- Zegona Communications
- 01 October 2025 11:30:48
Source: Sharecast
Canaccord Genuity said it believes that all the ingredients were there for EJLSHM Funding's 69% stake in the company to get cancelled in the first half of 2026 and estimates that the subsequent reduction in share count could lift fair value to £15.50 per share, assuming a "slightly-above-peers" 6.5x FY26 enterprise value/underlying earnings multiple.
Adding to this, the possibility of a special dividend of up to £1.60 per share implies healthy 22-35% TSR potential from here, said the Canadian bank, which also reiterated its 'buy' rating on the stock.
"With the shares the best-performing UK TMT stock this year, it is tempting to think 'the easy money has been made'. However, we believe Zegona's strong operational & cash flow progress will continue next year with a return to sales growth the final missing ingredient," said Canaccord.
"We believe that delivering sustained positive low- to mid-single digit % revenue growth could drive a further re-rating of the shares with every 0.5x turn on the EV/EBITDAaL multiple potentially adding £1.9/share to fair value. We raise our target price to £15 (from £9.80) based on a now 95% expected probability of a 69% reduction in share count."
Reporting by Iain Gilbert at Sharecast.com