Research on Craneware plc (CRW:LON) from Capital Access Group
While Craneware reported top line results for the year to June in line with previously updated guidance, the impact of the disruption in the operation of the 340B drug programme in the US has proven much more severe than previously anticipated and the full impact of the cyber security incident has yet to be quantified. Consequently, Management are now guiding to revenue of cUS$185m for FY27, in line with Craneware's Annual Recurring Revenue (ARR). Further to guidance, we have reduced our revenue estimate for FY27 by 17% or US$39m with a knock-on impact across our forecasts. Multiple legislative efforts are underway to clarify the operation of the 340B programme, and it is highly likely that the loss in revenue will recover, potentially very rapidly. However, given the lack of visibility we only model adjusted earnings to approach FY26 levels by FY29. Given the fall in the share price, Craneware is trading below historic multiple ratings even on our revised forecasts while the share price is well below our revised discounted cash flow valuation of 1,979p.
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