It is time to reveal our 4 best ASX Technology stocks for 2024! With the interest rate hiking cycle over, we think the technology sector is primed to have a good year. But, it is inevitable that some stocks will perform better than others – which ones will outperform?
Our 4 best ASX Technology stocks for 2024
The first of best ASX Technology stocks for 2024 is Xero. If you run a business, you’re going to need accounting and payroll services and this is what Xero provides – and better than many of its peers. Since its founding in 2007, it has gradually developed features useful beyond book-keeping, such as storing files, converting currencies, keeping track of inventories and creating professional quotes.
Despite not being profitable, Xero has edged closer to this point and has continued to record solid growth. In FY23, it grew revenues by 28% to NZ$1.4bn, its subscribers by 14%, average revenue per user by 10% and its operating income by 61%. This performance has continued into FY24 with 21% revenue growth and 13% subscriber growth in the first 6 months of the year. Most importantly, it hit NPAT profitability, recording $54m.
Consensus estimates for the full FY24 call for NZ$1.7bn in revenue, up 21% and for a further 17% growth in FY25. Analysts also expect profitability for the full year and growth to continue. The mean target price is A$123.03, up 17% from the current share price.
This stock has been a quiet achiever and might just be the most under-rated company out there – certainly among WAAAX stocks. This electronic design maker has gained over 20% in 1 year and 109% in the last 5 years! Altium has always had important products, but is undergoing a transition rom desktop design software to the Cloud, and has been able to juggle transitioning and remaining a solid, profitable business. Its most recent annual results saw 19% revenue and profit growth to US$263.3m and $66.3m respectively.
Analysts expect a further 20% growth in revenues and 25% jump in profits for FY24, with similar growth projected for both FY25 and FY26. For companies with as good a record as Altium, there’s every reason to suspect growth will continue.
This stock is one of the best ways to play the growth of the Cloud. As we’ve noted before, the transition is still in early days, with spending on enterprise IT revenues easily dwarfing Cloud revenues. ReadyTech provides SaaS technologies in Australia and operates in three segments: Education, Workforce Solutions and Government and Justice – which also explain its end markets.
The company listed on the ASX in 2019 at $1.50 per share. Although it is off its all-time highs, it is still well ahead of its IPO price. Not bad considering the Tech Wreck and the disruption of a takeover offer that was ultimately rejected by shareholders. Analysts have set a 12 month target price of $4.29, a premium of over 20% to the current price. They expect revenue growth of 18% and the company’s profit to more than double in FY24.
Weebit Nano (ASX:WBT)
Weebit Nano concludes our list of best ASX Technology stocks for 2024. We know the semiconductor space is volatile, but Weebit is ideally positioned for a strong 2024. Weebit has spent several years developing a Non-Volatile Memory technology called Resistive Random Access Memory (ReRAM) that has strong potential to replace Flash memory technology, among other things.
The company is expecting to report its first revenues in February 2024 after its technology was commercialised with SkyWater. There’ll be plenty more news flow with the potential for more commercial partners to come onboard and for the technology to continue to be developed, particularly to be made available in smaller geometries (an essential step given how small electronic devices are becoming).
You can read more about Weebit here!
Disclosure: Stocks Down Under directors own shares in WBT.
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