It has been a tough 2026 for ASX technology stock Gentrack Group Ltd (ASX: GTK).
Gentrack engages in the development, implementation, and support of software solutions for electricity, gas and water utilities, and airports.
Yesterday, it continued its free fall, dropping 5% to take its year to date fall to 55%.
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Why is this ASX technology stock crashing this year?
Much of this pain came on May 5th when it crashed 35% in a single session following a trading update.
According to the release, the company expects FY2026 revenue to range between NZ$229 million and NZ$238 million.
This is below its previous guidance and broadly in line with FY2025 revenue of NZ$230.2 million.
Management said the weaker outlook is due to softer non-recurring (NRR) revenue, which is expected to decline compared with FY2025 and offset growth in recurring revenue. Recurring revenue, however, is forecast to increase by more than 10% to approximately NZ$174 million.
Bell Potter tips a rebound
A new report from Bell Potter suggests this ASX technology stock is now attractively valued.
This comes following the announced acquisition of New Zealand energy software business Prospero Energy for NZ$24 million.
The deal aims to strengthen its utilities platform.
Bell Potter said Gentrack Group's acquisition of energy pricing software business Prospero Energy strengthens its g2.0 platform and could also perform well as a standalone product.
The broker noted the NZ$24 million deal is unlikely to materially boost earnings in FY26 or FY27, although management expects it to be earnings accretive by FY28, and Bell Potter views the acquisition positively because it is not being used to fill short-term revenue weakness.
Buy rating retained
Based on this guidance, Bell Potter has retained its buy recommendation on this ASX technology stock.
The broker has also slightly increased its price target to $5.70 (previously $5.60).
From yesterday's closing price of $3.32, this indicates an upside potential of over 70%.
We anticipate the market will continue to discount GTK until it is able to visibly execute on Utilities NRR, however we remain broadly positive on GTK due to the large secular tailwinds in rapidly shifting energy production and consumption trends driving increased complexity within grids, billing platform requirements and broader digital transformations.
Bell Potter isn't the only analyst tipping a rebound.
Shaw and Partners recently issued a research report on Gentrack that included a $8 price target for the company.
If it were to reach that level, it would represent a gain of 141%.
