Analysts are expecting a solid set of numbers when Smart Metering Systems (SMS:AIM), an installer of advanced gas meters for corporates, reports results on Monday 21 March.
SMS, whose shares have gained more than 400% since listing in 2011, is highly rated by support services analyst Michael Donnelly at Panmure Gordon.
Arguing for a target price around 565p a share, Donnelly says continued growth in SMS's metering, installation and data services businesses as well as a high level of recurring revenue mean the valuation continues to look attractive.
A pre-close update on 29 January said trading was in line with market expectations of around £53.2 million in sales, £15.4 million in pre-tax-profit and earnings per share of 15.4p.
Smart Metering, despite its name, in the industry jargon installs 'advanced' rather than 'smart' meters at industrial and commercial locations (I&C).
Long-delayed proposals to roll out smart meters for household energy users represent another opportunity for the business, argues Donnelly.
'With the opening of the domestic smart meter market, SMS signed five framework agreements with independent energy suppliers including RHE, Green Energy, Flow Energy, Spark Energy and Our Power,' Donnelly writes in a 29 January note.
'Together, they supply 386,000 homes and are part of the fastest-growing segment of the retail energy supply market.
'It is worth reminding the market about these wins as they are the first material evidence of the take-off that we expect in the domestic smart metering market – an opportunity that we calculate to be as great as that seen by SMS in the I&C market.'
Rival Energy Assets (EAS) has previously told Shares that it has avoided the consumer smart metering market because of uncertainty over implementation dates as well as less attractive overall economics.
SMS trades 0.9% higher today at 395p. The AIM 100 Index is up 0.4%.