Love Group Global Ltd (ASX:LVE), is a AU$3.48M small-cap, which operates in the software industry based in Australia. While mobile and cloud computing become ubiquitous, there is a new wave of advancement emerging from innovations such as machine learning, robotics and augmented reality. Tech analysts are forecasting for the entire software tech industry, a positive double-digit growth of 15.59% in the upcoming year , and an enormous growth of 66.29% over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the Australian stock market as a whole. Today, I’ll take you through the tech sector growth expectations, and also determine whether Love Group Global is a laggard or leader relative to its tech sector peers. Check out our latest analysis for Love Group Global

What’s the catalyst for Love Group Global’s sector growth?

The battle for competitive advantage has led businesses to adopt new the cutting-edge technology, or risk being left behind. Many technologies are now coming into their own as their power and speed increase and the cost of delivering them goes down. And some are pursing growth through various strategies including new M&A, collaboration and alliances, as well as cost reduction and organic growth. In the past year, the industry delivered growth of 5.81%, though still underperforming the wider Australian stock market. Love Group Global lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook seems uncertain, with a lack of analyst coverage, which doesn’t boost our confidence in the stock. This lack of growth and transparency means Love Group Global may be trading cheaper than its peers.

Is Love Group Global and the sector relatively cheap?

The software tech industry is trading at a PE ratio of 34.02x, higher than the rest of the Australian stock market PE of 17.24x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry did return a higher 15.86% compared to the market’s 11.37%, which may be indicative of past tailwinds. Since Love Group Global’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Love Group Global’s value is to assume the stock should be relatively in-line with its industry.

Next Steps:

Love Group Global has been an tech industry laggard in the past year. If Love Group Global has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although it delivered lower growth relative to its tech peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. However, before you make a decision on the stock, I suggest you look at Love Group Global’s fundamentals in order to build a holistic investment thesis.