Leaning Technologies Group PLC (LON:LTG) has a number of potential catalysts coming up that can significantly boost earnings next year, according to analysts at Berenberg.
Shares in the e-learning and training specialist have slipped by 23% since the highs seen in the summer said the broker, but with the potential for earnings to grow by 40% in 2021 the current share price is compelling, the broker argues.
Berenberg says that Learning Tech has outperformed its US e-learning peer group and looks undervalued relative to both listed rivals and those acquired recently by private equity.
Catalysts to watch are threefold says Berenberg.
Second half numbers might be much stronger than expected especially with a contribution from the Moodle-based e-learning platform.
Second, a big contract win might come through notably the Royal Navy’s learning and training programme while thirdly the recent fundraise might be used to fund earnings-enhancing acquisitions.
Worries about how companies’ retrenching might affect LTG’s software business have affected sentiment, but Berenberg calculates that at most 2% revenue are at risk.
The broker has a sum-of-the-parts based price target of 190p and a 'buy' rating.
Shares rose 2% to 120.6p.