ASX 200 tech stock TechnologyOne (ASX: TNE) has edged lower from the open today despite no market-sensitive updates.
Shares in the software company currently fetch $30.20 apiece, nearly 1% in the red.
Zooming out, TechnologyOne has outperformed major benchmarks in 2024 and is up more than 96% this year to date.
What's got the ASX 200 tech stock drifting lower today, then? Let's have a look.
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Why is this ASX 200 tech stock down?
There are many reasons an ASX 200 tech stock like TechnologyOne could be sold on any given day.
First, there are the stock market's day-to-day machinations. It is a giant auction house, after all.
Second, tech stocks, in general, have shown to fluctuate more over time, compensated by higher returns versus other sectors.
Both of these facts are plausible.
But in this instance, it's more than likely trending down because of going ex-dividend today.
The software player's fully franked dividend of 17.37 cents per share was announced on 19 November, with the ex-dividend date for today, 28 November.
Shareholders on record before today can expect payment on 13 December, a few weeks before the Christmas shopping spree. Santa Clause rally anyone?
Shares almost always drift lower on the day of their ex-dividend date. Shareholders must own stock in a company before this date to qualify for its next dividend.
This adjustment is typical and grounded in economic theory, as the share price factors in the value of the dividend being paid to shareholders (and leaving the company).
The ASX 200 tech stock closed at $30.49 on Wednesday. It then hit $30.32 apiece almost immediately after the open today, which, surprise surprise, is a 17 cents per share dip.
So today's price action doesn't take away from TechnologyOne's business performance this year. On the contrary.
Brokers are bullish
Top brokers remain optimistic about the ASX 200 tech stock's future. UBS rates it a buy, lifting its price target to $33.80 following the company's FY24 results.
UBS analysts praised TechnologyOne's recurring revenue growth, achieved through its Software-as-a-Service (SaaS) model. This led to an 18% jump in pre-tax profits.
Goldman Sachs also gives the business a buy with a price target of $32.69 per share.
It sees room for pre-tax profits to grow at a 20% annual clip over the next five years. This reflects confidence in the company's resilient client base, comprising education and government sectors, which are less sensitive to economic volatility.
Not all analysts are this enthusiastic, though. Barrenjoey rates the ASX 200 tech stock a sell with a target of $25.20, citing valuation concerns as the stock trades at premium multiples.
Foolish takeaway
While the TechnologyOne share price has dipped slightly today, nothing fundamental has changed about the company.
Instead, it is going ex-dividend today. Whether or not this is the start of a new downtrend is far too early to speculate, and an exercise in torturing reality. No one can predict the future.
TechnologyOne is up 93% in the past year.
