Cyber security and risk mitigation company NCC Group (GB:NCC) is riding right high on a wave of increased digitisation and growing cyber threats across every industry: cyber is a good place to be right now.
Could it be a good time to buy?
The company has strong growth in profits and the company is on track for another successful year.
But the company’s stock has not seen the same growth and has been trading down by almost 20% in the last year. Analysts are optimistic about the share price.
What does NCC Group do?
NCC Group is a cyber security solution provider that helps businesses across different sectors access and manage their cyber threats in a safe way.
The company provides services such as assessment and advisory, software escrow and verification, compliance, detection and response, etc in a huge number of markets including the UK, the U.S., UAE, Australia, Japan, Singapore, and Germany.
NCC Group results
Recently, the company posted record revenues and profits in its full-year results for the fiscal year 2022.
The company’s revenue increased by 16.4% to £314.8 million with strong second-half revenue growth across all regions. The North American revenues were also supported by its acquisition of the intellectual property business of Iron Mountain.
The acquisition also helped the company to post higher gross margins of 42.1% as compared to 40.9% in 2021.
Profits before tax grew by a record 109.5% to £31 million. The company’s dividend, however, remained unchanged at 3.15p per share, the same as last year’s.
The road ahead
NCC belongs to a growing industry that is promising for investors. The company’s adjusted earning per share EPS grew to 10.8p in 2022 from 9.5p in 2021. This is not an easy growth to achieve for most companies. Analysts expect this trend to continue.
During this year, the company also appointed a new chief executive, Mike Maddison, after Adam Palser decided to step down. Mike has a vast range of experience from companies like EY, PwC, and Deloitte, where he handled cyber security operations.
Jefferies analysts said, “NCC Group’s new CEO has numerous strategic options to create shareholder value against a favorable market backdrop.”
NCC Group share price forecast
According to TipRanks’ analyst rating consensus, NCC stock has a Moderate Buy rating.
The NCC price target is 260p, which implies an upside potential of 15.3%.
Conclusion
The cybersecurity industry provides a huge scope for growth and NCC remains positive that it can ride on this growth and hit its targets for the next year.
