This artificial intelligence AIM stock trades with an EV-to-EBITDA of just 4x!
Celebrus Technologies (LSE:CLBS) is an AIM stock with operations spanning artificial intelligence (AI), data capture and analysis, and cybersecurity. While AI stocks in the US often command eye-watering valuations, with enterprise value-to-EBITDA (EV-to-EBITDA) multiples regularly north of 30 times, Celebrus trades with extraordinarily low multiples.
Celebrus appears very cheap
Celebrus currently trades at an EV-to-EBITDA ratio of just four times — that’s far below the sector average and its US-listed peers. For context, global AI and data giants like IBM, Accenture, and Infosys are valued at 15 to 18 times EV-to-EBITDA, while high-growth names in cybersecurity like CrowdStrike and Snowflake fetch multiples as high as 94 times and 115 times, respectively. The sector average sits around 33 times.
So why the discount? Recent trading updates offer some clues.
Revenue set to disappoint, but it’s not all bad
On 22 April, Celebrus warned that full-year 2025 (FY25) revenues are expected to come in at $38.6m, down from $40.9m in FY24. The company cited a slowdown in customer decision-making amid an “increasingly uncertain” global geopolitical environment as the main culprit.
Despite the revenue dip, adjusted pre-tax profits are set to rise to $8.7m, up from $7.6m last year, thanks to higher-margin software sales and tight cost controls. That’s certainly positive and something that should be accounted for in forecasting for 2026 and 2027.
Building on this, there’s certainly cause to believe that Celebrus is undervalued. The company is in great shape financially, sitting on $31m in cash and no debt. This provides a solid buffer to weather near-term uncertainty.
But this also contributes to that very attractive EV-to-EBITDA ratio, as mentioned above. The net cash position is projected to reach around $54m by 2027. For context, that’s around £41m at the current exchange rate and only £27m below the current market cap.
I’d add that it can be a rarity to find growth-oriented small-cap stocks with oodles of cash. Typically, these companies have to use debt to fund growth. That’s not an issue here.
Analyst sentiment: significant potential
Despite recent operational weakness — Celebrus shares are down over 40% from their 52-week high and have underperformed the FTSE All Share index by 42% in the past six months — analysts remain bullish. The consensus price target is around 460p, implying the stock could be undervalued by as much as 170%.
The bottom line
I think Celebrus Technologies may offer rare value in a space where stocks are typically very expensive. Moreover, with a rock-bottom EV-to-EBITDA multiple, strong cash position, and a pivot toward higher-margin, recurring software revenues, it could be a very interesting prospect to consider.
As always, risks remain, especially around customer spending and contract transitions. What’s more, as an AIM-listed stock, it may simply be going under the radar. It could be better placed with a US listing.
However, some investors will argue that the deep discount may more than compensate for the uncertainty. For now, it’s a stock I’m going to watch closely.
The post This artificial intelligence AIM stock trades with an EV-to-EBITDA of just 4x! appeared first on The Motley Fool UK.
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James Fox has no position in any of the shares mentioned. The Motley Fool UK has recommended Accenture Plc, CrowdStrike, International Business Machines, and Snowflake. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
