Data#3 shares experienced a surge of 5.8 per cent in morning trade following an updated profit guidance. According to Morgans analyst Nick Harris, Data#3 has projected a first-half profit before tax of $32 to $34 million. This figure modestly surpasses analyst forecasts, with the midpoint reflecting a 1 per cent increase compared to the previous year and standing 5 per cent above consensus estimates. Data#3 is an Australian IT services and solutions provider, focusing on helping customers leverage technology to improve performance and achieve business objectives. The company offers a range of services including cloud, security, and data analytics solutions.
The company has indicated that its first-half performance will see a slightly lower skew than usual, at approximately 45 per cent. This adjustment is primarily attributed to modifications in Microsoft incentives that have impacted its software business. Despite these challenges, Data#3 maintains a positive outlook, bolstered by a diversified revenue stream derived from both enterprise and government clients.
Morgans analyst Nick Harris has emphasised that Data#3 is strategically positioned for continued growth. A key component of this strategy involves a renewed emphasis on engaging with small and medium-sized corporate clients. This targeted approach is expected to further diversify the company’s profit streams and reduce reliance on existing market segments.
Despite the positive outlook and recent stock performance, Harris has maintained a Hold rating for Data#3, with a target price of $8.30. His analysis suggests that the stock is currently fairly valued, taking into account both its current performance and future potential.