The group at Wilsons has reviewed some outcomes from the ASX 200.
tech
shares this month.
Although they have contrasting opinions regarding the performances of these companies, the outlook remains positive for both, keeping them within the focused portfolio. Below are the insights provided by the fund manager concerning these technology stocks.
Aristocrat Leisure Ltd
(
ASX: ALL
)
Wilson’s spotlighted stock in their core portfolio is Aristocrat Leisure, holding it at a 4% allocation.
The broker points out that this gaming tech firm reported a first-half performance below projections. However, it advises investors that the management had previously indicated a stronger second-half outlook, suggesting that this outcome should not have come as a major shock. The statement read:
Despite ALL not meeting projections, this can partly be attributed to a shared expectation among analysts. At their Annual General Meeting (AGM), ALL had previously highlighted several points: 1) The fee per day for H1 2025 would decrease compared to the previous year; 2) Growth in Net Profit After Tax Adjusted (NPATA) would lean more towards the second half of the year; and 3) The sale of Plarium would temporarily reduce earnings. Moving ahead, we maintain our confidence that ALL’s growth trajectory will pick up speed in the latter part of 2025.
Given these circumstances, the fund manager believes that the decline in share prices following the results presents an attractive entry point for investors. They elaborate:
Despite maintaining all of its foundational aspects, ALL appears attractively valued with a projected price-to-earnings ratio for the next 12 months sitting at 22.5 times, supported by expectations of earnings per share growing at about an 11% compound annual growth rate from fiscal year 2025 through 2030. Additionally, the company benefits from operating within a lucrative sector; specifically, its primary focus on U.S.-based land gambling continues to show robust expansion as evidenced by a five-year compounded average growth rate in gross gaming revenue reaching 7.6%. This allows ALL to outperform the overall system thanks to steady increases in market share. Moreover, this industry demonstrates remarkable durability, experiencing just three instances of contraction over the last thirty years.
Xero Ltd
(
ASX: XRO
)
Another technology stock from the ASX 200 that Wilsons includes in their Focus Portfolio is Xero. This cloud-based accounting solutions company makes up 3% of their holdings.
Wilson was pleased with the company’s performance in fiscal year 2025 and thinks this indicates that simultaneous price hikes and an increase in subscriptions can be achieved effectively.
It underscores that Xero has several options available to sustain its remarkable growth trend. The report noted this point clearly.
The financial year 2025 outcomes for Xero (XRO) underscored the resilience of its core catalysts, providing assurance to investors that it can sustain expansion in its customer count even as rates increase. Additionally, these figures indicated that leadership is effectively juggling income escalation with free cash flow production. In summary, this performance bolsters our belief in Xero’s capacity to utilise various tools at its disposal to uphold robust development within a sector that remains buoyed by trends towards cloud usage and digital overhaul.
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Motley Fool
contributor
James Mickleboro
holds stakes in Xero. Additionally, The Motley Fool Australia’s parent company, Motley Fool Holdings Inc., owns shares in and recommends Xero. Similarly, The Motley Fool Australia also holds stakes in and endorses Xero. Furthermore, The Motley Fool acknowledges this disclosure.
disclosure policy
This article includes solely general investment guidance (covered under AFSL 400691). Authored by Scott Phillips.
