Not all investors are technology geeks, familiar with the jargon and business dynamics that matter most. Tag lines like cloud computing, software-as-a-service (SaaS) or analytics may be reasonably self-evident.
But ‘Industry 4.0’, ‘Internet of Things (IoT)’, ‘Blockchain’ or ‘Software Defined Network’ may be nothing more than gobbledygook.
But some things barely change, there are some investment metrics that are relevant regardless of a company’s business. Valuation may come in many guises but understanding how to arrive at one is important, be it a packaging firm, oil driller or cyber security business.
EXPERT HELP
Helpfully, George O’Connor, the respected technology analyst at investment bank Stifel, has pulled together a list of key performance indicators (KPIs) on his own ‘Top 10’ of UK technology. Ranked by market cap, his list covers FTSE 100 members Micro Focus (MCRO) and Sage (SGE) down to healthcare technology AIM company EMIS (EMIS:AIM).
If you would like to know more about any of these companies, we’ve provided links to the Shares website landing page of each, further down this article.
Jargon buster:
EV = enterprise value (market cap +/- debt/cash)
EBITDA = earnings before interest, tax, depreciation and amortisation
Operating leverage = scope for revenues growth to outpace costs leading to faster profits expansion
SHARES AT YOUR FINGERTIPS
Search any company on the Shares website, including exclusive commentary and analysis, key stats and facts, forecasts and lots more: