Cambridge Cognition Holdings PLC (AIM:COG), the neuroscience technology company, has attracted a 'buy' recommendation and 72p target price from Cavendish in a detailed initiation note that sees the shares as materially undervalued against digital health and contract research peers.
The stock trades at 36.55p, giving the company a market capitalisation of just £16.8 million and an enterprise value of £16.5 million.
Cavendish argues that 2025 should be viewed not as a weak year but as a commercial reset, with the foundations now in place for a revenue recovery in 2026 and beyond.
New sales orders surged 73% to £12.8 million in the year to December 2025, reversing two years of decline, while the order book expanded 21% to £16.5 million.
Of that backlog, £8.8 million is expected to convert into revenue this year, up 33% on the prior year, providing what Cavendish describes as pre-funded growth dependent on delivery execution rather than new contract wins.
The broker forecasts revenue of £11.6 million in 2026, rising to £13 million in 2027 and £19.1 million in 2028, when the company is expected to become profitable with adjusted earnings per share of 4.8p.
Gross margins remain structurally high at around 75%, reflecting the software-led nature of the business, and sales and marketing efficiency has improved sharply, with spend as a percentage of new orders falling from 36% to 21%.
Cambridge Cognition's core platform is CANTAB, a touchscreen-based cognitive assessment tool (a standardised battery of tests measuring memory, attention and executive function).
It is validated by more than 3,600 peer-reviewed publications and used in major pharmaceutical trials, including Bristol Myers Squibb's schizophrenia programme and a 23,000-participant study with Biogen and Apple.
The company has broadened its offering with AI-driven voice biomarkers through the 2023 acquisition of Winterlight Labs and machine-learning quality assurance via its AQUA platform, creating what Cavendish views as a differentiated end-to-end toolkit for central nervous system clinical trials.
Beyond pharma, Cavendish highlights underappreciated optionality in healthcare through the CANTAB Pathway product, which is being piloted with a major European private healthcare group that the broker suspects is Affidea.
That opportunity is not included in forecasts but could add £1.8 million to £8 million of incremental revenue by 2028.
Cavendish derives its 72p target from a blended enterprise value to sales multiple of 2.9 times, based on nearest peers Cogstate and Ixico.
Key risks include a constrained balance sheet, with net cash of just £300,000 at year end, and the inherent lumpiness of clinical trial contract awards.