ASX technology shares have lost serious momentum over the last couple of months.
In fact, the S&P/ASX All Technology (ASX: XTX) index is down more than 20% since the start of October.
As a result, there are some well-known companies that are now undervalued.
If you are looking for a bargain buy before the new year, here are two technology shares with appealing price targets.
Image source: Getty Images
CAR Group Ltd (ASX: CAR)
CAR Group is the company behind online marketplace carsales.com.au.
Since August, its share price has tumbled more than 25% and is now trading on a lower than normal price to earnings (P/E) ratio – around two-year lows at a P/E of ~28x.
It could be a buy-low opportunity for investors as this drop seems to be without an obvious driver.
Recent guidance out of Bell Potter seems to agree with this sentiment.
In a note out of the broker earlier this month, it said the company continues to screen favourably on a risk-adjusted return basis when considering the stability of earnings growth against comparable ASX-listed classifieds platforms.
The broker has a buy recommendation and $44.20 price target on CAR Group shares.
This indicates an upside of 36.53% from yesterday's closing price.
Similarly, the team at Wilsons Advisory reinforced the recent share price falls largely reflecting a broad de-rating across technology shares.
The report said it views these concerns as largely sentiment-driven and overblown given the company's firmly entrenched competitive moat.
SEEK Ltd (ASX: SEK)
The company operates online job marketplace Seek.com.au.
It also operates several other businesses, including Seek Learning, to help connect people with education opportunities; Seek Business, to facilitate the sale of businesses and franchises; and Seek Volunteer, which lists volunteer opportunities.
Its share price is overall up roughly 4% this year, but has fallen almost 19% since September.
This dip seems to be more cyclical rather than structural, as the core business still has solid cash flow and profitability.
At its recent AGM, the company reiterated a FY26 guidance that would result in:
- 10% revenue growth
- 15% EBITDA growth
- 32% adjusted profit growth.
Earlier this month, a note out of Macquarie reinforces it is a technology stock with plenty of upside.
Macquarie confirmed its outperform rating and $32.50 target price.
This indicates an upside of 37.37%.
