Canaccord Genuity analysts raised their target price on software firm Cerillion Plc (LON:CER) from 1,675p to a vibrant 2,000p on Monday, following the company’s impressive FY24 trading update.
The analysts highlighted that Cerillion’s “solid first half” opens up even more potential for upward revisions to forecasts, as the company’s strong performance streak has carried on, delivering double-digit organic growth and operating margins above 40%, consistently outpacing market expectations.
Reaffirming their ‘buy’ rating, Canaccord Genuity emphasised that despite a challenging macro environment and softer telco spending, Cerillion has continued to surprise on the upside. The company maintained robust mid-teens growth and an enviable 20% free cashflow margin over the last twelve months, positioning itself as one of the UK’s few software companies approaching the “Rule of 40” benchmark in the SMIDcap space.
“Our new £20 target price is based on a 36x CY25E P/E multiple,” said Canaccord Genuity. “This positions Cerillion near the top of its peer group, well-deserved for its sustained double-digit growth, solid free cashflow margins, and reliable outperformance of consensus forecasts.”
Canaccord’s upbeat assessment highlights Cerillion’s standout ability to deliver value amid challenging conditions, setting ambitious growth targets that seem increasingly within reach.
Cerillion is a UK-based software company that specialises in providing billing, charging, and customer relationship management (CRM) solutions primarily to telecommunications companies. Founded in 1999 and headquartered in London, Cerillion serves a global client base, offering software that helps companies manage billing, revenue, customer accounts, and digital customer experiences. The company’s products are geared towards improving operational efficiency, streamlining customer interactions, and optimising revenue for telcos and other subscription-based businesses.
Cerillion’s core product suite, Cerillion Enterprise BSS/OSS, integrates various modules that can be deployed individually or as a comprehensive solution covering everything from order management to service fulfilment. It also supports a subscription management platform called Cerillion Skyline, designed for digital services, IoT, and other industries that depend on recurring revenue models. The company is noted for its flexibility in deploying its products on-premise, in the cloud, or as a hybrid solution.
