Cerillion PLC (LSE: CER) a UK-based software provider listed on the FTSE AIM 100, specializes in billing, charging, and customer relationship management (CRM) software. The firm's core activity is the design and delivery of telecommunications software solutions and related equipment. Cerillion’s operations are organized into four key segments: Services, Software, Software-as-a-Service (SaaS) & Others. 

Key Investment Rationale – Speculative Buy at GBX 1,450.00

• Growth in Recurring Revenue Base: The company demonstrated an increase in its recurring revenue, which grew to £8.2 million from £7.6 million in the prior period. This type of revenue, derived from support, maintenance, and managed services, provides a predictable and stable income stream. An expanding recurring revenue base contributes to revenue visibility and can enhance the resilience of the business model against fluctuations in one-off licence sales.

• Expansion of the Back-Order Book: Cerillion reported a notable increase in its back-order book, which reached £50.2 million at the period end and further grew to £56.5 million by the end of April. This metric, representing contracted revenue yet to be recognised, indicates a healthy volume of future work already secured. The growth in this figure suggests a sustained demand for the company's solutions and supports future revenue recognition.

• Strengthened Cash Position and Balance Sheet: The group's net cash position improved to £31.2 million, up from £26.6 million a year earlier, with no debt. This improvement in liquidity, coupled with a rise in net assets, indicates a capacity to fund ongoing operations, invest in research and development, and pursue strategic opportunities without relying on external financing.

• Continued Product Development and Innovation: Cerillion maintained its investment in research and development, evidenced by the release of its Cerillion 25.1 update. The introduction of features like a new Promotions Engine and GenAI-powered assistants for billing and sales demonstrates a focus on enhancing product functionality and addressing market needs for automation and improved customer engagement tools.

CER Daily Chart & Valuation

One Year Technical Price Chart (as of August 19, 2025). Source: REFINITIV, Analysis: Kalkine Group

For conducting the valuation, the following peers have been considered: Pinewood Technologies Group PLC (LSE: PINE), Made Tech Group PLC (LSE: MTEC), etc.

As per the above-mentioned price action and technical indicators analysis, a ‘Speculative Buy’ rating has been given on Cerillion PLC (LSE: CER) at the Current Market Price of GBX 1,450.00, as of August 19, 2025, at 10:35 AM GMT + 1.

Markets are trading in a highly volatile zone currently due to certain Macro & Micro-economic data and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

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 19 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.’

Note 6: Dividend Yield may vary as per the stock price movement.