Shearwater Share Price (SWG)

Cavendish retain their Buy and 90p target price.

They forecast 4.5p EPS to this June, rising to 5.8p EPS to June '27.

They continue to forecast a £7m cash pile as at this 30th June, against the current £10.5m m/cap:

"Contract win supports FY26E expectations

Shearwater has announced a £1.8m contract to supply a hardware platform for a major UK telecom provider along with service engineering to be delivered by Shearwater’s Brookcourt Solutions subsidiary. The contract will be delivered in the current financial year and supports our FY26E forecasts, which are unchanged. Following recent selling pressure in the sector the shares are trading on a P/E of 8.4x FY26E and 6.4x FY27E. We believe that this represents an attractive entry point, and we maintain our target price of 90.0p.

— Contract: The contract encompasses design, supply, and implementation of the hardware platform together with service engineering and support services to be delivered via Brookcourt. The platform will enhance the customer’s ability to monitor its critical network performance and operational data. The customer is a leading tier-one UK telecom operator and has a long-standing relationship with Shearwater.

— Investment summary: Shearwater is a company with a unique and differentiated set of capabilities in critical cyber-security applications, and a global blue-chip customer base. Driven by an increasingly complex threat environment and growing regulatory requirements, demand for cyber security remains highly robust. Differentiation lies in specialism across highly demanding critical infrastructure organisations such as global telecoms, financial institutions, and UK government departments. The company has specialisms in advanced technologies such as forensic network monitoring and quantum-based technologies.

The balance sheet remains strong: we are forecasting FY26E net cash of £7.0m. Given the strong market position and financial position, we argue that a P/E of 6.4x FY27E looks very undemanding and we maintain our target price of 90.0p, which represents 140% upside."

In your dreams. This is a 'dog 'of a company in a vibrant sector and held back by poor and arrogant management.

Nice rise,but, so much more upside for this cash rich company in a growth sector....I can see a multibag situation ahead....

Deliver improvements ? You must be joking. We have been waiting 7 years for that to happen !!

Hybridan's Friday takeaway (released after Friday's close I believe) always focuses on a couple of individual companies which are non-house stocks under £200m market caps.

This week's had a look at SWG, concluding as follows:

Https://hybridan.com/friday-takeaway/1st-may-2026/

"Strong services momentum was reported at the Interims with demand from blue-chip customers across Telecommunications, Financial Services and Government departments. Contract wins and expansions included a £7.3m extension with a leading mobile network operator and expansion with a Central Government department. There is continued demand for on-premise software solutions, particularly from customers in highly regulated sectors

SWG’s subsidiary, Brookcourt Solutions Ltd, become one of the first organisations to achieve ISO42001 certification for responsible and effective management of AI systems. This is a pioneering international standard for Artificial Intelligence Management Systems (AIMS) and reflects its deep expertise within cybersecurity and digital governance. As AI continues to transform businesses, the Group seeks to help clients in a secure, transparent, and human-centric manner.

A £1.8m contract was won on 29 April to supply a hardware platform alongside engineering services to support a key strategic monitoring requirement for a leading UK telecoms operator. The Group will design, supply and implement a resilient solution that will enhance the customer's ability to monitor its critical network performance and operational data.

3 February saw the news of a £9m renewal and extension of a contract with a financial organisation for a complex email security solution across the customer's global estate of which £2.7m will be recognised in FY26. These contracts assume margin improvement as new solutions are delivered, and has increased management’s confidence for an improved H2 and meeting FY26 market expectations.

Expectations on Alpha Terminal are for turnover of £35m and a £2.4m EBITDA. This, we calculate, gives an EV/EBITDA of 2.8x.

Since the Interim Results, Schroders PLC reduced its holding from 9.65% to 4.95%.

Hybridan Comment: The shares have slipped back and as the Company starts to deliver improvements, a recovery in the share price can be expected."