Up 85% year to date, Rolls-Royce is the hottest stock on the London Stock Exchange right now and Britons can’t get enough of it. Week in, week out, investors continue to buy it. However, there are other stocks that could outperform Rolls-Royce over the next year.
Here’s one that has far more potential, according to City analysts.
The UK tech stock you’ve never heard of
The stock in focus today is GlobalData (LSE: DATA). It’s an under-the-radar technology company that provides an analytics and insights platform – embedded with artificial intelligence (AI) technology – designed to help organisations get more out of their data.
Listed on the UK’s Alternative Investment Market (AIM), it currently trades for just £1.41. Its market-cap is £1.15bn however, meaning that it’s a well-established company and not some early-stage tech start-up.
Analysts are bullish
Zooming in on analysts’ forecasts here, the average price target’s £2.38, around 69% above the current share price. If that share price was to be hit, a £2,000 investment could grow to £3,376. Meanwhile, a £5,000 investment could grow to £8,440.
Going back to Rolls-Royce, the average price target there is £9.18, which is about 15% below the current share price. So analysts clearly see a lot more potential in this tech stock.
I’ill point out however, that analysts’ forecasts should always be taken with a grain of salt. Investment research isn’t an exact science and forecasts often turn out to be off the mark.
I see tons of potential
Taking a closer look at this company however, I can see why analysts like it. For starters, it’s growing at a healthy clip (helped by acquisitions). This year, revenue’s forecast to come in at £329m, an increase of 15% year on year.
Secondly, the valuation looks quite low for a data/tech company. With analysts forecasting earnings per share of 8.66p this year, the forward-looking price-to-earnings (P/E) ratio’s only 16.4.
Third, the company has a lot of quality. Return on capital (a key measure of profitability) is quite high while the balance sheet’s strong.
Finally, the company plans to move its stock to the UK’s main market later this year (it could join the FTSE 250 index). This could lead to significantly more interest from institutional investors (many of these investors can’t buy AIM stocks) and light up its share price.
“As we enter the second half, we look forward to joining the Main Market and believe that our continued investment in the business and platform, our strong balance sheet, cash flows and significant M&A firepower offers shareholders a compelling long-term opportunity for strong returns”.
GlobalData H1 results
Worth a look?
Of course, it’s not perfect. The main risk for me is competition. Data analytics is a competitive industry and it’s hard to know if this company has a genuine advantage.
Economic weakness is another key risk. This could lead to less spending on data analytics from businesses.
It’s also worth mentioning that right now, the company’s in the midst of a transformation period designed to boost growth. This hurt earnings in the first half of 2025 and it could continue to do so in the near term.
Weighing everything up however, I see a lot of appeal here. I believe this stock’s worth considering today.
