Liberum Capital thinks investors in Mind Gym PLC (LON:MIND) should take a breather following the dizzying performance by the stock since its initial public offering in June.
The City broker has initiated coverage on the behavioural science group with a ‘hold’ rating and a 185p target price, noting that the shares are up by around 26% since the IPO to 182.5p.
READ: Mind Gym shares climb 25% on AIM debut
In a note to clients, Liberum’s analysts pointed out that Mind Gym - which has a market cap of over £180mln - is the global leader in a new, bite-sized, productised, behaviour change methodology that is proven to work.
They noted that the business is re-investing in growth, and strong cash generation will provide options down the line, but for now they think the valuation looks fair.
The company, which was co-founded by one of David Cameron's old Eton schoolmates, Octavius Black, issued shares at 146p apiece as part of its IPO.
Black and his wife Joanne – the company’s chair – pocketed around £24mln by taking Mind Gym public, while co-founder Sebastian Bailey cashed in, to the tune of £22mln. They still hold a 64.6% stake in the company.
The duo set up Mind Gym back in 2000 from Black’s kitchen table. The business now employs almost 300 self-employed coaches who present its products to clients’ staff in ‘bite-size’ 90-minute sessions.
It now boasts an impressive list of customers, including 62 FTSE 100 companies and 59 firms listed on the S&P 100 index in New York.