Is Atturra Limited (ASX:ATA) Trading At A 26% Discount?

Atturra Limited (ASX:ATA), a technology business providing enterprise advisory, consulting, IT services, and solutions, has been the subject of speculation regarding a potential 26% discount in its share price. This article aims to analyze the company's fundamentals, performance, and sector influence to determine whether this discount is justified.



Key Fundamentals and Performance

Atturra operates in the Technology sector, which is known for its high growth potential and innovative nature. The company's key fundamentals and performance metrics are as follows:

1. Market Capitalization and ASX Rank: Atturra is a relatively small-cap company, with an ASX rank of 598 out of 2,359 (as of 2025-02-10). This indicates that the company may be undervalued compared to larger, more established peers.
2. Share Price and Performance: The company's share price and performance data are not explicitly stated in the provided information. However, Atturra has outperformed the broader ASX 200 index over the past year, with a 1-year return of +2.23%.
3. Earnings and Dividends: Atturra's EPS (Earnings per Share) is $0.035, and DPS (Dividend per Share) is $0.00. The lack of dividends suggests that the company is reinvesting profits for growth, which could be reflected in the share price.
4. Broker Consensus: Atturra is not covered by a major broker, or data from most recent compilation was omitted due to not meeting QA guidelines. The absence of broker coverage might contribute to the perceived discount, as investors may lack professional guidance on the stock.
5. Analyst Expectations: Analysts expect a sharply increasing business volume for the group, with high growth rates in the coming years. The earnings growth currently anticipated by analysts for the coming years is particularly strong, which could indicate that the stock is undervalued.

Sector Influence and Valuation

Atturra's position in the Technology sector contributes to its valuation and influences the perceived discount. The sector's growth expectations and positive analyst opinions suggest a higher valuation, but the company's specific circumstances and market conditions should also be considered when evaluating its discount.

1. Growth expectations: The Technology sector is typically associated with high growth rates. Analysts expect a sharply increasing business volume for Atturra, with high growth rates in the coming years. This expectation of strong earnings growth contributes to a higher valuation for the company.
2. Valuation metrics: The company has attractive valuation levels with a low EV/sales ratio compared with its peers. This suggests that Atturra is relatively undervalued within its sector, potentially indicating a discount.
3. Analyst opinions: Analysts have a positive opinion on Atturra, with average consensus recommending overweighting or purchasing the stock. This positive sentiment is likely influenced by the company's position in the high-growth Technology sector.

Conclusion

In conclusion, Atturra Limited (ASX:ATA) has several fundamentals that support the claim of a 26% discount, such as its small market capitalization, lack of broker coverage, and relatively low EPS. However, other factors, like positive analyst expectations and attractive valuation levels, refute this claim. The company's position in the Technology sector contributes to its valuation and influences the perceived discount. Investors should consider multiple factors when evaluating a stock's potential discount and conduct their own thorough analysis before making any investment decisions.