services.
In FY25, the business delivered 18% revenue growth, reaching $610 million, and its annual recurring revenue (ARR) increased 18% to $554.6 million.
The ASX tech company is also pressing forward with its growth strategies. The business continually expands its customer base and acquires new customers. It is also making significant investments in artificial intelligence and developing future growth platforms to help expand its product offerings.
The ASX tech share has also achieved its target net revenue retention (NRR) rate of 15%, which represents the growth in revenue from existing customers since last year. Revenue doubles in five years if it grows at an average annual rate of 15%.
What do the experts think about the ASX tech share?
Analysts are very bullish on the outlook for Technology One, too, with many predicting a strong upside.
TradingView data shows that out of 18 analysts, 11 still have a buy or strong buy rating on the stock. The maximum upside is as high as $44.55, which implies a 59.5% upside for investors at the time of writing.
Morgan Stanley analysts recently upgraded the company's shares to an overweight rating with an improved price target of $36.50. That implies a 19.4% upside is ahead for investors. The broker said it thinks that recent share price weakness has created a very attractive entry point for investors.
The team at Morgans has an accumulate rating on the shares and a more modest $34.50 price target. That implies a 12.8% upside at the time of writing.
With predicted potential increases like these, it looks like now is a perfect time for investors to get in on the action!
