Financial Trading Blog
Stock of the day 01/06/2016 – iomart Group PLC
After spending much of 2015 rocketing back towards the all-time highs it had struck in 2013 iomart suffered a bit of a knock in December, as investors reacted poorly to the company’s half year update.
Despite revealing a 16% rise in revenue to £36.4 million, alongside an 8% rise in adjusted pre-tax profit to £8.7 million, the stock plunged over 10%. It appears that the company’s failure to confirm it was on track to meet its full year targets caused the violent reaction from investors, alongside a warning that overheads will begin to rise as iomart continues to expand its operations.
(Source: IT-Finance.com 01/06/2016)
Things didn’t get much better as 2016 got underway, iomart quickly tumbling to an 8 month nadir of £2.11 as it fell in line with the rest of the market. Yet from this low the stock began to rise, lifting back above £2.50 by the start of February before riding out the more tumultuous moments of that month with minimal fuss.
The company then spent most of March bouncing between £2.60 and £2.70, even with a stellar fourth quarter update that saw iomart aim for adjusted pre-tax profit growth of 13% for the full year. By mid-April the stock had finally escaped that trading bracket, bursting above £2.80 (and at points was teasing £2.90) for the first time since its post-half year plunge. Sadly those gains weren’t to last for long, and since then iomart has been on a gradual decline, the stock now at a current trading price of £2.65 (IT-Finance.com, 01/06/2016).
In terms of the company’s annual report next Tuesday investors will be looking for iomart to come good on its pre-tax profit growth promise, with £18.8 million the number to beat; EBITDA, meanwhile, is expected to jump 11% to £32.3 million.
iomart Group PLC has a consensus rating of ‘Buy’ with an average target price of £2.99.
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