Cavendish PLC (AIM:CAV) has raised its price target for Concurrent Technologies (AIM:CNC) to 302p from 256p after the embedded computing company reported record first-half results.
The broker maintained its 'buy' rating on the AIM-listed company, whose shares it said now traded at 39.1 times forecast earnings for the current financial year.
Order intake at Concurrent, which designs high-end embedded computer systems for critical applications, surged around 110% to £46.9 million in the six months to June.
Cavendish noted that even excluding a roughly £17 million multi-year contract from a European customer, order intake of about £30 million still exceeded the previous first-half record.
The broker said revenue of £23.2 million represented 44.6% of its £52 million full-year forecast, with the past three years showing an average 58% weighting towards the second half.
Cavendish pointed to a turnaround in Concurrent's Systems division, whose gross margin nearly doubled to 26.3% as the unit returned to profit.
Design wins across the company's Products and Systems businesses now carry a projected lifetime value of around £129 million.
Cavendish highlighted management guidance that full-year revenue is expected to be materially ahead of the £52 million consensus forecast, with profit also expected to exceed £8 million.
The broker is keeping its forecasts unchanged for now, including an adjusted earnings per share estimate of 6.8p for the year.
Cavendish said its new target price reflected valuation multiples in line with Concurrent's immediate peer group, implying upside of around 14% from the share price of 265p.
