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  • Writer's pictureMark Watson-Mitchell

Cirata – Having More Than Doubled In The Last Six Weeks, Were Its Shares Running Too Fast?

Are the shares of the £71m capitalised data transfer company Cirata (LON:CRTA) being chased by investors far above their real value?

In the last six weeks alone, they have risen almost 120% from 38p to a High of 85p – a performance that confounded many market observers who have looked at how the Sheffield-based company is progressing.

The company, which used to be known as WANdisco, is classed as a very high risk/reward play on the growth of data migration to the cloud and the ability of new management to scale its technology and pivot from firefighting to growth.

The shares have since eased back to 62p.

The Business

Cirata, accelerates data-driven revenue growth by automating data transfer and integration to modern cloud analytics and AI platforms without downtime or disruption.

With Cirata, data leaders can leverage the power of AI and analytics across their entire enterprise data estate to freely choose analytics technologies, avoid vendor, platform, or cloud lock-in while making AI and analytics faster, cheaper, and more flexible.

Cirata's portfolio of products and technology solutions make strategic adoption of modern data analytics efficient and automated.

Core use cases include cloud analytics and AI activation, data modernisation, disaster recovery, and Hybrid cloud data architectures.

Impressive Client List

The company claims that its solutions are trusted by hundreds of global brands and industry leaders such as Allianz, AMD, Apple, Daimler, Envest | Yodlee, GoDaddy, HM Health Solutions, Juniper Networks, KOBIC, Manulife, NatWest and Sanlam, The University of Sheffield,

Analyst’s View

At Liberum Capital, its analysts Andrew Ripper and Caspar Erskine initiated the broker’s research coverage on the company in mid-April this year, rating the shares as a Buy at 43.5p, looking for 80p as their Price Objective, so that has already been left behind.

They noted that the company has a credible new management team that is pivoting from firefighting to a growth-orientated agenda.

Data is increasing fast and Cirata’s proprietary technology helps clients to migrate it to the cloud at scale.

The group has a growing pipeline and should deliver sequential acceleration of bookings and revenue over FY24-26E, post the Q1 low.

Their estimates for the current year to end December look for a 43% increase in sales to £10.0m (£7.0m) while pre-tax losses could more than halve to a £13.8m (£29.0m loss).

For 2025 they see £20.0m of sales helping to cut losses to £5.1m.

However, the brokers are going for £30.0m of sales in 2026 and breaking into £2.9m of profits, worth 0.02p per share in earnings.

Update Soon

The group should be announcing its Q2 Trading Update next month, with its Interims due in September.

Caution Advised

Very prudently the analysts comment that Cirata, is only suitable for investors with a very high-risk tolerance and there is uncertainty regarding whether it can scale quickly enough to become self-financing before running out of road.

The shares, which are now back to 62p, could so easily swing lower on profit-taking or rise phoenix-like back up to the 85p level again.


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