Leading ASX-listed tech stocks in focus today

Highlights: 

• The benchmark S&P/ASX 200 closed 1.42% lower on Wednesday (4:17 PM AEST, 7 September).
• Sectors ended on mixed note. 9 out of 11 closed lower. Among all, the Information Technology was the best performing sector on Wednesday.
• Energy sector was the worst performing sector today, shedding 2.88% on Wednesday.

Of all the prominent sectors that are a part of the Benchmark S&P/ASX 200 index, only two managed to end on bullish side on Wednesday (7 September 2022). The ASX 200 Information Technology sector was the best performing sector of all.

The S&P/ASX 200 Information Technology sector (INDEXASX:XIJ) ended 0.33% higher at 1,490 points, after gaining by 4.9 points on ASX today.

IT stocks listed on ASX are categorised under a few major classes like the Telecommunication sector, Software, Computer hardware and Electronics.

Here in this article, Kalkine discusses five major ASX-listed Information Technology stocks: WiseTech Global Limited (ASX:WTC), Xero Limited (ASX:XRO), Altium Limited (ASX:ALU), Block Inc. (ASX:SQ2), and Link Administration Holdings Limited (ASX:LNK).

WiseTech Global Limited (ASX:WTC) 

Leading software and service firm WiseTech Global Limited (ASX:WTC) shares closed 0.398% lower at AU$57.530 per share on ASX today.

On 24 August 2022, WiseTech released its fully audited annual financial result for FY22 ended on 30 June 2022. WiseTech’s clocked revenue gain of 25% compared to FY21 to AU$632.2 million in FY22. Furthermore, the company’s statutory net profit after tax stood at AU$194.6 million, up 80% from FY21 and underlying NPAT gained 72% in the given period.

WiseTech had delivered underlying earnings per share (EPS) of 55.8 Australian cents per share in the given period. Followed by strong financial results, the board of the company declared to pay a fully franked final dividend of 6.4 Australian cents per share. The company will turn ex-dividend on 9 September 2022 and will pay a dividend to its eligible shareholders on 7 October 2022.   

Recently in an announcement, WiseTech responded to media speculation related to a potential acquisition. As already stated by WiseTech earlier, the company will continue to execute its expansion strategy through ‘tuck-in’ acquisitions and potential strategically significant acquisition opportunities. The company will keep the market informed about any acquisition news aligned with its strategies. 

WiseTech’s share price has appreciated by more than 18% in the last one year on ASX. On the contrary, WiseTech’s YTD-based share price fell by almost 4% (as of 4:12 PM AEST).

Xero Limited (ASX:XRO) 

Shares of online accounting software developer Xero Limited (ASX:XRO) closed 0.071% lower at AU$84.14 per share on ASX on Wednesday.

Xero’s FY22 results have revealed strong financial numbers. The company’s gross profit margin rose to 87.3% in FY22. As a result, most of the revenue earned by the company was converted into gross profit, which can be used further by the company to grab growth opportunities such as marketing and software development. 

In FY22, Xero’s operating revenue grew 29% compared to FY21 to NZ$1.1 billion in FY22. This significant revenue growth will help the company in its strong growth in future.

Xero’s average revenue per user (ARPU) rose by 7% to NZ$31.36 in FY22. Furthermore, the company’s global subscriber count rose by 19% in FY22.  

In last 12 months, Xero’s share price declined 45% on ASX. On a year-to-date basis, its share price declined by more than 42% on ASX (As of 4:12 PM AEST, 7 September).

Image source: © Alexandersikov | Megapixl.com

Altium Limited (ASX:ALU) 

Leading software developer Altium Limited (ASX:ALU) shares closed 0.167% higher at AU$35.8 per share on ASX today.

On 22 August 2022, Altium released its fully audited FY22 results on ASX, which highlighted all the key financials of the company. The company believes that its performance in FY22 exceeded all its targets in terms of revenue and margin. 

Altium reported resilient revenue growth of 23% to US$220.8 million in FY22. The company’s underlying EBITDA margin went up by 36.7% in FY22, compared to 34.3% in FY21. Recurring revenue of 75% of total revenue, with 31% growth in ARR. Altium recorded a 57% growth in Profit After Tax of 57% to US$55.5 million in the given period. In FY22, the company’s Earnings Per Share (EPS) got lifted by 57% to US$42.2 Australian cents.

Driven by strong financial performance, the board of Altium decided to pay a fully franked final dividend of 26 Australian cents per share to its eligible shareholders on 27 September 2022.

In last one year, Altium’s share price has marked a gain of 12.4% on ASX. However, Altium’s YTD-based share price declined almost 20% (as of 4:12 PM AEST on Wednesday).

Block Inc. (ASX:SQ2) 

Renowned fintech organisation Block Inc. (ASX:SQ2) shares ended on a negative note on Wednesday. Block’s share price dropped 1.125% to end at AU$96.650 per share on ASX today.

In the last one year, Block’s share price has marked a loss of 45.28% on ASX. 

Link Administration Holdings Limited (ASX:LNK)

Shares of Link Administration Holdings Limited (ASX:LNK) closed 2.619% higher at AU$4.310 per share today. Link is an ASX-listed technology firm offering tech-enabled administration facilities for financial ownership data.

Link Administration Holdings announced its annual financial result for FY22; the period ended on 30 June 2022. Link’s revenue in FY22 increased by 1.3% from that of FY21to AU$1.18 billion.

The company’s operating EBIT gained 8.8% compared to FY21 to AU$153.9 million in FY22. On the other hand, Link’s operating Net Profit After Tax (NPAT) gained 7.1% to AU$121.3 million in the given period. Meanwhile, the company’s net operating cash flow got lifted 30% to AU$205 million in FY22.  

Link recorded a capital expenditure of AU$$69.2 million or 5.9% of the total company’s revenue in FY22.

Link’s FY 2023 Outlook and Guidance: 

In FY23, Link expects its revenue to increase by a low single-digit percentage. On the other hand, Link’s expected operating EBITDA is supposed to be around 8-10% higher than FY 2022. Furthermore, Link’s operating EBIT is expected to be around 10-12% higher than FY 2022 in FY23.

In last 12 months, Link’s share price has marked a loss of almost 6% on ASX. Furthermore, Link’s YTD-based share price declined by almost 23% as of 4:12 PM AEST on ASX today.