Technology One's Result Meets Expectations, but Fair Value Estimate Raised 25% on Improving Outlook
We have increased our fair value estimate for narrow-moat Technology One by 25% to AUD 5.00 per share following the fiscal 2016 result. The valuation increase is driven by higher profit margin forecasts following a better-than-expected outlook for the relatively new and high-growth cloud-based services division. We now expect group EBIT margins to reach 30% by fiscal 2026, versus 25% previously, following management's guidance that cloud services EBIT margins could eventually exceed 40%. Managem...Technology One is engaged in the development, marketing, sales, implementation and support of enterprise business software solutions. Co.'s segments are: Sales and Marketing, which is involved in the sales of license fees and customer support; Consulting, which is involved in the implementation, consulting services and custom software development services for large scale, purpose built applications; Research & Development, which is involved in research development and support; Cloud, which is involved in the delivery of cloud hosting services; and Corporate, which is involved in the aggregation of the corporate services functions' costs and revenue, and corporately-funded projects.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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