Shore Capital has initiated coverage on Cornerstone FS PLC (AIM:CSFS), a UK-based provider of payment services, with a strong vote of confidence.
The company, which caters to small and medium-sized enterprises (SMEs) and high-net-worth individuals (HNWIs), has been recognised for its rapid growth and operational progress over the past two years.
The broker sees its current market value as very attractive and has set a price target of 50p, which is more than three times the current share price of 14.25 pence (up 9% on the day). This target is based on comparisons with similar companies in the industry.
Cornerstone recently achieved positive adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA). This milestone is significant as it indicates the company is now generating more revenue than its operating costs, excluding certain accounting and tax considerations.
Looking ahead, Shore projects a strong revenue increase, expecting a 36% growth rate from the fiscal year 2022 to 2026. This growth is anticipated to significantly boost Cornerstone's profitability, with adjusted EBITDA forecast to rise to £4.5 million by 2026.