Numis starts coverage of Darktrace at 'buy'

It said that while the company remains the target of a high degree of scepticism, this is misplaced.

"The group's innovative product set provides a significant additional layer of security, with a very large market opportunity," the broker said. "One new piece of analysis that has not previously been published elsewhere is a comparison of the cost of growth for Darktrace with other leading subscription cyber companies.

"Measured by gross profit added/opex, Darktrace is best in class, along with CrowdStrike."

Numis thinks risk to consensus forecasts remains on the upside, with consensus expectations implicitly assuming a significant deterioration in the efficiency of the group's growth.

It added that Darktrace's valuation (3.7x CY23 EV/sales) is a circa 40% discount to the global peer group, taking into account its growth rate.

At 0940 GMT, the shares were up 2.7% at 352.20p.