Knights Group Holdings Plc (KGH) AI Stock Analysis

• Market Cap: £140.73M
• Dividend Yield: 2.75%
• Average Volume (3M): 217.28K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.05
• Revenue Growth: 8.01%
• EPS Growth: -23.02%
• Country: UK
• Employees: 1,335
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.13
• Shares Outstanding: 85,813,470
• 10 Day Avg. Volume: 115,996
• 30 Day Avg. Volume: 217,285
• PEG Ratio: -0.80
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 8.99
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £345.00
• Price Target Upside: 96.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.27
• Revenue Forecast (FY): £199.73M

• Rating: 60 Neutral
• Price Target: 172.00p ▼(-2.27% Downside)
• Action: Reiterated Date: 02/01/26
• Date: Action: Reiterated 02/01/26

The score is primarily supported by solid financial performance (growth and operating cash generation) and a technically strong uptrend (price above major moving averages). It is materially constrained by expensive valuation (very high P/E) and signs of overbought momentum that increase near-term risk.

Positive Factors

Strong Revenue Growth

Sustained top-line growth above 20% signals durable demand for Knights’ legal and advisory services. Over the medium term this supports operating leverage, improves pricing power and funds reinvestment in specialist teams, helping sustain margins and client retention.

Solid Cash Generation

Improved operating cash conversion and positive free cash flow growth indicate the business generates real cash from operations. This provides flexibility to fund growth, pay dividends, repay debt or invest in service capabilities without relying on external financing.

Diversified Legal Services Mix

A broad mix of practice areas and regional specialist teams reduces client and sector concentration risk. Cross-sell opportunities across corporate, real estate and disputes create recurring work streams and client stickiness that support durable revenue diversification.

Negative Factors

Elevated Leverage

A debt-to-equity ratio around 1.2 signals significant leverage for a professional services firm. Higher financial obligations can constrain strategic flexibility, increase interest sensitivity and magnify downside risk during revenue or margin pressure.

Declining Profit Margins

Worsening net and EBIT margins point to pressure converting revenue into retained profit, whether from cost inflation, pricing mix or overhead increases. Persisting margin erosion would weaken cash flow, reduce reinvestment capacity and strain returns to shareholders.

Sharp EPS Contraction

An almost 90% decline in reported EPS signals material earnings volatility or one-off hits despite revenue growth. This raises questions about underlying profitability quality and the sustainability of earnings, which could affect capital allocation and stakeholder confidence.

Knights Group Holdings Plc Business Overview & Revenue Model

Company Description

Knights Group Holdings plc provides legal and professional services in the United Kingdom. The company offers business services, in the areas of banking, commercial, corporate, data protection, debt recovery, dispute resolution, and housing and regeneration. It also offers services in the areas of immigration, licensing and gambling, and employment. In addition, the company provides personal services, including agriculture, charities, conveyancing, family, landed estates, planning, professional discipline, tax and trusts, and wills and estates. Further, it offers real estate; restructuring and insolvency; regulatory; and tax services. The company serves aviation, consumer and retail, energy, waste and natural resources, financial and professional services, healthcare, industrials, transport and support services, property management and development, agricultural and the food supply chain, technology, and media and telecommunications sectors. Knights Group Holdings plc was founded in 1759 and is based in Newcastle-under-Lyme, the United Kingdom.

How the Company Makes Money

Knights Group Holdings Plc generates revenue primarily through the provision of legal services to its clients. The company operates on a fee-for-service model, billing clients for the hours worked by its solicitors and other professionals. Key revenue streams include transactional work, litigation services, and advisory roles in corporate governance and compliance. Additionally, the firm may earn income through retainer agreements with corporate clients who require ongoing legal support. Significant partnerships with corporate clients and strategic alliances with other service providers enhance KGH's market presence, contributing to its earnings by enabling cross-selling opportunities and expanding its client base.

Knights Group Holdings Plc Financial Statement Overview

Summary

Financial statements indicate solid revenue growth and healthy EBIT/EBITDA margins, supported by improving operating cash flow and positive free cash flow growth. The score is held back by declining net/EBIT margins versus the prior year and elevated leverage (debt-to-equity ~1.20), which increases financial risk.

Income Statement

Knights Group Holdings Plc has shown consistent revenue growth over the years, with a 5.54% increase in the latest period. The gross profit margin has remained stable, indicating efficient cost management. However, the net profit margin has decreased compared to the previous year, reflecting challenges in converting revenue into profit. The EBIT and EBITDA margins are healthy, suggesting operational efficiency, but the decline in EBIT margin from the previous year indicates potential cost pressures.

Balance Sheet

The company has a relatively high debt-to-equity ratio of 1.20, indicating significant leverage, which could pose financial risks. Return on equity is moderate at 7.25%, showing decent profitability for shareholders. The equity ratio of 37.52% suggests a balanced capital structure, but the increasing debt levels warrant caution.

Cash Flow

Operating cash flow has improved, with a strong operating cash flow to net income ratio of 0.66, indicating good cash generation from operations. Free cash flow growth is positive at 6.17%, but the free cash flow to net income ratio has decreased, suggesting less cash available after capital expenditures. Overall, cash flow management appears solid, but there is room for improvement in free cash flow conversion.

Breakdown	TTM	Apr 2024	Apr 2023	Apr 2022	Apr 2021	Apr 2020
Income Statement
Total Revenue	181.16M	161.97M	149.96M	142.08M	125.60M	103.20M
Gross Profit	123.26M	64.36M	56.95M	130.47M	48.74M	40.49M
EBITDA	23.99M	28.58M	31.72M	26.80M	14.18M	15.09M
Net Income	1.18M	7.58M	9.85M	7.94M	-2.53M	3.40M
Balance Sheet
Total Assets	298.08M	278.61M	219.10M	212.17M	206.28M	194.30M
Cash, Cash Equivalents and Short-Term Investments	8.50M	5.85M	5.45M	4.04M	4.10M	4.78M
Total Debt	138.85M	124.95M	81.19M	78.18M	79.68M	68.56M
Total Liabilities	196.28M	174.08M	118.84M	119.36M	120.62M	111.61M
Stockholders Equity	101.81M	104.53M	100.26M	92.81M	85.66M	82.69M
Cash Flow
Free Cash Flow	15.93M	13.50M	14.63M	14.41M	7.52M	2.52M
Operating Cash Flow	25.25M	25.25M	22.83M	16.33M	10.11M	7.08M
Investing Cash Flow	-36.55M	-38.09M	-14.33M	-7.85M	-10.33M	-6.65M
Financing Cash Flow	18.90M	13.32M	-7.09M	-8.67M	1.52M	-10.24M

Knights Group Holdings Plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 176.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:KGH, the sentiment is Negative. The current price of 176 is above the 20-day moving average (MA) of 173.03, below the 50-day MA of 180.30, and above the 200-day MA of 173.30, indicating a bearish trend. The MACD of -5.83 indicates Positive momentum. The RSI at 39.83 is Neutral, neither overbought nor oversold. The STOCH value of 22.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:KGH.

Knights Group Holdings Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KEYS	76 Outperform	£165.56M	9.55	56.75%	5.98%	16.29%	22.80%
RST	66 Neutral	£316.29M	27.81	4.01%	2.31%	6.90%	145.00%
CPI	64 Neutral	£434.04M	-12.59	9.00%	―	-4.87%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KGH	60 Neutral	£140.73M	-138.94	7.40%	2.75%	8.01%	-23.02%
RWS	60 Neutral	£282.78M	-0.96	-12.00%	15.28%	-3.91%	-310.36%

Knights Group Holdings Plc Corporate Events

Knights Returns to Organic Growth as Revenue Jumps 30% and Regional Expansion Continues

Knights reported a strong first half for the six months to 31 October 2025, with underlying revenue up 30% to £103.2m and a return to organic growth of around 3%, while underlying profit before tax rose 12.5% to £16.4m and cash conversion reached 122%, despite a lower margin reflecting higher payroll taxes, interest costs and investment in technology and AI. The group continued to execute its scale-up strategy through selective acquisitions and office upgrades, expanding its footprint in the Midlands, South East and Cardiff, improving retention with annualised churn reduced to 9%, and strengthening its operational management and tech infrastructure, leaving it well positioned for further organic growth in the second half and confident of delivering full-year performance in line with market expectations, although reported profit before tax fell due to higher acquisition-related non-underlying costs and net debt rose to £75.2m following investment and deal-related outflows.

The most recent analyst rating on (GB:KGH) stock is a Hold with a £186.00 price target. To see the full list of analyst forecasts on Knights Group Holdings Plc stock, see the GB:KGH Stock Forecast page.

Knights Group Schedules Online Investor Briefing After Half-Year Results

Knights Group Holdings plc has announced that it will host an online investor presentation in partnership with Equity Development following the release of its half-year results for the six months to 31 October 2025. The webinar, to be led by chief executive David Beech and chief financial officer Kate Lewis on 14 January, will be accessible to both existing and prospective shareholders, who will be able to submit questions during the session, with a recording made available afterwards, underscoring the company’s efforts to enhance investor engagement and transparency around its financial performance and strategy.

The most recent analyst rating on (GB:KGH) stock is a Hold with a £186.00 price target. To see the full list of analyst forecasts on Knights Group Holdings Plc stock, see the GB:KGH Stock Forecast page.