Canaccord Genuity initiates coverage on Cerillion at 'buy'
Analysts at Canaccord Genuity initiated coverage of software firm Cerillion with a 'buy' rating and 350.0p target price on Thursday.
Canaccord said the experience of Cerillion's senior management in the billing and CRM software solutions area was "impressive", with both the chief executive and financial officers having been with the group effectively since the management buyout in 1999.
The Canadian bank stated that with the advent of a telecom super cycle in 5G and an important Nokia partnership providing additional pipeline potential, it believes that sales growth should be roughly 10% compound annual growth rate over the next three years.
Canaccord also highlighted that Cerillion's order book at the end of the first half stood at over £19.0m and that it already held £5.5m in contracted support and subscription revenues.
"The vast majority of this revenue will be taken to the P&L in FY21/22, providing a sound base from which to win new business and grow sales," said Canaccord.
Additionally, Canaccord also pointed out that back in September, Cerillion was awarded its largest-ever contract - an £11.2m agreement with an unnamed "major UK connectivity provider", with the vast majority being recognised in 2021/22.