Hansen Technologies Ltd (ASX: HSN) shares are slightly more than 40% down over the past 12 months, but following their full-year results, broker Shaw and Partners is predicting some serious upside for the S&P/ASX 300 Index (ASX: XKO) stock.
Shaw and Partners has a buy recommendation on the shares, and a very bullish share price target, which I'll get to shortly.
First, let's look at what the company reported recently.
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Strong profit result from steady revenue
Hansen earlier this week reported operating revenue of $386.5 million, down 1.5%, with the company saying the result was impacted by lower licence fees and foreign exchange headwinds.
Underlying net profit was strong however, coming in 22.5% higher than the previous corresponding period at $48.5 million.
Hansen Chief Executive Officer Andrew Hansen said regarding the result:
FY26 demonstrated the resilience of Hansen's business model. In a more cautious environment, we have remained focused on disciplined execution, protecting earnings quality while continuing to invest for long-term growth. What we have seen during the year, with regards to revenue, is primarily caused by mix and foreign exchange. We continue to have a solid pipeline of demand for our products and services. Our recurring revenue base continues to improve, providing stability and visibility through the cycle. AI is increasingly driving productivity, operating leverage and long-term margin expansion.
The company said AI had been a large focus, and an AI enablement team had been set up to drive capability across the workforce.
Hansen said it was now "shifting from capability building to the deployment and commercialisation of AI solutions that deliver measurable value for customers and shareholders''.
On the corporate front, the company said its strong cash generation and conservative balance sheet provided flexibility to pursue accretive opportunities.
Hansen Technologies shares looking cheap
Shaw and Partners said in a note to clients following the result, that it was a better result than the headline numbers indicated.
They said:
Key takes: 1) FY26 was stronger underneath the headline, with improving recurring revenue mix, disciplined costs and record cash generation; 2) FY27 is now a transition/investment year as licence revenue shifts to recurring streams and HSN reinvests in AI and sales, with growth and 30%+ margins expected to return in FY28; and 3) Stuart MacDonald's appointment as CEO adds a credible new growth lens.
Shaw and Partners reiterated their buy rating but reduced their 12-month price target on Hansen shares from $7.60 to $6.80.
This compares to $3.26 currently. Hansen Technologies is valued at $869.2 million.
