There are plenty of quality options for investors in the tech sector, but which ones could be smart additions to a portfolio now?
Let's take a look at two ASX tech shares that Morgans has been running the rule over this week and why it is speaking positively about them:
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Catapult Sports Ltd (ASX: CAT)
This sports performance technology company has caught the eye of analysts at Morgans.
The broker believes that Catapult is well-positioned to grow its revenue at a strong rate in the coming years. So much so, Morgans believes that the company is destined to become a member of the coveted Rule of 40 club by FY 2027.
In light of this, the broker has initiated coverage on this ASX tech share with a buy rating and $6.25 price target. This implies potential upside of 18% for investors over the next 12 months. Commenting on its initiation, Morgans said:
Catapult Sports Ltd (CAT) is a global leader in sports performance technology that provides a comprehensive all-in-one platform for elite professional and collegiate sports. This encompasses coaching, scouting, analytics and athlete management. Initially landing with its core wearables technology, CAT has since expanded its service offering and opened up new key verticals assisting its penetration into a large addressable market of ~20k teams globally.
We forecast strong topline growth for CAT, estimating a ~20% ACV 3-year CAGR, reaching ~US$180m by FY28. A scalable platform and strong SaaS metrics should see CAT join the 'Rule of 40' club by FY27. We initiate coverage on Catapult Sports (CAT) with a Buy recommendation and a A$6.25 per share price target.
Objective Corporation Ltd (ASX: OCL)
Another ASX tech share that Morgans has been looking at is information technology software and services provider Objective Corporation.
The broker believes that momentum is building and it is positioned for profitable growth in the coming years. It has upgraded its shares to an accumulate rating with a $20.00 price target, which suggests that upside of 11% is possible from current levels. It said:
OCL's recent investor day showcased the group's product, strategy & the broader opportunity that sits across its solutions. OCL's vision and direction is in our view clearer now vs. its inaugural event 2 years ago. We believe momentum across the business continues to build, which sees OCL well placed to deliver profitable growth in coming years. In light of the recent share price pull back, we move to an ACCUMULATE rating, with a revised PT of $20.00/sh.
