Praemium Ltd (ASX: PPS) shares could be undervalued at current levels.
That's the view of analysts at Bell Potter, which believe this ASX All Ords stock could rise strongly over the next 12 months.
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What is the broker saying about this ASX All Ords stock?
Bell Potter was pleased with the investment platform provider's performance during the second quarter. And while there are negatives from its quarterly update, it feels the positives outweigh them. The broker said:
PPS delivered a solid 2Q26 result with operating metrics more advanced than forecast across the Group and progress on the strategy was articulated further. This is tracking to guidance, and further transformation has been flagged. Outflows were conventional again for Powerwrap, which was a positive development, offset by new attrition related to OneVue assets and management flagged an aggregate impact of -$361m. At a high level this would imply $823m net flows, which annualises to $3.3bn. While overhang is negative, this is not entirely unexpected. OneVue is now fully exited and management reaffirmed that guided full-year synergies remain achievable.
Bell Potter also highlights that the ASX All Ords stock has a robust sales pipeline, which it feels is being underappreciated by the market.
The share price movement today looks to factor in more adviser movements that could stay for another 12-18 months but does not account for client firm flows and distractions away from its sales funnel. We did not see the same sequential step-up in gross inflows for SMA and Spectrum. However, the latter remained stable and continues to surprise given expected volatility and PPS had to finalise a $933m internal transfer vs. $474m achieved in the previous quarter. There is now a focus to onboard a priority client within the SMA.
Time to buy
According to the note, the broker has responded to the update by retaining its buy rating with an improved price target of $1.10.
Based on its current share price of 79.5 cents, this implies potential upside of 38% for investors over the next 12 months.
In addition, the broker is expecting a 3.2% dividend yield in FY 2026. This boosts the total potential return beyond 40%.
Commenting on its buy recommendation, Bell Potter said:
Our Buy rating is unchanged. Wins are translating to revenue and to that end, we view: 1) inflow expectations as low and 2) compelling multiple vs. EBITDA growth equation.
PPS enters FY26 with an improvement in cash operating expenses as FUA and attaching revenue scale. It is also 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 contract win momentum now translating to revenue.
