RE: New Broker Note Out19 Jan 2022 08:17
Investment summary: Cornerstone is experiencing favourable trends in the SME market, on which it focuses, and a strong early contribution from its international expansion. We revisit the multiple organic and acquisition-centric growth drivers from which we expect the company to benefit over the next few years. Focused enhancements to the platform to integrate with key SME finance and accounting systems will also be a key element. Our valuation approach centres on a discounted cash flow (DCF) analysis, where we consider two scenarios: the implied fair equity valuation range is between £12.5m and £24.6m; the latter scenario includes acquisitions planned for 1Q22.