IQGeo Group PLC (AIM:IQG) delivered a "very positive" update on Wednesday, said house broker FinnCap, raising its target price to 158p based on the greater security and visibility on revenue and profit.
Following on from the several recent new contract wins, this demonstrated "how well sales are going to global telecom and electricity networks".
Assisted by a full year of December 2020 acquisition OSPi, full-year revenue was up 48%, beating the 47% year-on-year increase Finncap had forecast.
This step-change in scale more than halved the adjusted losses before interest, tax, depreciation and amortisation, which was 28% lower than forecast.
Moreover, the £11.5mln year-end cash position was "particularly notable", with Finncap saying this suggests IQGeo was at breakeven at the free cash flow level in the second half of the year.
Growth in recurring revenue driven by both OSPi and the original Enterprise business was also seen as impressive, with an exit recurring revenue rate on contracts rising by £2.9mln to £8.2mln.
"Together with the support revenue and the one-off licences in the pipeline, it leaves less than £2m of new sales required in the year to meet our forecast 26% revenue growth to £17.2m in FY22."
That level of revenue should see IQGeo swing to a "material" adjusted profit on an EBITDA basis, the broker said, with cash generation to cover further development.