Nexteq PLC 

Nexteq PLC (LSE: NXQ) is a business-to-business (B2B) technology company listed on the FTSE AIM All-Share index. It partners with industrial sector clients by taking on the design, development, and supply of technology hardware for elements of their products that are outside the clients' core expertise.

Key Recommendation Rationale – Sell at GBX 74.00

• Resistance near Current levels: NXQ’s stock price crossed the Resistance (R1) which was stated in the previous report on 31 December 2024 therefore, there could be a possibility that the stock might consolidate or decline from the current levels, considering overstretched valuation. Considering the market conditions and the price action, it is prudent to exit from the stock.
• Year-on-Year Revenue Contraction: Group revenue for H1 2025 is expected to be approximately USD 40.7 mn, representing a decrease of 15.6% compared to the USD 48.2 mn reported in H1 2024. Both divisions, Quixant and Densitron, contributed to this decline, with their revenues falling by 13.1% and 20.1% respectively.
• Substantial Reduction in Net Cash Position: The Group's net cash balance has decreased from USD 36.9 mn on 30 June 2024 to USD 28.1 mn on 30 June 2025, a reduction of 24.0%. While this is partly due to capital returns to shareholders, the operating cash inflow of USD 2.1 mn for the half-year appears modest relative to the cash outflow from financing activities.
  
  

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

One-Year Technical Price Chart (as of August 22, 2025). Source: REFINITIV, Analysis: Kalkine Group

Conclusion

Group revenue for the first half of 2025 was USD 40.7 mn, a decrease of 15.6% from the USD 48.2 mn reported in the same period of 2024. This contraction was observed in both operating divisions, with Quixant's revenue decreasing by 13.1% and Densitron's revenue decreasing by 20.1%. The Group's net cash position was USD 28.1 mn as of 30 June 2025, compared to USD 36.9 mn a year prior. This represents a reduction of 24.0%. The decrease is attributed in part to capital returns to shareholders. The operating cash inflow for the period was USD 2.1 mn, which was lower than the cash outflow from financing activities.

For conducting the valuation, the following peers have been considered: Tortilla Mexican Grill PLC (LSE: MEX), Deliveroo PLC (LSE: ROO), etc

Given its current trading levels, the recent strategic investments and partnerships, relative valuation, and associated risks, it is prudent to exit the stock at the current levels.

Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of GBX 74.00 as of 22 August 2025 at 11:33 AM GMT + 1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 22 August 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’