CML Microsystems (LON:CML) – edging gently higher

08.07.2025

Ahead of its AGM Trading Update, on Tuesday 5^th August, it is good to see the shares of the microwave semiconductor group moving slowly ahead.

When I featured this little group less than three weeks ago, I clearly stated that it was a ‘real gamble’ situation.

With its shares at 235p, my Profile set a new Target Price of 290p – they are now 265p, after having touched 270p yesterday.

That feature was ahead of the Final Results to end-March 2025 being announced a week later – they proved much as expected.

At that time CEO Chris Gurry stated that: 

"With the successful completion of the operational phase of a multi-year transformational strategy, the business is now poised to enter a new chapter focused on sustainable growth and long-term value creation.

Over this period, we have fundamentally reshaped the business, enhancing efficiency, expanding our technology capabilities, and significantly broadening our product portfolio.

Supported by a strong financial foundation and a disciplined growth strategy, we are well-equipped to navigate current challenges and intend to continue investing in innovation, customer engagement, and strategic partnerships that will drive the business forward."

CML targets sub-segments within Communication markets with strong growth profiles and high barriers to entry.

It has secured a diverse, blue chip customer base, including some of the world's leading commercial and industrial product manufacturers.

Growth in its end markets is being driven by factors such as the appetite for data to be transmitted faster and more securely, the upgrading of telecoms infrastructure around the world and the growing prevalence of private commercial wireless networks for voice and/or data communications linked to the industrial internet of things (IIoT).

With some £9m cash in the bank, the £42m-capitalised group, which is cash-generative, which has no debt, and which is dividend paying, has an absolute mass of global market opportunities for its increasing portfolio of products.

Despite continuing challenging conditions, I now look for a positive AGM Statement in less than a month’s time helping to push the group’s shares even higher, with my 290p Target Price being an easy objective.

(Profile 19.06.25 @ 235p set a Target Price of 290p)