We were already bullish on the stock, but a 32%-plus share price rally in a week from Sopheon (SPE:AIM) has surpassed our expectations.
The Surrey-based software group streamlines the research and development process and provides product lifecycle management (PLM) tools.
'Interims to June continue the very strong momentum demonstrated over the past 12 months,' says FinnCap analyst Andrew Darley.
'After upgrades in March 2016 with prelims, interims have led us to review and further improve forecasts,' he states.
'Sopheon’s decision to transition from being a provider of process automation tools to delivering innovation management solutions looks to be paying dividends,' says Lee Prout, analyst at IT consultancy boutique Megabuyte.
TechMarketViews' John O'Brien offers more insight. 'Sopheon’s Accolade software is designed to help enterprises manage all aspects of their new product development lifecycle, so that they can make smarter business decisions about which products to develop and how to bring them to market faster,' he comments.
'It offers an integrated suite of applications covering innovation planning and roadmaps, idea and concept development, process and project management and portfolio and resource optimisation.'
'The share price move has been nothing short of astonishing, soaring from 71.5p ahead of 2015 results announcement in March to 202p now. That's the highest they've been in more than five years. Yet even at this new rarefied altitude the stock remains far from expensive, showing just how out-of-favour the story had been.'
This mirrors our view on Sopheon as per our recent article.
FinnCap has upgraded its 2016 EBITDA (earnings before interest, tax, depreciation and amortisation) estimates by 13%. It has also boosted 2017 forecasts by 4%, even with anticipated expansion of operating spending (opex) through the second half.
Darley has also completely rethought the stock's value potential, lifting his target price from 150p to 360p 'with the hoped for momentum evident, and even surpassed'.