ASX:TNE

Stock Analysis Report

Executive Summary

Technology One Limited researches, develops, markets, sells, implements, and supports integrated enterprise business software solutions in Australia, New Zealand, and internationally.

Snowflake

Fundamentals

Outstanding track record with excellent balance sheet.


Similar Companies

Share Price & News

How has Technology One's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.8%

TNE

-0.6%

AU Software

0.4%

AU Market


1 Year Return

35.2%

TNE

39.0%

AU Software

9.8%

AU Market

Return vs Industry: TNE underperformed the Australian Software industry which returned 39% over the past year.

Return vs Market: TNE exceeded the Australian Market which returned 9.8% over the past year.


Shareholder returns

TNEIndustryMarket
7 Day2.8%-0.6%0.4%
30 Day-0.3%-1.4%-1.1%
90 Day-6.1%2.4%-0.6%
1 Year37.6%35.2%40.2%39.0%16.1%9.8%
3 Year36.9%29.5%117.9%108.4%36.1%17.9%
5 Year150.1%125.8%169.6%148.0%49.4%15.7%

Price Volatility Vs. Market

How volatile is Technology One's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Technology One undervalued compared to its fair value and its price relative to the market?

38.27x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: TNE (A$7.34) is trading above our estimate of fair value (A$7.04)

Significantly Undervalued: TNE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TNE is poor value based on its PE Ratio (38.3x) compared to the Software industry average (32.2x).

PE vs Market: TNE is poor value based on its PE Ratio (38.3x) compared to the Australian market (18.2x).


Price to Earnings Growth Ratio

Low PEG Ratio: TNE is poor value based on its PEG Ratio (3.3x)


Price to Book Ratio

PB vs Industry: TNE is overvalued based on its PB Ratio (30.7x) compared to the AU Software industry average (4.6x).


Next Steps

Future Growth

How is Technology One forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

11.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNE's forecast earnings growth (11.6% per year) is above the savings rate (2.3%).

Earnings vs Market: TNE's earnings (11.6% per year) are forecast to grow faster than the Australian market (10.3% per year).

High Growth Earnings: TNE's earnings are forecast to grow, but not significantly.

Revenue vs Market: TNE's revenue (9% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: TNE's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TNE's Return on Equity is forecast to be very high in 3 years time (48.3%).


Next Steps

Past Performance

How has Technology One performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TNE's earnings have grown by 13.8% per year over the past 5 years.

Accelerating Growth: TNE's earnings growth over the past year (36%) exceeds its 5-year average (13.8% per year).

Earnings vs Industry: TNE earnings growth over the past year (36%) exceeded the Software industry 22%.


Return on Equity

High ROE: TNE's Return on Equity (80.1%) is considered outstanding.


Return on Assets

ROA vs Industry: TNE has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: TNE has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Technology One's financial position?


Financial Position Analysis

Short Term Liabilities: TNE's short term assets (A$133.7M) do not cover its short term liabilities (A$171.4M)

Long Term Liabilities: TNE's short term assets (133.7M) exceeds its long term liabilities (4.4M)


Debt to Equity History and Analysis

Debt Level: TNE is debt free.

Reducing Debt: TNE has not had any debt for past 5 years.

Debt Coverage: TNE has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TNE has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TNE has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TNE's debt is covered by short term assets.


Next Steps

  • Explore more healthy companies in the Software industry.

Dividend

What is Technology One's current dividend yield, its reliability and sustainability?

1.54%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%2.4%markettop25%5.6%industryaverage1.2%forecastin3Years2.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TNE's dividend (1.54%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: TNE's dividend (1.54%) is low compared to the top 25% of dividend payers in the Australian market (5.59%).

Stable Dividend: TNE is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: TNE is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: TNE is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TNE's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Technology One's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Edward Chung 0

2.4yrs

Tenure

AU$1,396,604

Compensation

Mr. Edward James Chung, BCom, MCom, CA, FTIA, AICD, has been the Chief Executive Officer at TechnologyOne Limited since May 23, 2017 and served as its Chief Operating Officer from February 16, 2016 to May  ...


CEO Compensation Analysis

Compensation vs. Market: Edward has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Australian market.

Compensation vs Earnings: Edward's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.5yrs

Average Tenure

Experienced Management: TNE's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

Experienced Board: TNE's board of directors are considered experienced (3.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$485,06104 Jul 19
Kevin Blinco
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares60,000
Max PriceAU$8.08
SellAU$57,551,56626 Jun 19
Pinnacle Investment Management Limited
EntityCompany
Shares7,075,472
Max PriceAU$8.13
BuyAU$9,767,42526 Jun 19
Pinnacle Investment Management Limited
EntityCompany
Shares1,264,170
Max PriceAU$7.73
BuyAU$100,39726 Jun 19
Sharon Doyle
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares12,375
Max PriceAU$8.11
SellAU$31,198,65420 May 19
Hyperion Asset Management Limited
EntityCompany
Shares4,023,902
Max PriceAU$8.31
BuyAU$18,907,90531 Jan 19
Fss Trustee Corporation, Asset Management Arm
EntityCompany
Shares2,914,573
Max PriceAU$6.49
BuyAU$426,27931 Jan 19
First State Super Financial Services Pty Ltd., Asset Management Arm
EntityCompany
Shares68,552
Max PriceAU$6.22
SellAU$33,014,99727 Nov 18
Pinnacle Investment Management Limited
EntityCompany
Shares5,864,343
Max PriceAU$5.66
BuyAU$6,934,70427 Nov 18
Pinnacle Investment Management Limited
EntityCompany
Shares1,245,905
Max PriceAU$5.57
SellAU$22,199,99827 Nov 18
John MacTaggart
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares4,000,000
Max PriceAU$5.55
BuyAU$6,978,68122 Nov 18
Hyperion Asset Management Limited
EntityCompany
Shares1,245,905
Max PriceAU$5.60
SellAU$25,183,70922 Nov 18
Hyperion Asset Management Limited
EntityCompany
Shares4,506,381
Max PriceAU$5.77

Ownership Breakdown


Management Team

  • Adrian Di Marco

    Founder

    • Tenure: 0yrs
    • Compensation: AU$1.35m
  • Michelle Reid

    Executive Secretary

    • Tenure: 0yrs
  • Roger Phare

    Operating Officer of United Kingdom

    • Tenure: 0yrs
    • Compensation: AU$520.79k
  • Edward Chung

    Chief Executive Officer

    • Tenure: 2.4yrs
    • Compensation: AU$1.40m
  • Paul MacRae

    General Manager of Human Resources & Payroll and Business Process Automation

    • Tenure: 7.9yrs
  • Gareth Pye

    Acting Operating Officer of Corporate Services & Deputy CFO

    • Tenure: 5yrs
    • Compensation: AU$273.70k
  • Stuart MacDonald

    Chief Operating Officer

    • Tenure: 2.4yrs
    • Compensation: AU$1.01m
  • Stephen Kennedy

    Head of Compliance & Risk and Group Company Secretary

    • Tenure: 2.5yrs
  • Lisa Watson

    Corporate Communications Manager

    • Tenure: 0yrs
  • Paul Jobbins

    CFO & Operating Officer of Corporate Services

    • Tenure: 1yrs

Board Members

  • Jane Andrews

    Independent Non-Executive Director

    • Tenure: 3.7yrs
    • Compensation: AU$128.27k
  • Richard Anstey

    Independent Non-Executive Director

    • Tenure: 13.8yrs
    • Compensation: AU$128.27k
  • Adrian Di Marco

    Founder

    • Tenure: 0yrs
    • Compensation: AU$1.35m
  • John MacTaggart

    Non-Executive Director

    • Tenure: 19.8yrs
    • Compensation: AU$128.27k
  • Ron McLean

    Deputy Chair

    • Tenure: 2.2yrs
    • Compensation: AU$128.27k
  • Kevin Blinco

    Independent Non-Executive Director

    • Tenure: 15.5yrs
    • Compensation: AU$128.27k
  • Cliff Rosenberg (55yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
  • Sharon Doyle

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: AU$74.83k

Company Information

Technology One Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Technology One Limited
  • Ticker: TNE
  • Exchange: ASX
  • Founded: 1987
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$2.333b
  • Shares outstanding: 317.83m
  • Website: https://www.technologyonecorp.com

Number of Employees


Location

  • Technology One Limited
  • TechnologyOne HQ
  • Level 11
  • Fortitude Valley
  • Queensland
  • 4006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TNEASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 1999
TNECHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 1999
RW8DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1999

Biography

Technology One Limited researches, develops, markets, sells, implements, and supports integrated enterprise business software solutions in Australia, New Zealand, and internationally. It operates through S ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 10:31
End of Day Share Price2019/10/18 00:00
Earnings2019/03/31
Annual Earnings2018/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.