The Technology One Limited (ASX: TNE) share price is on course to make it three days of declines in a row.
At lunch the enterprise software company's shares are down 1.5% to $5.28, stretching its three-day decline to over 5%.
What happened?
Although the company advised yesterday that its enterprise Software-as-a-Service (SaaS) business unit has experienced strong demand and almost doubled in size in the last 12 months, the market hasn't responded as enthusiastically as you might have expected.
This may be down to the premium its shares trade at presently. It seems 40x trailing earnings is a little too much for some investors.
But with the company winning many multi-million dollar SaaS contracts from marquee customers in the latest quarter, the company could yet be in a position to deliver a strong full-year result later this year that justifies this premium.
Shareholders still have some time to wait until this is known, though. As Technology One's financial year ends in September, its full-year result is generally released in mid to late November.
