Cyan - Risks to consensus but solid fundamentals
Cyan’s share price has fallen c 30% since the beginning of 2020. Financials fell short of guidance in FY19 and COVID-19 is delaying some sales and technical integration in FY20. The near-term picture is uncertain, and we see further risks to consensus, but the long-term fundamentals remain healthy in our view. Demand for mobile cybersecurity is being fuelled by the rising use of phones for e-commerce and banking. The company is still targeting both ‘significant’ revenue growth and margins above 50% in the medium term. Applying a peer group multiple (11x FY21e EV/EBITDA) to updated consensus implies 17% upside to the share price.
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