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Corero Network Security's outlook is best for years, says broker

The market for DDoS protection is only going in one direction [up], said Cenkos.

Corero Network Security PLC -

Corero Network Security PLC (LON:COR) has been upgraded to a ‘buy’ by its house broker Cenkos, which says the outlook for the cybersecurity group is the best it’s been for years.

A backdrop of growing utilisation of cloud services and the inherent risk to network security, means the market for DDoS protection is only going in one direction [up], said Cenkos.

Revenues in the half-year jumped 48%, but orders were up 58% and with the collaboration with US tech giant Juniper starting now to make a material impact, sales momentum should continue going forward says the broker.

Annualised recurring revenues rose to US$8.8mln in the first half, while gross cash at the end of the period was US$6.2mln.

 “On the basis that roughly 80% of orders might be converted into revenues in any one period, the reported level of order intake is consistent with our revenue forecasts for 2020 (US$16.1mln),” Cenkos said.

“Trading on 3.3x FY20E EV (enterprise value) /sales, the current rating is not commensurate with the current growth rate being delivered by the stock.

“With sufficient cash to cover our expected H2E cash outflow of US$3.5mln, we are buyers.”

Shares were unchanged at 8.5p.

Quick facts: Corero Network Security PLC

Price: 8.25 GBX

AIM:CNS
Market: AIM
Market Cap: £40.83 m
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