Kainos Group (LON: KNOS) reported its half-year results on Monday, prompting an upgrade from Berenberg analyst Benjamin May.
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The Belfast-based software firm reported a 16% rise in half-year profits to £34 million. In addition, sales increased by 26% to £180 million.
“Despite the economic uncertainty, there is an urgency from our customers about extending existing projects and starting new projects,” commented Kainos Chief Executive Brendan Mooney, adding that the “business is becoming increasingly resilient.”
On Wednesday, in reaction to the interim results, May upgraded Kainos to Buy from Hold, raising the firm’s price target on the stock to 1,700p from 1,200p.
The analyst told investors in a research note that Kainos delivered strong first-half fiscal 2023 results, with growth above expectations. He added that with Kainos management commenting that many customers are “accelerating” their digital investment agendas, it seems there will be no slowdown in the near term.
According to TipRanks, three out of three analysts they track have assigned Buy ratings on Kainos shares, with the average price target at 1,612.5p, representing a potential 6% upside from current levels.
Kainos shares gained over 4% during Wednesday's session and are up another 1% so far on Thursday. Still, they have declined more than 22% in 2022.