Image Source: Getty Images
The technology sector is home to a number of companies with great growth potential.
Two that are highly rated are listed below. Here’s what you need to know about these tech stocks:
Adore Beauty Group Limited (ASX: ABY)
The first tech stock to be considered is Australia’s leading online beauty retailer, Adore Beauty.
Even though it’s just a bit of a disservice to call it just an online beauty retailer as it’s so much more. Since its launch in 2000, Adore Beauty has developed into an integrated platform for content, marketing and e-commerce, collaborating with a broad and diverse portfolio of approximately 260 brands and 10,800 products.
It has grown strongly over the last few years and this has continued into the financial year 2022. Adore Beauty announced its first quarterly update last week and reported a 25% increase in revenue to $ 63.8 million. This was supported by a jump of 24% in active customers to 874,000 and recurring customer growth of 63%.
On a positive note, even when it is annual, this is only a fraction of the beauty and personal care (BPC) market in Australia, estimated to be worth $ 11.2 billion. In addition, it is expected to grow by a 26% CAGR by 2024.
Morgan Stanley is a fan of the company. It currently has an overweight rating and a price target of $ 6.00 on its shares.
Another ASX tech stock to look at is Nitro Software. It is a software company that aims to drive digital transformation in organizations around the world with its Nitro Productivity Suite. Nitro Productivity Suite delivers integrated PDF productivity and electronic signature tools to customers through a horizontal software-as-a-service and desktop-based software solution.
In the financial year 2021, Nitro aims for an annual recurring revenue (ARR) of between $ 39 million and $ 42 million. This will increase sharply year on year, but still far from the total addressable market estimated at $ 28 billion.
The team at UBS is very positive about Nitro. Last week, they began covering the company with a buy rating and a price target of $ 4.70. The broker estimates that Nitro’s ARR could exceed $ 100 million by 2024.