Yahoo Finance Is MYOB Group Limited (ASX:MYO) Still A Cheap Tech Stock?
MYOB Group Limited (ASX:MYO), is a AU$1.85b small-cap, which operates in the software industry based in Australia. In the past decade, mega-tech companies, have built highly successful and ubiquitous platforms and ecosystem in which smaller companies gravitate towards. Tech analysts are forecasting for the entire software tech industry, a positive double-digit growth of 20.89% in the upcoming year , and an enormous growth of 69.28% over the next couple of years. This rate is larger than the growth rate of the Australian stock market as a whole. Today, I will analyse the industry outlook, and also determine whether MYOB Group is a laggard or leader relative to its tech sector peers. View our latest analysis for MYOB Group
What’s the catalyst for MYOB Group’s sector growth?
ASX:MYO Past Future Earnings July 30th 18 Since the regulatory environment is unlikely to become less complex, organizations will need to address the constantly evolving rules for governing data. Over the past year, the industry saw growth in the teens, beating the Australian market growth of 9.00%. MYOB Group leads the pack with its impressive earnings growth of 16.33% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 3.11% compared to the wider software sector growth hovering in the twenties next year. As a future industry laggard in growth, MYOB Group may be a cheaper stock relative to its peers.
Is MYOB Group and the sector relatively cheap?
ASX:MYO PE PEG Gauge July 30th 18 The software tech industry is trading at a PE ratio of 28.39x, higher than the rest of the Australian stock market PE of 17.37x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry did return a higher 20.59% compared to the market’s 11.85%, which may be indicative of past tailwinds. On the stock-level, MYOB Group is trading at a PE ratio of 31.07x, which is relatively in-line with the average software stock. In terms of returns, MYOB Group generated 7.19% in the past year, which is 13.40% below the software sector.
Next Steps:
If MYOB Group has been on your watchlist for a while, now may not be the best time to enter into the stock. The company is an tech industry laggard in terms of its future growth outlook, and is trading relatively in-line with its peers. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the tech sector. However, before you make a decision on the stock, I suggest you look at MYOB Group’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has MYO’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MYOB Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
