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What is Bell Potter’s updated view on TechnologyOne shares?

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TechnologyOne Ltd (ASX: TNE) shares closed last week with an impressive 3% gain. 

TechnologyOne is one of the largest publicly listed software companies in Australia, with offices across six countries. It develops user-friendly enterprise software products that are deeply integrated into customers’ information technology, or IT, infrastructure.

Like many software and technology companies, it experienced a heavy sell-off during the start of 2026 due to AI replacement fears. 

It has since steadied over the last month, and brokers are now viewing TechnologyOne shares as a buy-low candidate. 

Last week, the team at Bell Potter issued updated guidance on the company. 

Here’s the latest from the broker. 

All eyes on first half results 

TechnologyOne will report its first-half FY26 results on Tuesday, 19 May. 

Bell Potter expects profit before tax (PBT) growth to match the company’s earlier guidance of “high single-digit” growth.

They forecast PBT to rise 9% to $89.4 million, slightly above market consensus of 8% growth to $88.4 million.

The key area that could outperform expectations is annual recurring revenue (ARR). There is no official first-half ARR guidance, but Bell Potter and the broader market both expect ARR to grow 17% year-on-year to around $600 million.

Bell Potter assumes TechnologyOne will add about $100 million in ARR during FY26, which would match the top end of management’s 16–18% growth guidance. They expect this increase to be weighted toward the second half, with roughly $45 million added in H1 and $55 million in H2.

We believe, however, there is some chance of ARR growth exceeding $45m in H1 due to in part to the release of Plus – Technology One’s agentic AI product – and the impact this is having on product uptake by customers (e.g. James Cook University) which is driving up both NRR and ARR. 

If ARR growth does exceed $45m in H1 then this would suggest growth for the full year above $100m – given the typical H2 skew – and so could potentially lead to an upgrade of the full year guidance of 16-18% growth.

Buy rating retained for TechnologyOne shares

Based on this guidance, Bell Potter has retained its buy recommendation on TechnologyOne shares. 

The broker has also increased its target price to $32.25 (previously $31.75). 

From last week’s closing price of $28.36, this indicates an upside potential of almost 14%. 

We see the result next week as a potential catalyst given the possible positive surprise in ARR.

The post What is Bell Potter’s updated view on TechnologyOne shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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