Now could be a good time to buy Praemium Ltd (ASX: PPS) shares according to one top broker.
In fact, if it is on the money with its recommendation, this ASX AI stock could deliver market-beating returns over the next 12 months.
What is the broker saying?
Bell Potter notes that the investment platform provider is leaning into artificial intelligence (AI) with the announcement of the acquisition of Technotia Laboratories for $7.5 million.
Commenting on the deal, the broker said:
We view the acquisition of Technotia Laboratories as value accretive and strategic – it requires low post-synergies incremental EBIT and AI-led product development creates potential upside to the trading multiple – should demand materialise.
Technotia is a business of multi-disciplinary scientists who apply an evidence-based approach to test ideas through computing machinery and intelligence. PPS originally engaged with Technotia to uplift its superannuation offering in 2H24 – so we view the acquisition as carrying high visibility. Other example third party engagements include the delivery of a truss system for Perth Stadium and patented servers with improved compute power
Time to buy this ASX AI stock
According to the note, the broker has responded to the news by retaining its buy rating and $1.05 price target on Praemium's shares.
Based on its current share price of 77 cents, this implies potential upside of over 36% for investors over the next 12 months.
In addition, Bell Potter expects Praemium's shares to provide an attractive 3.2% dividend yield in FY 2026. This boosts the total potential return to approximately 40%.
To put that into context, a $10,000 investment in this ASX AI stock would be worth approximately $14,000 by the end of next year if the broker is on the money with its recommendation.
Commenting on its buy rating, Bell Potter said:
Maintain Buy. PPS has been eying acquisitions after OneVue – and Technotia looks to provide ROIC above the company's WACC, differentiating and applying expertise over the platform. Our hurdle $0.9m NOPAT has vendor contract, technology and employee cost line-item levers, with additional FUA providing potential upside to the accretion.
PPS enters FY26 with an improvement in cash operating expenses as FUA and attaching revenue scale and is set to benefit from an additional +$3m run-rate cost out from 1H26 following the integration of OneVue. We think PPS has extensive growth runway with low single digit market share and is set to benefit from contract win momentum translating into revenue.
