Tag: Stock pick

Air New Zealand Ltd (ASX: AIZ) shares are falling on Thursday after the airline handed investors a disappointing update.

At the time of writing, the Air New Zealand share price is down 4.23% to 34 cents.

The latest fall adds more pain to a weak year for shareholders. The stock is now down 33% in 2026 and 39% over the past 12 months.

Here’s why investors are selling today.

Fuel costs smash the outlook

In its market update, Air New Zealand said elevated and volatile jet fuel prices have had a significant impact on its FY26 outlook.

The airline now expects a loss before tax of NZ$340 million to NZ$390 million for FY26.

In FY25, Air New Zealand reported pre-tax profit of NZ$216 million, so the downgrade points to a major earnings swing.

A big part of the problem is jet fuel, which has become far more expensive in recent weeks.

Air New Zealand said jet fuel prices were around US$85 to US$90 per barrel before the recent Middle East conflict. Since then, prices have traded between roughly US$160 and US$230 per barrel.

The company said it expects its second-half fuel cost to be about NZ$980 million, compared with around NZ$740 million assumed at the interim result.

Including hedging, the higher fuel bill has added a NZ$240 million headwind to the expected FY26 result.

Demand has also cooled

Fuel is not the only problem weighing on the outlook.

Air New Zealand said booking momentum has moderated in recent weeks, after initially tracking ahead of FY25.

The weakness is showing up in several parts of the network. Domestic and Trans-Tasman demand have softened, while outbound demand to some long-haul markets has also weakened.

North America outbound demand has been more mixed, while Asia inbound and cargo have held up better.

The airline has responded by making 3 targeted capacity cuts. Overall group capacity has now been reduced by around 3% to 5% across its networks.

Air New Zealand has also lifted fares to help recover some of the higher fuel costs. But the company said trying to recover the full impact over a short period could put more pressure on demand.

Balance sheet still gives some support

There were still a few points of support in the update.

Air New Zealand said it still has around NZ$1.3 billion in total available liquidity. This includes an undrawn NZ$250 million syndicated standby facility.

The airline is also finalising a US$400 million secured revolving credit facility, backed by part of its unencumbered aircraft pool.

Once completed, the company said the facility would lift pro-forma liquidity by about NZ$670 million.

Management also said it is not currently considering any capital transactions, which may give investors some comfort after the earnings downgrade.

Cost savings are also being targeted. Air New Zealand has identified up to NZ$100 million of annualised savings so far, with benefits expected through FY27 and beyond.

The post Air New Zealand shares sink as investors brace for a major loss appeared first on The Motley Fool Australia.

More reading

• Why Graincorp, Air New Zealand and Megaport shares are turning heads on Thursday
• Air New Zealand flags sharp FY26 loss as rising fuel costs bite
• Air NZ warns of ‘fuel shock’, what this means for Qantas shares

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

Artrya (ASX: AYA) shares could be worth considering if you are searching for exposure to artificial intelligence (AI).

That’s the view of analysts at Bell Potter, who are bullish on the ASX AI stock.

What is the broker saying about this ASX AI stock?

Firstly, in case you are not familiar with Artrya, it is a medical technology company using AI-powered image-analysis software to improve the detection and management of coronary artery disease (CAD).

Bell Potter notes that CAD is driven by soft plaque that builds up silently in the arteries and ruptures without warning, causing a fatal heart attack. Traditional cardiac diagnostics often fail to detect this hidden risk, and in over 50% of the population, the first sign of the disease is sudden death.

This condition affects around 126 million people globally each year, causing around 9 million deaths, with the vast majority of patients experiencing no warning signs.

This gives the ASX AI stock a very large market opportunity.

A recent note reveals that Bell Potter has been pleased with Artrya’s progress in 2026 and is optimistic on its outlook. It said:

Following completion of onboarding Tanner Health’s five hospitals, scanning has now commenced, with monthly scan volumes increasing through the quarter. Reimbursement and back-office processes are in the final stages of completion. Both NGHS and Cone Health are working through onboarding processes and expect to be ready for scanning patients for anatomy and plaque by the beginning of FY27.

The Blood Flow (FFRCT / SCF) module is being prepared for submission to the FDA under the 510(k) submission, with a 1H27 targeted commercial rollout. Training materials and reimbursement administration are being addressed in anticipation of the commercial rollout to foundational customers. Contracting and ethics approval submissions are in progress at all six SAPPHIRE study partners, with an initial Principal Investigator meeting schedule for July 2026.

Should you invest?

According to the note, Bell Potter has a buy rating and $6.10 price target on the ASX AI stock.

Based on its current share price of $4.87, this implies potential upside of 25% for investors over the next 12 months.

Commenting on its buy thesis, the broker said:

AYA’s first customer has now progressed to scanning patients and the other two foundational customers should be ready for the beginning of FY27. AYA is progressing as expected, and the key catalyst now is disclosure of quarterly scan volumes.

Verification of scan volumes is necessary to prove out our model assumptions and validate the investment thesis of a fundamental shift in the diagnostic method of CAD. AYA’s share price has increased c.6x since this time last year, implying a successful rollout and high degree of growth. Yet, given the nature of the value proposition, proof of commercial execution is likely to keep valuation metrics elevated.

The post Which exciting ASX AI stock is a buy according to a leading broker? appeared first on The Motley Fool Australia.

More reading

• 2 exciting ASX shares to buy with big growth potential!
• Why Artrya, Cleanaway, DroneShield, and Nuix shares are pushing higher today
• Bell Potter just initiated coverage on this ASX AI stock with a buy rating

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

Shares in oOh!media Ltd (ASX: OML) were trading solidly higher on Thursday after the company released a positive trading update ahead of its annual general meeting.

Strong quarterly performance

Shares in the company were more than 4% higher at $1.35 apiece, after the company said in a statement to the ASX that it was expecting first-quarter revenue growth of 7% for Australia and 4% for the group, slightly ahead of projections from February.

oOh!media said its Operational Excellence program and its exit from retail media delivered a 9% headcount reduction and $12 million in annualised savings from FY27.

The company said on the downside that first-half gross margins would be softer than anticipated.

oOh!media Managing Director James Taylor said:

The Out of Home sector continues to benefit from strong structural growth, and we are executing our strategy to cement oOh!’s market leadership. The launch of MOVE is a growth catalyst, clearly demonstrating the superior quality and unmatched scale of our network to advertisers. “Since February we have identified $12 million in annualised FY26 run rate pre-tax cash savings and an array of related operational benefits. This unlocks further value for our customers and shareholders. While we note some advertiser uncertainty given the broader macro environment, we are pleased with our overall outlook and look forward to updating shareholders at this morning’s AGM.

Takeovers remain in play

The updates come following two recent takeover offers lobbed for the company by I Squared Capital for $1.45 per share, and by Pacific Equity Partners for $1.40 per share.

Chair Tony Faure told the company’s annual general meeting on Thursday that “the Board, together with our advisers, has considered and unanimously determined that they do not adequately reflect the intrinsic value of oOh!”.

He added:

However, we are prepared to engage with all parties to assess whether any proposal may emerge that is capable of being recommended by the Board. oOh! will provide parties with access to a limited amount of due diligence information to enable them to assess revised proposals that may be capable of the Board’s recommendation. We are committed to moving at pace as we evaluate the offers, with a firm focus on achieving the best outcome for shareholders.   

Mr Faure said oOh!media was also engaging with other parties regarding a potential change of control transaction.

oOh!media shares have traded as high as $1.83 over the past 12 months and as low as 84.5 cents.

The ASX media company is valued at $686.7 million.

The post This takeover target is beating forecasts, sending shares in the ASX media company higher appeared first on The Motley Fool Australia.

More reading

• This ASX media company has attracted a second takeover offer. Let the bidding war begin
• Why 29Metals, Aurelia Metals, Codan, and oOhMedia shares are racing higher today
• oOh!Media shares rocket 40% higher on takeover offer

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

Worley Ltd (ASX: WOR) shares are climbing on Thursday after the engineering services group announced a fresh capital management update.

At the time of writing, the Worley share price is up 2.09% to $12.22.

That gives shareholders some relief after a soft run in recent times. Worley shares are still down around 3% in 2026 and 8% over the past year.

Let’s take a closer look at what was announced.

Worley returns more cash

According to the release, Worley announced a new on-market share buyback of up to $300 million.

The company said this follows the successful completion of an earlier $500 million buyback program in April.

The new buyback could cover about 5.1% of shares on issue, depending on market conditions and the share price.

Worley said the decision reflects the board’s confidence in the company’s financial position and growth outlook.

It also adds to the company’s recent capital returns, with Worley continuing to pay dividends alongside the buyback.

The stock currently pays a dividend yield of 4.09% to shareholders.

Growth targets remain in focus

Worley used its Investor Day presentation to outline its medium-term growth outlook. The company is targeting double-digit underlying EBITA growth through to FY30.

Management said the business is being supported by major investment trends across energy, chemicals, resources, and critical infrastructure.

That includes areas such as LNG, energy transition materials, power, data centres, nuclear, industrial water, and ports.

Worley also said it is investing $70 million over the next two years in digital and AI capabilities.

The aim is to lift productivity and help the company deliver larger, more complex customer projects across the asset lifecycle.

Cost savings are also ahead of plan. Worley said $95 million of initiatives have already been actioned, with another $25 million underway.

That takes the savings program above its initial $100 million target.

Guidance pressure has not gone away

Worley has not had an easy year.

The company said its expected conflict-related tension in the Middle East had delayed project timelines and hurt revenue and new work.

In April, Worley said it still expected FY26 underlying EBITA to be within its previous guidance range of $800 million to $850 million.

But it now expects to finish at the lower end of that range.

Worley’s backlog was $16.9 billion at the end of March, up 2% from December.

Foolish Takeaway

The $300 million buyback gives investors something immediate to focus on after a weak year for the share price.

But Worley still needs to prove it can turn its pipeline and cost savings into stronger earnings.

Investors will get a clearer view when the company reports its full-year results on 26 August.

The post Worley shares jump as another $300 million buyback lands appeared first on The Motley Fool Australia.

More reading

• Worley unveils new growth strategy and $300m buyback at Investor Day
• Why these 2 ASX 200 heavyweights just got a big buy call
• Up 329% in a year, ASX All Ords mining stock surging again today on big Worley news
• Buy, hold, sell: CBA, South32, and Worley shares
• Is this ASX 200 share a sell after announcing a $30-40 million EBITA hit?

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

The All Ordinaries Index (ASX: XAO) is down 0.2% at time of writing today, but that’s not keeping this ASX All Ords silver share from posting another day of gains.

The outperforming miner in question is Andean Silver Ltd (ASX: ASL).

Andean Silver shares closed yesterday trading for $2.44. In late morning trade on Thursday, shares are changing hands for $2.485 apiece, up 1.8%.

Taking a step back, Andean Silver shares have surged a whopping 151.9% over the past 12 months, smashing the 4.1% one-year gains delivered by the benchmark index.

Part of that strong outperformance has been driven by the surging silver price. Currently fetching US$87.56 (according to data from Bloomberg), the silver price has gained 171% since this time last year.

And Andean Silver has hardly been sitting idle.

Here’s what the miner just reported.

ASX All Ords silver share lifts on high-grade results

Andean Silver shares are marching higher today after the miner announced promising results from its Cerro Bayo Silver-Gold Project, located in Chile.

The ASX All Ords silver share said that the discovery of “bonanza-grade veins” beyond current resources is paving the way for ongoing resource growth at Cerro Bay.

Top vein chip sample results from the latest exploration activities include 5,643 grams of silver per tonne equivalent.

The miner also reported sawn channel results, which included 0.8 metres at 1,1184 grams of silver per tonne equivalent (or 13.3 grams of gold per tonne equivalent).

Promisingly, the company said that these targets are located just 200 metres from the Laguna Verde processing facility.

Andean Silver expects to deliver a Mineral Resource Estimate update for Cerro Bay in June. It noted that economic studies are underway.

What did Andean Silver management say?

Commenting on the exploration results boosting the ASX All Ords silver share today, Andean Silver CEO Matthew Allen said, “These results continue to demonstrate the scope to grow the Cerro Bayo resource, with the discovery of more high-grade silver-gold veins over extensive lengths.”

Looking ahead, Allen added:

We continue to generate a compelling pipeline of drilling targets identified by mapping, sampling and a re-evaluation of the geological data at Cerro Bayo.

There is a direct link between resource growth and the value we create for our shareholders. This is why we have four rigs drilling to increase and upgrade the existing resources. And we plan to further ramp up drilling while advancing the mine study phase.

The post Up 152% in a year, guess which ASX All Ords silver share is leaping again on ‘bonanza-grade’ results appeared first on The Motley Fool Australia.

More reading

• Why Megaport and Xero shares are making the headlines today with big moves
• Why has this ASX copper stock surged to a new 12-month high?
• Which Australian ETFs would be top buys this month?
• Is the TechnologyOne share price an opportunity too good to pass up?
• Why on earth is the Bapcor share price crashing 21% on Thursday?

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

There have been some big moves on the Australian share market on Thursday.

Two ASX shares that are in the headlines for different reasons are named below. Here’s what you need to know about them:

Megaport Ltd (ASX: MP1)

The Megaport share price is up 30% to $12.90 after the network solutions company announced another major contract win for its Latitude.sh business.

Latitude.sh secured three major GPU, CPU, network, and storage contracts across two customers.

The company believes this reinforces Megaport’s position as a critical infrastructure partner in the accelerating AI ecosystem.

According to the release, the contracts represent a combined total contract value (TCV) of approximately US$182.9 million (A$254 million), representing approximately US$65.2 million (A$90.6 million) in annualised recurring revenue (ARR).

Two of the contracts, representing approximately 90% of the TCV, have 36-month initial terms, while the third contract has a 24-month contract term.

Megaport’s CEO, Michael Reid, said:

We are at the forefront of an accelerating inflection point across the industry. As use cases shift from AI foundation models to inference and the edge, Megaport is becoming an essential platform for powering the applications of tomorrow with globally distributed, automated infrastructure.

Whether supporting AI, edge compute, or anyone requiring instant global reach and performance, Megaport is a one-stop platform for the AI ecosystem, providing on-demand, software-enabled performance of dedicated hardware with the flexibility of a global network.

Xero Ltd (ASX: XRO)

After initially charging higher, Xero shares have hit reverse and tumbled deep into the red. The cloud accounting platform provider’s shares are down 9% to $73.74 at the time of writing.

This has been driven by the release of the company’s FY 2026 results this morning.

Xero reported a 31% increase in operating revenue to $2.75 billion, an 18% lift in adjusted EBITDA to $757.4 million, and a 37% jump in annualised monthly recurring revenue (AMRR) to $3.27 billion.

This was driven by a 0.5 million increase in net customers to 4.92 million globally. Its growth was particularly strong in the key US market.

Commenting on the result, Xero’s CEO, Sukhinder Singh Cassidy, said:

Our strong full year results demonstrate Xero’s disciplined execution and macro-resilience. Our 3×3 strategy is hitting its stride, demonstrated by accelerating US growth with 110,000 new customers, including new Melio direct payments customers, and pro-forma revenue growth of 50%. We have powerful momentum across our markets, and delivered strong EBITDA growth while absorbing Melio.

This has moved us beyond single-job workflows in the US by integrating Melio to unite accounting and payments on one platform. Globally, we are providing a small business financial operating system for the AI era, driving value for customers while deepening our technology foundations, compliance capability and data advantages, and driving stronger unit economics.

So, why the selling? Well, although Xero’s result beat consensus estimates across most metrics, Citi notes that its profit was a miss due to higher R&D capitalisation.

The post Why Megaport and Xero shares are making the headlines today with big moves appeared first on The Motley Fool Australia.

More reading

• Why Xero shares are falling despite a big jump in revenue
• Megaport secures $254 million in contracts, boosts ARR and outlook
• Xero FY26 result: Revenue surges 31% but profit dips due to Melio acquisition costs
• 5 things to watch on the ASX 200 on Thursday
• Top brokers name 3 ASX shares to buy now

Motley Fool contributor James Mickleboro has positions in Megaport and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in ASX copper company Carnaby Resources Ltd (ASX: CNB) hit a fresh 12-month high after the company announced it had made a significant discovery during recent drilling.

Mining project likely to expand

The company said in a statement to the ASX that it had struck a copper grade of 7.1% copper equivalent over a 19m intersection during drilling at the Trek 1 Footwall Lode.

The company said the new drilling confirmed the discovery of a significant new deposit, adding to drilling results first reported late last year, with the new lode also open down plunge and along strike to the north.

Carnaby Managing Director Rob Watkins said of the discovery:

These fantastic results from the new Trek 1 Footwall Lode discovery have completely opened up the Trek 1 deposit beneath the Ore Reserve pit design. We are looking at a completely new mineralised structure that links off the Main Lode in a more favourable northerly strike and may indeed be the primary driver of the Trek 1 deposit. The Footwall Lode has only been intersected in a handful of holes to date. In addition to the 400m extension discovery of the Main Lode, the Trek 1 Footwall Lode discovery is outside of the existing Mineral Resource.

Mr Watkins said the company would incorporate the new results from the main and footwall lodes into an updated mineral resource estimate and also perform open-pit optimisations and underground scoping studies in the second half of the year.

He said Carnaby remains on track to complete the feasibility study for the project by mid-year, prior to a final investment decision, and was targeting first ore production in the second half of the year from the Greater Duchess project.

The company said there was scope for the size of the open pit at Trek 1 to increase in size, given the new drilling results.

The new drilling was part of an overall 3000m drilling campaign.

Positive study already released

Carnaby released a pre-feasibility study for the project in March, envisaging a mine which would operate for 12 years with a payback period of just 13 months.

The mine was expected to produce a total of 165,000 tonnes of copper equivalent.

Carnaby shares traded as high as 65 cents on the news on Thursday morning before settling back to be 10.9% higher at 61 cents.

The 65-cent mark is a new 12-month high, with the company’s shares having traded as low as 27 cents over the past year.

Carnaby Resources is valued at $151.9 million.

The post Why has this ASX copper stock surged to a new 12-month high? appeared first on The Motley Fool Australia.

More reading

• Up 152% in a year, guess which ASX All Ords silver share is leaping again on ‘bonanza-grade’ results
• Why Megaport and Xero shares are making the headlines today with big moves
• Which Australian ETFs would be top buys this month?
• Is the TechnologyOne share price an opportunity too good to pass up?
• Why on earth is the Bapcor share price crashing 21% on Thursday?

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

Australian shares have had a mixed run recently, with some parts of the market holding up well and others coming under pressure.

For investors who want local exposure without trying to pick every individual winner, exchange-traded funds (ETFs) can make a lot of sense.

They offer diversification, simplicity, and access to different slices of the market. Some focus on broad index exposure. Others tilt towards quality or income.

Three Australian ETFs I think look like top buys this month are featured in this article.

Vanguard Australian Shares Index ETF (ASX: VAS)

The first ETF I would consider is the Vanguard Australian Shares Index ETF.

It is one of the simplest ways to invest in the Australian share market. It gives investors exposure to a broad basket of ASX shares across banks, miners, healthcare, retail, industrials, infrastructure, and more.

That broad exposure is the main attraction.

Instead of trying to decide whether Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES), or Macquarie Group Ltd (ASX: MQG) will be the best performer over the next year, investors can own a slice of many of them through one fund.

I think that is especially useful when the market outlook is uncertain.

Australia is dealing with higher inflation, rising interest rates, pressure on household budgets, and a more volatile global backdrop. In that kind of environment, I like the idea of spreading risk across many companies rather than relying too heavily on one view.

For investors wanting a core Australian holding, I think VAS remains hard to beat.

Betashares Australian Quality ETF (ASX: AQLT)

The second ETF I would consider is the Betashares Australian Quality ETF.

This is a more targeted option than the VAS ETF.

It focuses on Australian companies with quality characteristics. That can include strong profitability, balance sheet strength, and more resilient earnings.

I like this approach because the ASX can be quite cyclical.

Banks are exposed to credit conditions and housing. Miners are exposed to commodity prices. Retailers are exposed to consumer spending. Property shares are exposed to interest rates.

A quality filter can help investors tilt their portfolio toward businesses that may be better placed to handle different market conditions.

That does not mean the AQLT ETF will outperform every year. Quality shares can still fall, especially if valuations are high or market sentiment turns against them.

But over the long term, I think focusing on better businesses is a sensible way to invest.

It could be a useful complement for nvestors who already own a broad Australian ETF. It adds a more selective layer to local share market exposure.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The third ETF I would look at is the Vanguard Australian Shares High Yield ETF.

It is designed for investors who want more income from Australian shares.

It focuses on companies with higher expected dividend yields, which can make it attractive for retirees, income investors, or anyone wanting their portfolio to generate cash flow.

I think this could be useful in the current environment.

With inflation still a concern, investors may want assets that can produce a meaningful income stream. Australian shares have long been popular for dividends, particularly because many companies pay franked dividends.

The VHY ETF can provide exposure to dividend-paying sectors such as banks, miners, insurers, and other mature businesses.

Of course, investors need to remember that high-yield investing comes with risks. Dividends can be cut, and high yields can sometimes reflect market concern about a company’s outlook.

That is why I would use this Vanguard ETF as part of a diversified portfolio rather than relying on it alone.

Foolish takeaway

For investors looking at Australian ETFs this month, I think these three all have something useful to offer.

The VAS ETF provides broad market exposure, the AQLT ETF adds a quality tilt, and the VHY ETF focuses on income.

Used together, they could give investors a simple way to access Australian shares across growth, quality, and dividends.

There will still be volatility, especially with inflation, interest rates, and global uncertainty affecting markets. But for long-term investors, I think these three ETFs could be strong options to consider.

The post Which Australian ETFs would be top buys this month? appeared first on The Motley Fool Australia.

More reading

• Why Aussie investors are pouring into international ASX ETFs
• Are these ASX ETF giants still worth buying today?
• 3 ASX ETFs that could be top picks for beginners
• After surging nearly 200%, is this the best ASX ETF in 2026?
• 3 ASX ETFs for investors in their 60s

Motley Fool contributor Grace Alvino has positions in CSL, Commonwealth Bank Of Australia, Vanguard Australian Shares Index ETF, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended BHP Group, CSL, Vanguard Australian Shares High Yield ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The TechnologyOne Ltd (ASX: TNE) share price has risen in recent weeks, but the business is still down 33% from its former all-time high in June 2025, as the chart below shows.

When a great business like TechnologyOne is down – and it’s down 18% in the last six months – I think it’s a great time to look at the stock as a potential opportunity.

The company describes itself as Australia’s largest enterprise software company, with a global presence. It has more than 1,300 subscriber customers which includes leading businesses, government agencies, local councils, and universities.

There are a few reasons why I think this business could be a top buy. Let’s get into it.

Great revenue growth

I think one of the most fundamental drivers of the TechnologyOne share price over time is whether its revenue is growing at a satisfactory pace.

Net profit growth is essential to send the underlying value of a business higher, with revenue being an important factor for that.

The world is becoming increasingly digital and this is a strong tailwind for TechnologyOne. The company is growing revenue in multiple ways.

Winning new subscribers is an important element – it has done very well in Australia and now it has its sights on markets like the UK, which has a similar sort of list of organisations such as councils, businesses, schools, universities and government. It recently won two important London councils, which I think bodes well for the future.

Another element of growth is how the company unlocks more revenue from its subscribers by investing in improving its software offering for customers. This is one of the main reasons why TechnologyOne is able to consistently deliver double-digit annual recurring revenue (ARR) growth each year.

In FY26, it expects to grow its FY26 ARR by between 16% to 18%, with the company targeting the top end of the guidance range.

Rising profit margins

As a software business, the company is able to tap into pleasing scale benefits where revenue can grow faster than expenses.

As I mentioned earlier, net profit is the ultimate driver of shareholder returns, so improving profit margins helps the business grow at a faster pace.

TechnologyOne expects to grow its profit before tax (PBT) in FY26 by between 18% to 20%. This impressive projection is, according to management, down to its software as a service (SaaS) offering and its products being turbocharged through AI.

The ASX share says that it’s delivering improving margins from significant economies of scale, with the profit before tax margin expected to increase to at least 35% in the long-term.

I think this bodes very well for the future as it builds towards its ARR target of $1 billion by FY30.

Compelling TechnologyOne share price valuation

According to the projection on Commsec, the business is forecast to deliver earnings per share (EPS) of around 50 cents in FY26 and 59 cents in FY27.

That means it’s currently trading at 57x FY26’s estimated earnings and 48x FY27’s estimated earnings.

While this isn’t as cheap as it was a few weeks ago, I think the business has an incredible future ahead and I think it’s undervalued by the market because of AI concerns. I think the company’s economic moat, reputation and customer service will allow it to stay ahead of any rivals and continue to grow profit.

The post Is the TechnologyOne share price an opportunity too good to pass up? appeared first on The Motley Fool Australia.

More reading

• Why these ASX 200 tech shares could beat the market over the next decade
• Buy, hold, sell: TechnologyOne, Telstra, and Woodside shares
• Top brokers name 3 ASX shares to buy next week
• 3 super ASX tech stocks I’d buy in May with $3,000
• $10,000 invested in these ASX 200 shares 10 years ago is worth…

Motley Fool contributor Tristan Harrison 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.

The Bapcor Ltd (ASX: BAP) share price is getting hammered today.

Shares in the embattled S&P/ASX 300 Index (ASX: XKO) auto parts company closed yesterday trading for 51.5 cents. In earlier trade, shares just plunged to 40.5 cents each, down 21.4%. At time of writing, shares have recovered a touch, changing hands for 42.0 cents each, down 18.5%.

For some context, the ASX 300 is down 0.1% at this same time.

Unfortunately for longer-term shareholders, today’s sharp sell-off isn’t unique for the stock. Indeed, the Bapcor share price is now down a steep 92.2% since this time last year.

Here’s what’s got investors reaching for their sell button today.

Why is the Bapcor share price in free fall?

The ASX 300 auto parts company is taking a hit after releasing a trading update.

The company reported achieving positive sales momentum between February and April from the turnaround activities intended to restore growth.

However, the Bapcor share price is under heavy pressure, with management noting that the company’s trading performance for the second half of FY 2026 has been negatively impacted by the Middle East conflict.

Bapcor noted that trading conditions have “materially deteriorated” since late March. The headwinds have been fuelled by the Iran war as well as increasing interest rates.

Higher Aussie interest rates have led to a strong Australian dollar relative to the New Zealand dollar, which the company noted is negatively impacting the earnings of its New Zealand business segment.

As such, the ASX 300 stock downgraded its full year FY 2026 earnings guidance from what it provided on 26 February, two days prior to the outbreak of the Iran war.

Bapcor now expects to deliver FY 2026 underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $144 million to $150 million (post AASB16). That’s down from prior guidance of $150 million to $160 million.

Pre AASB16 (which accounts for leases), Bapcor now expects full year underlying EBITDA of $62 million to $68 million, down from previous guidance of $74 million to $79 million.

What did management say?

Commenting on the trading update that’s crushing the Bapcor share price today, CEO and managing director Chris Wilesmith said:

We are pleased with the positive momentum of the turnaround, which has been delivered through decisive actions we’ve taken to improve pricing, stock availability and team engagement.

This is despite the challenging external environment which was not contemplated when we began this turnaround, and which has slowed the rate of improvement contemplated in our previous guidance. We will continue driving initiatives during the important trading months of May and June.

The post Why on earth is the Bapcor share price crashing 21% on Thursday? appeared first on The Motley Fool Australia.

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