I do believe that the valuation of a number of technology companies are in transition. This includes Objective and Technology One. They have valuations which have significant growth factored in. I think Objective are doing a better job of transition, whereas Technology One are just hosting software in the cloud. Despite these significant transitions for these companies they have significant contracts in government. Their biggest issue is whether their customers will follow them on their journey, or opt out and buy one of the new native cloud solutions that were only ever designed for the cloud.
I think if things go well their valuations will work out, but as we have seen with recent results both Objective and Technology One have disappointed the market. They have both said they will improve, but for investors we need to understand whether this is a temporary blip, or a trend developing.
OCL Price at posting:
$2.89 Sentiment: Buy Disclosure: Held
(20min delay)
