Sharecast News
23 Jun, 2022 13:03

Canaccord Genuity raises target price on Cerillion

dl cerillion aim customer management billing software developer provider telecoms digital technology logo
CerillionSharecast graphic / Josh White

Analysts at Canaccord Genuity hiked their target price on software Cerillion from 950.0p to 1,100.0p on Thursday as they raised their estimates for the group and labelled expectations as "conservative".

Canaccord Genutiy said Cerillion's recent interim results showed an "encouraging" growth in organic sales of about 25% and temporarily elevated underlying earnings margins of 39%, with some normalisation likely in the second half of the year due to salary inflation.

The Canadian bank stated backlog was slightly down year-on-year and sequentially due to the timing of larger deal signings, which the company expects to accelerate in the second half. It also noted that new customer momentum was "strong", with the new logo sales pipeline up 31% year-on-year at £172.0m.

"We have raised our revenue, EBIT & EPS forecasts with our/consensus estimates implying a 67:33 1H:2H EBIT split - this seems conservative compared to the 45:55 historical average and in our view implies scope for upside," said Canaccord.

"The shares' current ~29x cal. '23 P/E is broadly inline with UK peers such as Aptitude, Netcall and Alfa FS despite superior top line and EPS growth. Our new target is based on a cal. 2023 P/E of 34x, a 25% premium to listed peers due to its superior growth and higher margins."

Reporting by Iain Gilbert at Sharecast.com


News Source: © 2022 Web Financial Group (UK) Limited. All rights reserved and terms of use apply.

Important Legal Notice about News Sources: Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news and we may not share the views of the author or publisher. We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.

 

Important Legal Notice about News Sources

Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.