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(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on software firm Cerillion from 2,350p to 2,250p on Monday, after the group's October update pointed to a second-half growth rebound, as well as some sales slippage into full-year 2026.
Canaccord Genuity updated its estimates to reflect Cerillion's lower FY25 revenue base, with the top-line result indicated that second-half sales grew by 15% after falling by 7% in the first half, helped by a strong performance in the software division.
However, Canaccord left its profit forecasts largely unchanged, but said the recent de-rating in UK software peers triggered "a small reduction" in its target price, based on a blend of a calendar year price-to-earnings ratio of 30x and its bull case net present value.
The Canadian bank expects growth to re-accelerate in FY26 to +15%, assuming Cerillion continues on its trajectory of securing further large contracts with global Tier 1 and 2 telecommunications firm.
"Longer-term, we continue to believe Cerillion will remain in share gain mode of the ~$28bn OSS BSS TAM (ex CCaaS) with its GenAI-enhanced out-of-thebox software offering," said Canaccord. "As detailed in our deep-dive, this could potentially drive a 15% sales CAGR and the stock to ~34 or 2.5x from current levels, by the end of the decade."
Reporting by Iain Gilbert at Sharecast.com
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