The company has lost its largest SMA platform client, ANZ Private, to a rival operator. Morgans observes the loss is further evidence of the intense competition throughout the investment platform industry. Praemium’s separately managed account technology is widely regarded as one of the best platforms available.
Morgans downgrades forecasts to reflect the loss of the business, partly offset by new client wins. The business trades on high multiples of earnings and thus needs to maintain a high level of revenue growth to sustain the current share price, the broker believes.
As the stock trades at a discount to valuation the broker maintains an Add rating. Target is reduced to $0.60 from $0.87.
Sector: Software & Services.
Target price is $0.60.Current Price is $0.42. Difference: $0.18 – (brackets indicate current price is over target). If PPS meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).
