Does Bell Potter think TechnologyOne shares are a buy?

TechnologyOne Ltd (ASX: TNE) shares are rebounding on Wednesday.

In morning trade, the enterprise software provider’s shares are up over 6% to $29.59.

This has wiped out yesterday’s post-results decline and added some more.

The catalyst for this could have been a broker note out of Bell Potter, which recommended investors snap up the ASX 200 tech stock while it was down.

What is the broker saying?

Bell Potter was pleased with the company’s performance during the first half of FY 2026, highlighting that its result was in line with expectations and slightly ahead of consensus estimates. It said:

[First half] FY26 PBT of $89.1m was in line with our forecast of $89.4m and c.1% ahead of VA consensus of $88.4m. Revenue of $318m was 3% below our forecast of $328m but was made up at PBT with a higher-than-expected margin of 27.6% vs our forecast of 26.7%. ARR of $598m was modestly below our forecast of $600m but close to in line with VA consensus of $599m.

Technology One noted the result was negatively impacted by forex and, for instance, ARR on a constant currency basis would have been $604m and the growth would have been 19%. Similarly the NRR would have been c.200bps higher at 116% vs 114% and the PBT margin would also have been c.50bps higher at 28.1% vs 27.6%.

Looking ahead, management’s guidance for the full year was also in line with expectations. It adds:

Technology One reiterated its FY26 guidance of 18-20% PBT growth and 16-18% ARR growth. The company said it was targeting the top end of both ranges. We were already at the top end of both ranges so there is little change in our FY26 forecasts albeit we have reduced our revenue forecast by c.1% but offset this with an increase in our PBT margin forecast from 31.8% to 32.3% (which is also consistent with the guidance of a c.200bps increase in the margin relative to 30.3% in FY25).

We have similarly downgraded our FY27 and FY28 revenue forecasts by c.1% but offset this with increases in our margin estimates so there is little change at PBT. Notably we continue to forecast PBT of 20% in each of FY26, FY27 and FY28.

Should you buy TechnologyOne shares?

In response to the results, Bell Potter has reaffirmed its buy rating and $32.25 price target on TechnologyOne’s shares.

Based on its current share price, this implies potential upside of approximately 9% for investors over the next 12 months.

In addition, a 1.2% dividend yield is expected, boosting the total potential return to around 10%.

Commenting on its buy recommendation, the broker said:

With little change in our forecasts there is no change in our TP of $32.25 and we maintain our BUY recommendation. There is perhaps a lack of short term catalysts for the stock but we believe the stock should continue to perform well given it is in our view the best positioned tech stock on the ASX to benefit from rather than be disrupted by AI. We also see very little if any downside risk to the guidance given the high level of SaaS and recurring revenue (c.93% of total revenue in H1), good visibility and strong pipeline.

The post Does Bell Potter think TechnologyOne shares are a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Technology One. 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.