Shares in computer hardware and software distributor Dicker Data Ltd (ASX: DDR) are edging lower in today’s session, now trading down 0.9% at $13.24 apiece.
The Dicker Data share price has lost support in the last few months, tumbling from a high of $15.60 back in early November.
While there’s been nothing remarkable from the company in that time, ASX tech shares have led the broad market losses this year. That’s amid a widespread tremor in global equity markets since December.
Dicker Data certainly hasn’t been immune to the selloff. Its shares hit 3-month lows of $12.05 just last week.
However, there’s life in the company’s stock once again with its share price gaining 5.56% in the past week.
Let’s take a look at what’s behind the price action.
What’s up with the Dicker Data share price this week?
Even as Dicker Data struggled in January, in the past few days, its shares have reversed course and rallied as much as 11% since Australia Day last week.
As well, the company also released an update today regarding a new distribution agreement with Autodesk, Inc (NASDAQ: ADSK) for Australia and New Zealand (ANZ). While the announcement isn’t price-sensitive, it contains important updates regarding Dicker Data’s growth plans.
Specifically, the company advised it has been appointed as the non-exclusive Autodesk distributor for both the ANZ regions. It’s part of a 3-year deal that took effect yesterday, 1 February.
“Whilst it is not possible to quantify the revenue impact the new distribution agreement will have at this stage, it is expected to be material and significant over the course of the three-year period,” the company said.
This deal follows Autodesk’s strenuous review and planning process underway in recent months. It saw the company consolidate its ANZ distributors to just 1 entity. Dicker Data first began distributing Autodesk in 2014 following the acquisition of Express Data Holdings.
Dicker Data chair and CEO David Dicker commented on the agreement:
This is a particularly satisfying outcome for our company that clearly demonstrates our strength in software and subscription distribution models.
It’s pleasing to see these strengths recognised at a global and regional level with the confidence technology giants such as Autodesk, and others, place into us as their only distributor in ANZ.
The recent price action in Dicker Data shares has caught the attention of analysts at Evans & Partners, according to a recent note from the broker.
Its analysts initiated coverage of Dicker Data with a “positive” rating – akin to a bullish stance.
Evans & Partners values the company at $15.10 per share, suggesting a potential upside of 13%.
The consensus price target on Dicker Data is also conveniently $15.10 per share, according to Bloomberg Intelligence.
Dicker Data share price snapshot
In the last 12 months, the Dicker Data share price has gained more than 15% after a strong display in 2021.
This year to date, however, the company’s shares have plunged 10%. Hence, this week’s gains provide welcome respite for Dicker Data shareholders.
The post Here’s why the Dicker Data (ASX:DDR) share price is having such a great week appeared first on The Motley Fool Australia.
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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Autodesk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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