2 ASX tech stocks I would buy right now: expert

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The outlook for persistent inflation and rising interest rates has deflated enthusiasm for growth stocks, especially in technology.

However, the ASX still offers some gems if you know where to head (or who to ask).

Wilson’s investment adviser Peter Moran this week nominated a pair of ASX tech stocks, which he likes the look of:

ASX share with ‘recurring revenue and strong profits’

ReadyTech Holdings Ltd (ASX: RDY) is a manufacturer of personnel management software with customers in many industries, although it derives much of its revenue from the education sector.

Its shares have risen 82% this year and the company has a market capitalization of more than $ 400 million.

But it does not seem to attract much attention. The last we heard of The Motley Fool, the stock rose back in September after a strategic acquisition.

Moran believes the software maker deserves more praise, according to Taurus.

“This software-as-a-service business is attractive for its high levels of recurring revenue and strong margins. Both are driven by the quality of its software.”

He rates the stock as overweight while anticipating further growth.

“ReadyTech recently highlighted a potential opportunity to move existing payroll customers to a new superior product that is more profitable.”

According to CMC Markets, 3 out of 4 analysts rate ReadyTech as a strong buy, while the other broker describes it as a moderate buy.

Technology company that will be cash flow positive this year

Shares for fintech Plenti Group Ltd (ASX: PLT) originally struggled after floating in September last year.

But in 2021, the stock has steadily risen to show a return of 22% so far.

This is another ASX technology stock that has gone a bit under the radar, with only 3 analysts covering the business.

According to CMC Markets, 2 of them rate Plenti as a strong buy, while the third analyst rates it as a moderate buy.

Moran agrees that it is a tempting purchase at the moment.

“We expect Plenti to reach a $ 1 billion loan book and become cash flow positive by the end of December this year,” he said.

“Our assessment is overweight.”

Last month’s second-quarter performance update showed encouraging signs, according to Moran. The Plenti share actually rose 7% on the day.

“The second quarter update confirmed continued strong loan origins across all three lending segments. Borrowing increased from $ 3.3 million per day in the first quarter to $ 3.9 million per day in the second quarter.”

The Sydney company now has a market capitalization of $ 238.5 million.

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