TechnologyOne Ltd (ASX: TNE) shares closed last week with an impressive 3% gain.
TechnologyOne is one of the largest publicly listed software companies in Australia, with offices across six countries. It develops user-friendly enterprise software products that are deeply integrated into customers' information technology, or IT, infrastructure.
Like many software and technology companies, it experienced a heavy sell-off during the start of 2026 due to AI replacement fears.
It has since steadied over the last month, and brokers are now viewing TechnologyOne shares as a buy-low candidate.
Last week, the team at Bell Potter issued updated guidance on the company.
Here's the latest from the broker.
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All eyes on first half results
TechnologyOne will report its first-half FY26 results on Tuesday, 19 May.
Bell Potter expects profit before tax (PBT) growth to match the company's earlier guidance of "high single-digit" growth.
They forecast PBT to rise 9% to $89.4 million, slightly above market consensus of 8% growth to $88.4 million.
The key area that could outperform expectations is annual recurring revenue (ARR). There is no official first-half ARR guidance, but Bell Potter and the broader market both expect ARR to grow 17% year-on-year to around $600 million.
Bell Potter assumes TechnologyOne will add about $100 million in ARR during FY26, which would match the top end of management's 16–18% growth guidance. They expect this increase to be weighted toward the second half, with roughly $45 million added in H1 and $55 million in H2.
We believe, however, there is some chance of ARR growth exceeding $45m in H1 due to in part to the release of Plus – Technology One's agentic AI product – and the impact this is having on product uptake by customers (e.g. James Cook University) which is driving up both NRR and ARR.
If ARR growth does exceed $45m in H1 then this would suggest growth for the full year above $100m – given the typical H2 skew – and so could potentially lead to an upgrade of the full year guidance of 16-18% growth.
Buy rating retained for TechnologyOne shares
Based on this guidance, Bell Potter has retained its buy recommendation on TechnologyOne shares.
The broker has also increased its target price to $32.25 (previously $31.75).
From last week's closing price of $28.36, this indicates an upside potential of almost 14%.
We see the result next week as a potential catalyst given the possible positive surprise in ARR.
