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Penny stock Made Tech (LSE: MTEC) is having a great day today (Wednesday 10 December). As I write this, it’s up more than 25%.
Analysts reckon it can climb much higher though. Currently, the average 12-month price target is well above the current share price.
Strong half-year trading update
The reason the stock is up today is that the company – which helps government organisations and regulated industries with digital transformation – just put out an impressive trading update. For the six-month period ended 30 November, performance was significantly ahead of expectations.
Revenue for the period was approximately £27.7m, up 27% year on year, driven by good sales momentum. Meanwhile, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) is expected to be around £2.4m, up roughly 33% on the prior-year period.
At the end of the period, the company had a contracted backlog of around £74m, providing “good contractual coverage” for the remainder of FY2026 and into FY2027. Net cash at the end of the period was £11.9m (the company is debt free).
As a result of this bumper performance, the company now expects trading for the full year FY2026 to be “significantly ahead” of current market expectations. Revenue is expected to be up around 10% year on year with adjusted EBITDA margins increasing, reflecting improved operational gearing.
The first half of 2026 has been an exceptionally strong period for both revenue and adjusted EBITDA, building on the momentum seen in FY25. The UK Government has emphasised the significant role technology will play in delivering its priorities, and we believe the Group continues to be well-positioned to capitalise on these opportunities. Consequently, we remain optimistic and confident in our outlook.
CEO Rory MacDonald
Further share price gains ahead?
Can this penny stock keep rising? I think so – it doesn’t look particularly expensive.
Currently, the consensus earnings per share (EPS) forecast for next financial year (FY2027) is 2.1p. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of just 16.
I think that’s good value for a technology company that has a solid track record (over the last five years revenue has climbed from £5.5m to £46m) and looks set to benefit from the powerful long-term trend of digital transformation. At that earnings multiple, I see room for further upward valuation re-ratings if performance continues to be strong.
It’s worth noting that the average share price target within the analyst community is currently 55p. That’s approximately 62% above the current share price, so analysts clearly see a fair bit of investment potential here.
Not the only opportunity in the UK market today
Of course, penny stocks like this are higher up on the risk spectrum. So, it’s not the type of stock to go ‘all in’ on.
Risks here include a slowdown in tech spending from the UK government, higher-than-expected costs, and general weakness in the stock market.
All things considered, however, I think it’s worth a closer look. It’s just one of many opportunities I am seeing in the market right now though.
