hVIVO PLC (AIM:HVO), the clinical trial company, should see a material impact of the ‘£10mln’ contract it announced on Wednesday in 2024, said brokers.
The British group signed the deal with an unnamed North American client to develop a human metapneumovirus (hMPV) challenge model.
Estimates value the deal at around £10mln, according to Liberum, basing it off the firm’s previous contracts to develop a new challenge model and conduct a human trial.
Cash from this deal won’t all come at once though, instead “the bulk of the contract value” will flow in next year, analysts noted.
“Don’t expect today’s win to have a material impact on 2023 estimates,” Liberum said.
Shares could rally in July when it releases interim results, analysts at the UK bank added.
For the price to lift past its 16p range it will need to convince investors that its order book is converting into revenue.
Trading on a 7.3x EV/EBITDA ratio, the stock is cheaper than rivals especially considering its room for growth, analysts concluded.
Liberum rates hVIVO a ‘buy’ with a 26.3p target price.