Bytes Technology Group plc (JSE: BYI) has surged into the limelight of investor interest in 2023, marking a stark turnaround from its 35.39% share price decline in 2022. The company has astoundingly reversed its fortunes this year, boasting a staggering 75.42% year-to-date rise. Emerging as the third most valuable technology company on the JSE with a R33 billion market cap, Bytes Technology’s trajectory signifies a compelling resurgence in the tech sector.
This resurgence aligns seamlessly with the company’s impressive first-half performance, notably witnessing an exponential surge in gross invoiced income (GII) to £1,081.6 million, a 37.6% growth surpassing the monumental £1 billion mark in H1 for the first time. Such exceptional growth stems from pivotal contract wins, particularly with the National Health Service (NHS) and robust demand from corporate clientele.
Bytes Technology’s financial robustness was further reflected in its revenue, ascending to £108.7 million, a 16.3% increase, while gross profit (GP) surged to £75.3 million, a notable 15.0% climb. Bolstering these figures, operating profits escalated by 12.1% to £30.6 million, with cash reserves soaring by an impressive 44.4% to £51.7 million. Additionally, the rise in earnings per share to 10.60 pence illustrates a remarkable 17.0% growth. This compelling performance underscores Bytes Technology’s newfound position as a beacon of success in the tech landscape.
Technical
Bytes has experienced an impressive 8-week streak of consistent share price growth, nearing its all-time high set earlier in the year. This upward momentum has been underscored by the share price consistently trading above its 100-day moving average, indicating a sustained bullish trend.
Following the establishment of a new all-time high in June, the share price encountered resistance at the R149.50 per share level, leading to a subsequent dip and a convergence with the moving average. However, the stock displayed resilience, surging in October and surpassing the moving average, forming an ascending channel pattern. This ascent solidified a support level at R104.63 per share, highlighting a crucial level among investors.
If the upward momentum persists, the stock could retest the R149.50 per share level, marking a pivotal point of interest. Conversely, considering the overbought conditions signalled by the Relative Strength Index (RSI), an impending reversal might bring the R104.63 level into prominence.
Summary
Bytes Technology has emerged as a compelling success story in 2023, reclaiming its prowess after a challenging 2022. Its stellar financial performance, marked by substantial revenue growth, robust profits, and strategic contract wins, reflects a remarkable resurgence in the tech sector. The company’s technical uptrend, supported by consistent share price growth, indicates investor confidence but warrants caution amidst potential overbought conditions.
Sources: Bytes Technology Group Plc, Reuters, TradingView
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