hVIVO PLC (AIM:HVO) is well placed to exceed 2023 revenue forecasts, according to the company’s corporate broker, finnCap.
The comment followed the research group’s latest contract – a £5.2mln deal to test a vaccine candidate on behalf of an unnamed Asia-Pacific-based drug developer.
“We are leaving forecasts unchanged,” said finnCap analysts in a note. “However, with around 95% of forecast full-year 2023 revenues now thought to be contracted, it places the company in a very strong position to meet or beat full-year 2023 forecasts, with management focused on order book conversion.
“This contract also builds further revenue visibility into 2024, which we estimate at around 24% of forecast revenues.”
finnCap and fellow corporate broker Liberum reckon hVIVO stock is undervalued. The former’s price target is 44p, while the latter’s is a more conservative 21.6p. Both targets represent a significant premium to the current share price of 12.15p.
“While we won’t be changing our forecasts today, we believe that momentum is high and that the current share price looks excellent value as an entry point for investors,” said Liberum analysts.
Earlier, investors were told hVIVO would carry out a phase IIa clinical trial assessing the client’s respiratory syncytial virus (RSV) vaccine candidate for safety, its ability to provoke an immune response (immunogenicity), and efficacy.
The human challenge study is set to begin in the second half of this year and the revenue will be recognised in 2023 and 2024.
This is the first contract of this kind hVIVO has signed with a client in the Asia Pacific region in over a decade and is a growth area for the company as it looks to diversify its client base and order book, hVIVO confirmed.