Here are three ASX tech stocks you might not have heard of.
Integrated Research Limited (ASX: IRI)
Integrated Research describes itself as the leading global provider of proactive performance management software for critical infrastructure, payments and communication ecosystems. The company has been operating since 1988 and now has over 250 employees across five countries with 1,000 organisations as clients in more than 60 countries -– some of them being Fortune 500 businesses.
Integrated Research crossed over $100 million in revenue during FY19 and recorded a net profit of $21.5 million. The company continues to fly under the radar of most investors despite it being a reliable dividend payer, having consistently grown profits in recent years.
A high proportion of revenue is recurring in nature which helps to make earnings/profits more predictable for valuation purposes.
Trading on a P/E multiple of 24x, IRI shares might be a touch expensive despite good prospects for continued growth.
Serko Ltd (ASX: SKO)
Serko is a leading online travel booking and expense management software provider with over 6,000 corporate clients, including the likes of Telstra Corporation Ltd (ASX: TLS).
Shares in Serko have come off roughly 15% since peaking at $4.33 a little more than a month ago. There has been no news out of the company that would readily explain the share price decline and it may just be a case of investors taking profits as the share price had been on a strong run in the first half of 2019.
Serko recorded impressive revenue growth of 28% in FY19 and management expect to deliver revenue growth of 20%-40% in the current financial year.
If management can deliver, the recent pullback in the share price may serve as an opportunity for investors to pick up a high growth share at a reasonable price.
Xref Ltd (ASX: XF1)
Xref is a Sydney-based human resources technology company that allows prospective employers to seamlessly and professionally conduct pre-employment reference checks on suitable candidates via an online candidate-referencing system.
Customers include the likes of Uber and Westpac Banking Corp (ASX: WBC), which may help to provide some further legitimacy to the business.
Overall, Xref users have been growing at a fast rate and the business is progressing nicely towards profitability as they scale up at high gross margins.
The share price has fallen nearly 50% from its 12-month high back in May which may make this the perfect time to open a small position in the fast growing tech company.
Integrated Research is clearly the most stable and arguably the highest-quality business of the three shares mentioned, as it is already profitable and paying consistent dividends. This would make it my top pick of the trio. However, I think Serko and Xref both have compelling stories and warrant further research.
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At the time of publishing, Luke has no financial interest in any companies mentioned.