Imdex Ltd (ASX: IMD) shares are pushing higher on Friday afternoon.
At the time of writing, the mining technology company's shares are up almost 2% to $3.30.
This means that its shares are now up almost 40% since the start of the year.
But if you thought it was too late to invest, think again! That's because analysts at Macquarie believe the ASX tech stock could keep rising from here.
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What is the broker saying about this ASX tech stock?
Macquarie notes that the company has announced acquisitions that will expand its market-leading product suite. It said:
Imdex will acquire 100% of Advanced Logic Technology (ALT) and its subsidiary, Mount Sopris Instruments (MSI) for €55.8m (~A$98.9m) upfront and performance-linked deferred components including ~A$4.5m and ~A$35.4m. The acquisition will be funded from existing cash and debt facilities, with proforma leverage ~1.1x post completion.
The broker appears positive on the move and believes it will create some easy wins that accelerate growth and margins. It adds:
Expands the portfolio with complementary offerings. The acquired product portfolios are complementary and don't compete with existing IMD products. Around 20% of revenue is software with an 85% GM, while the hardware business is ~45%
Some easy wins to accelerate growth & margins. Leveraging IMD's global network is expected to generate quick wins, particularly in markets where the business currently has lower penetration. The approximately 45% gross margin in hardware has been partly driven by one-off sales revenue; however, transitioning to IMD's rental model is likely to deliver more sustainable and stronger margins over time.
Time to buy
According to the note, the broker has upgraded Imdex's shares to an outperform rating with an improved price target of $3.80.
Based on its current share price, this implies potential upside of 15% for investors over the next 12 months.
In addition, it expects a modest 1.1% dividend yield in FY 2026, growing to 2.9% in FY 2027.
Commenting on its outperform rating, Macquarie said:
Capital raising & drilling activity levels continue to improve – IMD's AGM noted an increase in rig utilisation in all regions. Current multiple ~11x EBITDA is near the top of its range, but we see potential for a re-rate if IMD can accelerate growth in its software business, both organic and M&A.
Valuation: TP +4% to $3.80ps (set near the top end of our valuation range), driven by incorporation of ALT & MSI into our forecasts. Catalysts: 1H26 result, ongoing improvement in raising and drilling activity, strategic M&A, building out software businesses.
