Gamma Communications (AIM:GAMA) has seen its price-to-earnings multiple fall from 35 times at mid-2021 to around 12 times today, creating what Citi describes as an attractive entry point.
Revenue growth has slowed from double-digit to mid-single-digit and the macro background for UK small and medium enterprises remains challenging.
Citi believes the sell-off has been exaggerated, in part because some AIM-focused investors were forced to sell when Gamma moved to the Main Market in May 2025, and also because the acquisition of German provider STARFACE in February 2025 has divided opinion.
Despite acknowledging that consensus forecasts may need to be trimmed to reflect tougher UK conditions, Citi has reaffirmed its Buy recommendation.
The broker has lowered its target price to £14.70 from £16.20, noting that the recent de-rating offers scope for share price recovery as sentiment improves. This represents a significant discount to its longer-term average.
The shares in the business mobile and broadband specialist were static at £11.28.