Corero’s cyber defence solutions delivered double digit growth in order intake, revenue and ARR in H1A. The Group also generated positive free cash flow leaving net cash on the balance sheet of $6.2m. Costs are relatively fixed from this point and Corero is now operationally leveraged into a growing cyber protection market. We are initiating forecasts targeting a conservative 10% revenue growth rate. Trading on 1.7x sales, we calculate a fair value of at least 14p which is 100% above the current share price.
We are initiating forecasts with a 10% revenue growth rate in FY23E and FY24E. This is prudent in our view because it lies below both historical growth rates for the Group (CAGR 2019-2022A: +27%) and below market forecasts for compound growth out to 2027 of +13%. Nor do our expectations factor in any contribution from major new partnership agreements such as the one announced yesterday with Akamai which should have a material impact from FY24E onwards.
