1 of my top UK shares is up 15% in a day! Is it still a buy for me?

Celebrus (LSE:CLBS) is among the UK shares I’ve been including to my portfolio for the reason that begin of the yr. And the inventory surged 15% right this moment (8 July) after the corporate launched its full-year outcomes. 

The enterprise is performing nicely, with robust development throughout the board. Regardless of this, the inventory remains to be down 40% for the reason that begin of the yr, so ought to I hold shopping for?

Development

Celebrus is a software program agency with a product that enables companies to trace exercise on their web sites and apps in actual time. Not like rivals, it does this with out counting on cookies.

Regardless of being a UK enterprise, the corporate experiences its revenues and earnings in US {dollars}. And each gross sales and earnings have been up considerably from the earlier yr.

The important thing metric with the sort of enterprise is Annual Recurring Income (ARR), and this grew 13.9% to $18.8m. Earnings per share (EPS) elevated by simply over 36% to 18.24c.

Individually, the corporate introduced two new contracts – one with a European financial institution and one other with a US fintech agency. These are set to spice up ARR by $1.1m within the first yr and extra sooner or later. 

Evaluation

Earlier this yr, Celebrus had provided cautious earnings steerage. Administration cited the chance of an unsure geopolitical atmosphere inflicting companies to be cautious with their spending.

Given this, I feel the most recent outcomes are very constructive. And the corporate continues to display its broad attraction, with new prospects together with a world airline and a serious fintech.

One factor I’m aware of, nevertheless, is the actual fact the reporting interval solely finishes on the finish of March – so earlier than the current tariff uncertainty. That’s an ongoing danger, particularly in the intervening time.

General, I see the outcomes as a resilient efficiency throughout what ought to have been an unusually difficult yr. Given this, I feel the present valuation nonetheless appears to be like engaging. 

Valuation

At right this moment’s trade charges, the full-year outcomes imply Celebrus shares are buying and selling at an (adjusted) price-to-earnings (P/E) ratio of slightly below 13. That’s after the most recent transfer within the share value.

That’s fairly low in comparison with different tech shares, however the firm additionally has round a 3rd of its market worth in internet money on its steadiness sheet. Adjusting for this, the inventory appears to be like even cheaper.

I don’t suppose this precisely displays the corporate’s development prospects. Celebrus has orders in place that ought to enhance ARR to virtually $20m – a ten% enhance on the latest outcomes. 

I’m anticipating larger gross sales to result in larger margins, which ought to lead to sooner development in EPS. On this foundation, a P/E ratio of lower than 13 appears to be like like a cut price to me. 

Shopping for?

I nonetheless suppose Celebrus has some spectacular prospects and the present share value appears to be like like a cut price to me. On that foundation, it’s staying on my record of shares to contemplate shopping for.

The share value shifting larger means the inventory now accounts for fairly a little bit of my portfolio. So just for causes to do with diversification, I want to think twice about what to do.