ASX-listed technology companies have recorded substantial growth in the recent years. In order to keep up to date with this ever-changing market sector, Stock Brief have compiled details of the All Tech Index, which features 50 of the top technology stocks on the ASX. While you can download the entire eBook for free using the link below, this blog series will highlight each of the companies in brief detail. Here are the top 10 ASX All Tech Index stocks by market cap.
Market Cap: $18.1 billion
Once a minnow fintech, now among the biggest shares on the ASX, buy-now pay-later operator Afterpay is an industry leader. Having recently announced plans to raise another $800 million, the company continues to drive its global expansion plans.
Headlined by underlying sales growth of 112% in FY20, the company’s most-recent quarter, a record in itself, reflected the accelerating shift to e-commerce in light of COVID-19 impacting economies right throughout the world.
While not yet profitable on the bottom line, the company expects EBITDA (excluding significant items) to be between $20-25 million in FY20. Growth is set to be driven by increased investment that may further leverage the company’s economies of scale, as well as expansion into Canada and in-store locations across the US in Q1 FY21.
REA Group (ASX:REA)
Market Cap: $14.1 billion
Categorised as a media and entertainment business, REA Group lays claim to being one of the most influential online real estate advertising companies in the nation. But that’s not the limit of the company’s focus either, with its operations spanning to property markets in Europe, Asia and the US.
With the property market playing a pivotal role in the company’s income – namely, the volume of listings posted through its real estate portal – the company has seen significant growth over recent years as Australian property prices soared. Residential listing volume is complemented by commercial and developer-focused operations related to the number of new project commencements and advertisements, as well as the provision of media, data and financial broker services. That makes REA Group a far more diversified business today than in days gone by.
Market Cap: 12.8 billion
Perhaps the most highly-functional tech product to emerge from New Zealand, Xero, a cloud-based accounting software platform, has become synonymous as a best-in-class product among small and medium-sized businesses across the globe.
During the FY20 period the company achieved 30% growth in operating revenue to $718.2 million, with total subscribers up 26% to 2.29 million. As the company continues to drive its accelerated expansion efforts abroad, overseas subscribers have begun to contribute increasingly towards the company’s overall growth.
Despite Xero posting an inaugural net profit, management have also indicated, based on early trading observations, that they expect FY21 to show some of the signs of the economic downturn that have been observed in other industries thus far.
SEEK (ASX: SEK)
Market cap: $7.7 billion
The most well-known job advertisement website in the country, Seek provides a platform connecting employers with prospective employees. With operations in numerous global markets, Seek is exposed to various employment markets in a number of regions, spanning from ANZ to Asia and Latin America. As part of its operations, Seek also operates ancillary businesses related to education, HR and contingent labour.
In recent weeks the company has begun to observe an improvement in its weekly billing results from Asia, however, it has also recorded a sizeable non-cash impairment charge of between $190-230 million as a result of COVID-19. The Asia region remains one of the company’s fastest-growing prospects, and with an extension to its debt maturity profile, and key covenant limit increases, management hope to navigate near-term constraints to find sustainable growth in the mid-term.
Computershare (ASX: CPU)
Market cap: $7.3 billion
One of the first start-up tech companies out of Melbourne to make it to the big league, Computershare has been around for over 40 years. Today the company, which is a global online share registry, is responsible for managing as many as 75 million customer records.
Computershare made its debut on the ASX all the way back in 1994 at a valuation of just $36 million. Around 80% of the company’s revenue is recurring, which provides it with a natural line of resilience in terms of its earnings capacity. That also means a higher level of visibility than other businesses in the tech space.
Beyond acting as a share registry, however, Computershare also has diversity in its operations courtesy of class action and bankruptcy administration proceedings, equity capital raisings, US mortgage services and employee share plans. Thus, the company has made the most of its significant scale, with numerous lines of diversified revenue propping up its income statement.
WiseTech Global (ASX: WTC)
Market cap: $6.7 billion
WiseTech is a leading developer and provider of software solutions to the global logistics industry. With more than 15,000 logistics companies across 150 countries on its books, including many of the world’s largest freight and 3PL providers, the company’s technology serves as a vital component in the global supply chain, executing more than 50 billion data transactions per year.
Over the past five years WiseTech Global has rolled out around 3,500 product enhancements to its software. That development, as well as execution of a regular acquisition strategy, has been largely fundamental in the company’s rapid rise to prominence since listing on the ASX in 2016. At the heart of its pitch is the value proposition that customers can efficiently digitise and rewire their supply chains to respond to change in a more agile manner. With more trade executed through integrated logistics technology than ever before, WiseTech Global is a key player in the industry.
NEXTDC (ASX: NXT)
Market cap: $5 billion
While property has its own physical value, so too does virtual property – data on the cloud. Founded in 2010, NEXTDC is an Australian data centre operator that was officially recognised by Deloitte as one of the nation’s fastest-growing technology companies, before ultimately listing in 2016. Since then, the company has worked its way into the ASX 100.
Throughout 2020 the company has continued to win various new contracts across the country, entrenching its position in the market. As more businesses shift to digital operations amid a work-from-home mandate during the COVID-19 pandemic, the need for data is becoming vital for workforces to execute their operations.
Carsales.com (ASX: CAR)
Market cap: $4.5 billion
Established in 1996, this media and entertainment business is one of the original online marketplaces that still has a stranglehold over the second-hand market for automotive, motorcycle and marine classifieds.
Carsales has made numerous acquisitions over the last decade, many of which have allowed the business to extend its scope to offshore markets. While the business previously had a majority stake in the finance operator Stratton, that holding was divested earlier in 2020.
Nonetheless, as an online classifieds site, the company’s revenue is mainly driven by lead volumes and traffic, as well as inventory. Despite the new car sales industry remaining a challenging landscape over the last two years or so, Carsales’ dominance and position in the second-hand market has underpinned the growth trajectory that has seen its share price race to an all-time high earlier this year.
Appen (ASX: APX)
Market cap: $4.4 billion
Operating in a niche segment of the machine learning industry, Appen collects, analyses and labels various forms of data that are used to continuously improve AI systems and associated products. The Software-as-a-Service provider has become a stalwart among local tech players, leveraging a global community of crowd workers to drive its operations.
As a result of the global pandemic, the company has observed an increase in search, social media and e-commerce platforms, which are target markets that Appen directly serves, notwithstanding a variation in IT expenditure over this period.
With revenue showing CAGR of 59% between 2015 and 2019, and underlying EBITDA achieving 64% CAGR over the same period – both of which were driven by strong organic growth in 2019 – Appen has a track record of high revenue and earnings growth, and is a proven supplier of high-quality speech, natural language, image, video and relevance data.
Altium (ASX: ALU)
Market cap: $4.3 billion
Formed in 1985, Altium specialises in PC-based electronics design software for engineers who design printed circuit boards. Although today the company is headquartered in the United States, the business was originally founded in Tasmania, signifying one giant leap to the bustling tech hub in San Diego, California.
The company services approximately 50,000 subscribers, with its products found everywhere from world leading electronic design teams to the grassroots electronic design community. In addition to a host of specific technology products, Altium is also expanding into systems design, which serves as a potentially lucrative growth channel for the business that now has offices spread across other locations in the US, Europe and Australasia.
More All Tech Index Stocks
We've written a quick analysis of all the companies in the index. As there are 50 companies, we've split this out into 5 posts.
- ASX All Tech Stocks 11-20 (TNE, PME, LNK, PPH, MP1, IRE, DHG, TYR, KGN, CDA)
- ASX All Tech Stocks 21-30 (EML, BVS, FCL, NEA, WEB, TPW, DTL, IRI, IFM, HSN)
- ASX All Tech Stocks 31-40 (ELO, RBL, 360, AD8, NTO, VHT, RHP, BTH, DUB, CGL)
- ASX All Tech Stocks 41-50 (CAT, RUL, LVT, PPS, CL1, ALC, PCK, NET, RAP, AMS)