Stifel Nicolaus analyst Peter McNally maintained a Buy rating on Kooth (KOO – Research Report) today and set a price target of p520.00.
Peter McNally has given his Buy rating due to a combination of factors that highlight Kooth’s potential for growth and value. The company’s revenue has doubled in 2024, reaching £66.8 million, which exceeded expectations. This growth was supported by lower operational expenses and successful expansion efforts in California, where user engagement has significantly increased.
Despite concerns about the California contract and a slower UK market, Kooth has shown resilience with strong cash flow generation and a solid financial position, having no debt and cash reserves of £21.8 million. The company is also expected to maintain profitability and continue generating free cash flow, with a forecasted yield of 6.9% in 2025. These positive financial metrics, combined with strategic investments in marketing and business development, underpin McNally’s optimistic outlook on Kooth’s stock.