The Australian tech sector has seen its fair share of winners, and one company that has stood out over the past year is TechnologyOne Ltd (ASX: TNE). Investors who got in early have enjoyed a remarkable run, with the ASX tech stock surging almost 100% in just 12 months.

At its lowest point in the past year, shares of TechnologyOne were trading for $15.52. Fast forward to today, and they’ve climbed to $30.84—a staggering gain. Earlier this month, the stock even hit $32.64, meaning anyone who bought at the lows last year could have more than doubled their investment.

But after such an impressive rally, the big question remains: Is there still value left in this ASX tech stock? Let’s take a closer look at whether TechnologyOne is still a buy or if investors should wait for a better entry point.

A Long-Term Growth Story

TechnologyOne has been a powerhouse for long-term investors. Over the past five years, its share price has climbed 294%, and if we zoom out to the last two decades, the stock has delivered an incredible return of over 4,000%. These numbers highlight the strength of the company’s business model and its ability to consistently generate growth.

Can the Growth Justify Its Price?

While TechnologyOne’s performance has been impressive, valuation is always a key consideration. The stock currently trades at a price-to-earnings (P/E) ratio of 85.57, which is quite high compared to market averages.

Looking at the company’s financials, TechnologyOne reported 17% revenue growth, reaching $515.4 million in its latest full-year earnings update. Additionally, profits before tax increased 18% to $152.9 million, and annual recurring revenue saw a 20% jump to $470.2 million.

These numbers indicate strong momentum, but does it justify the lofty valuation?

Expert Opinion: Is Now the Right Time to Buy?

Some analysts believe that TechnologyOne’s current valuation leaves little room for upside in the short term. Portfolio manager James Gerrish from Shaw and Partners acknowledges the company’s strong fundamentals but suggests that the share price has run too far ahead of itself:

“This is an excellent business with recurring revenue that attracts many investors. However, from a valuation perspective, it looks expensive at around $30. We see better risk/reward at closer to $25.”

For investors looking for long-term exposure to the ASX tech sector, waiting for a dip might provide a better entry point. With the company targeting $1 billion in annual recurring revenue by FY30, there’s still plenty of potential—but much of that growth seems priced in already.

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