By Jasmeen Ara Islam Shaikh and Kumar Tanishk
May 19 (Reuters) – Australia’s TechnologyOne shares fell on Tuesday after the software maker’s half‑year profit narrowly missed expectations, with investors disappointed by the absence of a guidance upgrade for the richly valued stock.
Shares in the Brisbane-based firm slid as much as 5.7% to A$27, their sharpest intraday drop since April 9, before paring some losses to trade 3% lower. The stock was also the biggest drag on the technology sub-index.
The drop reflects TechnologyOne’s delicate position as a richly valued market leader navigating a hypersensitive earnings backdrop, said William Taylor, chief operating officer at exchange-traded fund issuer ETF Shares.
The software maker has had a strong few months of share price performance since it upgraded its full-year profit guidance, citing artificial intelligence as a driver. It trades at a price‑to‑earnings multiple of 68.6, well above peers like WiseTech and Life360.
The company on Tuesday reported a net profit of A$66.8 million ($47.9 million) for the half-year ending March 31, which narrowly missed the Visible Alpha consensus of A$66.9 million, and reaffirmed its annual profit growth forecast of 18% to 20%.
The firm’s annual recurring revenue came in at A$598 million, just short of a Visible Alpha consensus of A$599.1 million.
“While the miss versus consensus revenue and profit estimates were relatively modest, the market was arguably looking for management to formally upgrade guidance again rather than simply reaffirm it,” Taylor added.
TechnologyOne also declared an interim dividend of 8 Australian cents per share, up from 6 Australian cents last year.
($1 = 1.3945 Australian dollars)
(Reporting by Jasmeen Ara Shaikh and Kumar Tanishk in Bengaluru; Editing by Shilpi Majumdar, Sherry Jacob-Phillips and Ronojoy Mazumdar)
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