The trick is assessing these companies’ earnings potential and how they compare to today’s performances.

Here are five promising UK penny stocks that seem to be trading below fair value, based on future earnings estimates.

Now, let’s zoom in on hVIVO, because it’s one of the more exciting names in this space.

What hVIVO actually does

hVIVO’s a small UK company that runs clinical trials and lab tests, helping big drug companies test new medicines. Think of it as the ‘science lab for hire’ that big pharma calls when they need careful, controlled human trials completed quickly and safely.

Because demand for drug development and testing has stayed strong, it’s won more contracts and grown its business. It works with large biopharma clients and has built a decent order book. That gives it some visibility on future revenue – but does it equate to share price growth?

Recent growth and results

Financially, the company’s been doing well. In 2024, revenue climbed 11.9% to roughly £62.7m, and EBITDA jumped 26.7% to £12.92m.

Recent H1 2025 results were less impressive but the company reiterated high-single-digit revenue growth in 2026. This will be supported by acquisitions and a strong pipeline of both signed and potential contracts.

ROE, at 13% doesn’t scream huge profits but tells us the business is generating sufficient returns for shareholders. But the standout metric that caught my eye is the share price.

Over the last three months, it’s up more than 60%, which shows how quickly sentiment can change when a small company delivers good news. So can it grow further? Let’s check the valuation.

Valuation, dividends and balance sheet

Despite the recent jump, the valuation still looks quite sensible for a growth stock. With the price just 11.7 times forward earnings, there’s still lots of room for growth if the market sees potential here.

It also pays a small dividend, which is rare for penny stocks. Recent figures show a yield of around 2.4%, calculated from a regular dividend of 0.2p per share. In the past it’s even paid a special dividend when cash built up.

Importantly, the company is effectively debt‑free and sits on a decent cash pile, which gives it more flexibility to ride out any bumps and invest in growth.

Minimising risks

Penny stocks are always risky, and hVIVO’s no exception. Earnings can swing around if big contracts are delayed or cancelled, or if regulators change the rules around drug testing.

If funding for smaller biotech clients dries up, there could be fewer trials to run, impacting profits. On top of that, after a rapid price rise in a short time, the stock could be volatile – sharp dips are just as possible as further gains.

For invetsors building a small UK penny stock basket in their ISA, a company like hVIVO could be a sensible candidate to consider. But, as always, as part of a diversified mix — and with the expectation of some volatility.

The post Cheap as chips! Check out these 5 profitable UK penny stocks trading at bargain prices appeared first on The Motley Fool UK.

There’s another UK healthcare stock that’s performing far better in 2026, however. This year, it’s up almost 40%.

An exciting health stock

The stock I want to highlight today is hVIVO (LSE: HVO). It’s a small London-based healthcare company that specialises in services for clinical trials and lab testing.

Today, it provides end-to-end early drug development services to some of the largest biopharma companies in the world. To date, it has completed around 2,000 trials.

At present, this stock trades for just 8.7p. That means that a £1,000 investment buys roughly 11,500 shares.

It’s worth noting that the stock pays a small dividend. Currently, the yield is around 2.3%, however, with a penny stock like this, dividends are definitely not guaranteed.

Why the share price is soaring in 2026

Now, this stock has had a rough few years. In short, it got hammered when Donald Trump won the US election and selected vaccine sceptic Robert F Kennedy as Health Secretary (this created a lot of uncertainty within the biopharma industry).

However recently, it has started to tick up again. There are a few reasons why.

Firstly, both CEO Mo Khan and CFO Stephen Pinkerton bought stock in mid-December. The former purchased 3.3m shares near 6p while the latter snapped up 520,000 shares near 5.5p.

Insider buying like this is a bullish indicator — insiders don’t buy company stock if they expect it to tank.

Note that Khan’s purchase increased the size of his holding by 66% while Pinkerton’s buy increased his position size by 69%. So, these were material investments.

Second, the company put out a trading statement in late January in which it advised that revenue for 2025 would be in line with expectations and that adjusted EBITDA would be positive and above expectations. This was a relief as trading updates since Trump became US President have been poor.

More recently, the share price got a shot in the arm on 10 February after ILiAD Biotechnologies announced the closing of an oversubscribed $115m Series B financing to advance its next-generation whooping cough vaccine, BPZE1. hVIVO has signed a letter of intent with ILiAD for human challenge trials (HCTs), so the company could be looking at a jump in revenues as a result of this funding (analysts at Stifel believe it could be worth about £15m).

An investment opportunity?

So, is this stock worth considering for a portfolio today? I think so.

It’s not a stock I’d load up on. Because risk levels here are high – both revenue and profits could be volatile in the years ahead.

But I do see a lot of potential in the long run. Ultimately, this company is a ‘picks-and-shovels’ play on drug development.

If an investor is willing to take a five-year+ view (our preferred investment horizon here at The Motley Fool), I think this stock could do really well and is worth considering. Over that timeframe, the company could experience significant growth.

It’s worth noting that hVIVO shares currently have a price-to-sales ratio of just 1.2. That compares to 4.8 for US rival Medpace Holdings.

So, at 8.7p, there appears to be some value on offer.

The post £1,000 buys 11,500 shares in this red hot healthcare penny stock that’s smashing GSK appeared first on The Motley Fool UK.

Since then? It’s cratered over 65% to 9p. Talk about a rollercoaster!

I jumped on this white-knuckle ride in late 2022 at 11p, then had another nibble at 29p. By December 2025, I was down by more than 50% and had half-forgotten about hVIVO because it was such a small position.

I considered cutting my losses over Christmas, but didn’t bother. Now I’m thanking my laziness as it jumped 50% this week. What’s going on?

HCT leader

As a quick reminder, hVIVO specialises in human challenge trials (HCTs). These involve volunteers being infected with a pathogen in a controlled environment to test vaccines. The firm is a global leader in this niche area and recruits through its own FluCamp platform.

Growth was impressive, with revenue rising from £20.2m in 2020 to £62.7m in 2024. By then, the business had turned profitable, started paying a dividend, and was targeting £100m in revenue by 2028.

hVIVO even moved into a new state-of-the-art facility in Canary Wharf in 2024. Billed as the world’s largest commercial HCT centre, it has loads of high-tech quarantine bedrooms, significantly enhancing the capacity to run multiple trials simultaneously.

So the future was looking very bright for the company.

What went wrong?

Unfortunately things quickly unravelled. The share price first lurched down in November 2024 after Donald Trump won the election. Then again when he nominated Robert F Kennedy Jr to be his health secretary.

Kennedy was sworn in exactly a year ago yesterday (13 February), and hVIVO stock is down 59% since. The problem is that he’s a vaccine sceptic and the market priced in — correctly as it turned out — that this wouldn’t be positive for vaccine funding and clinical trials.

Consequently, revenue guidance for 2025 was lowered from £73m to £47m due to a subdued biotech funding environment and a number of HCT cancellations and postponements. Thanks Donald!

Management now expects a full-year loss for 2025, with the adjusted EBITDA margin shrinking from 26.2% in 2024 to mid-single digits.

Am I buying the dip?

The positive news recently was that ILiAD Biotechnologies had secured $115m in funding to develop a next-generation whooping cough vaccine. The US biotech expects to begin a pivotal phase III human challenge trial in 2026.

hVIVO has already signed a letter of intent with ILiAD, which would be the firm’s largest HCT to date. If converted to a contract, analysts at Stifel estimate it could be worth approximately £15m. Hence the stock’s big jump.

So, is hVIVO worth a look? Well, the company should return to growth this year, as a couple of acquisitions now position it as a “full end‑to‑end service platform from preclinical through to Phase III across multiple therapeutic areas.”

Meanwhile, the firm has £14.3m in cash on the balance sheet and no debt. Therefore, it’s not in financial danger despite falling to a loss.

That said, the US biotech funding backdrop remains tricky, especially for vaccines. So investors considering this penny stock should expect volatility.

It’s not one I’m buying right now.

The post I was a fan of this 9p penny share until Donald Trump did this… appeared first on The Motley Fool UK.

Still, I think there are moments when a penny stock deserves a closer look.

This September I’ve been keeping tabs on two names that have made promising progress recently. Sure, they come with risks, but for investors seeking growth opportunities, I think they’re both worth considering.

Pharos Energy 

Pharos Energy (LSE: PHAR) has been quietly building momentum. The share price is up 66.7% in the past five years and the company has managed to maintain dependable revenues along the way. 

Plus, with a dividend yield of 5.6% supported by a modest 27.5% payout ratio, income investors may also find this attractive.

Valuation-wise, Pharos looks cheap. A price-to-earnings (P/E) ratio of 4.9 suggests the market isn’t placing a high premium on earnings, which could make this an undervalued energy stock to consider. Importantly, earnings growth has been strong, pushing net margins up to 17.3%.

One of the most encouraging updates came with the extension of its licences for Vietnam oil and gas fields through to 2032. That provides much-needed certainty over future production and revenue streams. Meanwhile, the business has almost eliminated its debt, cutting borrowings from £62m three years ago to close to zero today.

The main risk, though, comes from liquidity and the balance sheet. Short-term liabilities of £108m outweigh current assets of just £59m, giving it a bloated quick ratio of 3.66. If cash flow dried up, the firm could quickly find itself under pressure. For that reason, investors should still tread carefully. 

But given the improvements to profitability and debt reduction, it’s a stock worth watching more closely.

hVIVO

Clinical research specialist hVIVO (LSE: HVO) is another penny stock making waves. Known for its human challenge trials, it recently posted a strong trading update for the first half of 2025. Revenue came in at £24.2m, keeping it on track for full-year expectations of £47m. The group also had a healthy £23.3m in cash as of 30 June 2025.

Growth has been supported by a healthy sales pipeline, with several large human challenge trial opportunities in advanced discussions. The company has also been expanding its offering, with clinical site and hLAB services gaining traction. Recent acquisitions of CRS and Cryostore added another £5.5m to group revenue in the first half alone.

But as with many biotech stocks, there are risks. Financing across the biotech sector remains under pressure, which could reduce client spending on trials. High fixed operating costs mean hVIVO needs strong contract flow to cover expenses. More critically, its revenue is heavily dependent on converting contracts and avoiding delays. A single cancellation can have a big impact, making forecasting difficult.

Still, with relatively low debt to equity, strong cash reserves and an expanding portfolio of services, I think it’s an intriguing stock for investors to consider – if they’re comfortable with potential volatility.

The post 2 undervalued penny stocks to consider this September appeared first on The Motley Fool UK.

So using the tried-and-tested valuation metrics that work on FTSE 100 stocks may not be as effective.

Here are a few tips to follow when trying to assess whether a penny stock could be a sound investment.

Cash is king

Check the company’s free cash flow (FCF). This is how it funds operations and growth without resorting to dilutive share offerings or expensive loans. Even if it shows an accounting loss due to non-cash expenses like depreciation, positive free cash flow indicates it’s generating real, usable cash.

Next, check operating cash flow. This reveals if the underlying business model is working, even if accounting profits are negative. Furthermore, if cash flow’s consistently higher than earnings, it may point to non-cash write-offs rather than operational weakness.

Stability

For a company to be stable, it must have manageable debt levels and a reliable business model. Penny stocks typically can’t borrow heavily, so low debt levels are generally a good sign. A manageable debt load gives a company more flexibility and lowers the risk of insolvency. 

Look for debt-to-equity (D/E) ratios under 1 — this is the safe zone (but zero or minimal debt’s even better).

Unlike most blue-chip stocks, there’s less assurance that a small business is reliably managed and well-positioned. Ask – is it innovative, and is there a large enough market for its products or services? It also pays to check whether insiders (employees, management) are buying shares in the company. 

If they’re selling, that’s a big red flag!

One example

Consider the cutting-edge research organisation hVIVO (LSE: HVO), a London-based company that conducts vaccine and treatment trials. Its state‑of‑the‑art quarantine facility in Canary Wharf is the largest of its kind in the world.

The company’s operating margin is an impressive 15% and it has a 20% return on capital employed (ROCE). Both are strong signs of profitability. Debt looks manageable, with a low D/E ratio of 0.29.

Its FCF’s £9.72m but, more importantly, its price-to-cash flow (P/CF) ratio’s a decent 6.58. This equates the share price with cash flow, and ideally should be below 10.

Plus, its price-to-earnings (P/E) ratio’s only 7.5, so it has decent growth potential.

Yet despite all this, the shares are down 60% in the past year. This is partly due to a 34% drop in earnings growth year on year, even though revenue grew 12% in 2024. Subsequently, the company’s net margin has almost halved since 2023.

But most of the losses occurred only last month when a key contract was cancelled, prompting a profit warning. If further cancellations occur, it could result in a single-digit loss for the full year. 

This highlights the volatility risks associated with small-cap shares.

Overall, I still think hVIVO’s an impressive company with lots of potential and is worth considering. It has strong fundamentals, offers a highly innovative service and operates in a niche market.

But like all penny stocks, it’s high risk/high reward.

The post Don’t get caught short! Here’s how to identify penny stocks with long-term potential appeared first on The Motley Fool UK.

Now, I’ve had hVIVO on my watchlist for years – and have always been impressed with the company – but never actually bought any shares. Is now the time to do so? Let’s discuss.

A shocking trading update

First, let’s look at what has happened here.

On Friday, hVIVO posted an update and it wasn’t good. For a start, the company announced that it had received notification of a significant human challenge trial (HCT) contract cancellation as well as a postponement and a smaller study cancellation.

The company noted here that these customer decisions were most likely related to the high level of uncertainty in the pharma industry and the depressed biotech financing market. “The current volatility in the pharmaceutical industry, particularly in the US, is impacting the whole Contract Research Organisation (CRO) industry and has led to an increase in cancellation rates, postponement of clinical trials, and delays in approvals for new projects,” wrote management.

Additionally, it said that as a result of these cancellations/postponements, it now only has £47m of revenue contracted for 2025. Before this update, analysts were expecting full-year revenue of around £75m.

It’s worth noting that the company said that it expects to achieve further contract wins during the course of the year. However, it said that should these not materialise, revenue of £47m would result in a mid-single-digit operating loss for the full year.

Some positives

I’ll point out that CEO Dr Yamin Khan was relatively upbeat about the long-term growth story. “We still remain confident in the continued growth of human challenge trials and the overall prospects for hVIVO as we also continue to diversify our revenue streams and build our offering as a full-service CRO,” he said.

Another positive was that the company said that it still has a “strong cash position” and is well funded to execute on its strategy of building a sustainable and diversified business.

Overall however, the update was a bit of a disaster and as result investors dumped the stock in droves.

The bull case versus the bear case

Looking at the stock today, I’m torn between the bull case and bear case.

Taking a bullish view, the long-term story still looks relatively attractive. Over the next decade, pharma companies are still going to require clinical trial services as they develop new drugs and hVIVO with its new facility in Canary Wharf, London is well placed to capitalise.

Meanwhile, the market cap here is now only around £75m. That could turn out to be a steal given that the company had around £44m cash on its books at the end of 2024.

There was also some insider buying yesterday (2 June). This was from the CEO and the CFO.

Taking a bearish view, however, there’s a lot of uncertainty about revenue growth and earnings potential in the years ahead. So, it’s hard to value the stock right now.

I’m also a bit concerned about customer concentration risk. It’s a little worrying that the loss of a few customers is going to see revenue drop significantly.

Should I buy?

Weighing everything up, I’m going to hold off on buying this penny stock for now. At present, there’s just a little too much uncertainty.

The post Should I buy penny stock hVIVO after its fall to 10p? appeared first on The Motley Fool UK.

A brutal reaction from investors to an unexpected trading update brought the company’s market cap below £100m, having spent most of the past two years above this level.

The group describes itself as “the world leader” in human challenge clinical trials. It claims to operate the world’s largest quarantine facility in London and boasts seven of the 10 biggest biopharma companies as its customers.

What’s the problem?

But blaming uncertainties in the pharmaceuticals industry — and a lack of liquidity in biotech financing — the group reported that it had “received notification of a significant human challenge trial contract cancellation alongside a postponement and a smaller study cancellation”.

After taking into account the cancellations, the company was able to confirm that it still has £47m of contracted revenues for the year ending 31 December 2025 (FY25). However, if no further work’s secured, the company’s expected to report a “mid-single-digit” operating loss.

Of course, given the market uncertainty, there’s little the company could do. But the news is particularly disappointing given that just seven weeks ago, the directors issued FY25 revenue guidance of £73m.

At this stage, it’s unclear how this will affect the group’s progress towards its target of £100m of turnover by 2028.

For FY24, the company reported an operating profit of £12.9m and adjusted earnings per share of 1.67p.

Not all bad

However, the business should be able to cope with its current problems. Due to a strong balance sheet — at 31 December 2024, it had £44.2m in the bank and no debt — it has the financial firepower to fund this year’s anticipated losses.

Positively, the group’s pipeline is reported to be at record levels with some “high probability” opportunities possibly providing “significant revenues” in FY26.

And unusually for a company that’s in its infancy, it’s about to pay a dividend costing £1.4m. After last week’s share price drop, the stock’s yielding 2.5%. Given the group’s healthy cash position, I think the payout appears secure for now.

Mixed opinions

But leaving aside Friday’s drop of 46%, the company’s share price performance has been disappointing.

Since June 2020, it’s fallen 36%. Over the past 12 months, it’s down 67%. And it’s now 72% below its 52-week high.

However, analysts appear upbeat. Of the six covering the stock, all are recommending that their clients take a position. The average 12-month price target is 32p, with a range of 24p-43p. The shares closed on 30 May at 8.7p. But it’s important to remember these forecasts were prepared before the trading update was released to the stock market.

Although the group has lots going for it, it’s not my kind of investment. The decline in its market cap — before last week’s bad news — suggests investors are losing patience. Also, the contract losses are likely to further dent confidence in the company’s prospects.  

And as I get older, I can’t afford to wait for a business to establish itself. An investment in hVIVO would be too risky for me.

The post After falling 46% in a day, hVIVO’s become a penny stock… again! appeared first on The Motley Fool UK.

To give a flavour, the share price today has dropped 5% to 19p, as I write. However, in the two weeks prior, it had surged nearly 30%. Over five years, it’s up 252%, but down 36% since mid-November. Did I mention that it’s volatile?!

Looking through the update though, I think there are a couple of concerns as well as long-term potential.

What happened?

For those unfamiliar, hVIVO is a contract research organisation (CRO) that specialises in human challenge trials (HCTs). These involve recruiting healthy volunteers — signed up through its own FluCamp recruitment platform — and exposing some of them to pathogens to test vaccines and therapeutics.

Today, the company actually delivered two announcements. First, there was the trading update for 2024, which showed 12% year-on-year revenue growth (£62.7m) and a strong EBITDA margin of approximately 26% (up from 23.3% in 2023). It ended the year with £44.2m in cash, up from £37m the year before.

Operationally, hVIVO made solid progress, opening the world’s largest commercial HCT unit. This 50-bedroom facility has also enabled the firm to diversify its offerings to include laboratory services for external clients. Earlier this month, it inked its largest standalone lab contract signed to date (£2.7m).

The second announcement offered guidance and related to the acquisition of a pair of clinical research units from a CRO in Germany. The company said this deal “further diversifies hVIVO’s services to include in-patient Phase I and Phase II trials across a broader range of therapeutic areas“.

The acquisition cost €10m, funded entirely from hVIVO’s existing cash resources. However, while the units recorded unaudited revenue of nearly €20m last year, they also reported an adjusted EBITDA loss of €1.8m.

Why is the stock down?

So, the firm is using cash to buy loss-making businesses abroad. Moreover, it plans to spend another €2.5m on integration costs in 2025. Consequently, management has warned that this will impact EBITDA margins in the short term, guiding for mid-to-high teens (significantly less than last year’s 26%).

However, it also expects the acquisition to contribute positively to earnings by 2026. And it gives hVIVO a “significant footprint” in Europe while offering “considerable cross-selling opportunities” due to a broader client base.

Looking forward, it expects revenue of £73m this year, including this deal. If we assume similar revenue at the acquired business (around £16m), then this suggests core revenue will be flat or declining, hinting at weak organic growth. That’s not ideal.

Then again, the firm has previously stated that it expects acquisitions like this to help get it to £100m in revenue by 2028.

My view

Stepping back, I think the market reaction today is understandable. However, the stock at 19p may still be worth considering for patient investors.

Given this is a business with a modest £129m market cap though, I’m keeping my holding small relative to my overall portfolio. That way, I can benefit if it goes up while minimising damage if it doesn’t.

The post Looking for UK shares to buy? This 19p small-cap down 5% today may be worth considering appeared first on The Motley Fool UK.

One interesting Buffett-influenced investor is fund manager Guy Spier. In 2008, he participated in a $650,100 charity lunch with the Oracle of Omaha.

In his book, The Education of a Value Investor, Spier frequently references Buffett as a central influence. However, in a recent podcast, he shared how his investment approach would differ if he were starting out in his 30s with ‘just’ $1m.

Here’s what he said.

Taking some risk

Now, to be clear, Spier manages more than $280m in his fund. He’s worth quite a bit. Therefore, $1m to him might be the equivalent of, say, £10,000 to a retail investor like myself.

Indeed, I’m trying to build towards a £1m (or $1.2m) portfolio, rather than starting off with that amount!

Nevertheless, the same principle applies, as it’s about growing a modest amount of money (relatively speaking) into something much larger.

Spier sensibly says that he would have living expenses covered and debt paid off before starting. That way, all focus can be on preserving and growing the portfolio through compounding rather than needing to draw upon it to survive.

With that sorted, he says he would want to take higher risks. Specifically, he would divide that sum into at least 10 shares. While they wouldn’t be too speculative so as to risk losing all the invested capital, each one would still “have a high enough probability of returning multiples of my money“.

Spier mentions making a couple of investments a year, with the aim of sevenfold returns from some over a five-year period.

Which type of stocks?

The fund manager says he would generally look at companies with a market cap under $1bn (£800m). Due to their smaller size, these have a better chance of becoming multibaggers, at least in theory.

Interestingly, Spier cites AIM companies listed in London as a place where he might look. These tend to be smaller enterprises, making AIM fertile waters to fish in for opportunities.

One I like

I agree with the general theme here. One AIM stock I hold is hVIVO (LSE: HVO), which has a market cap of just £133m.

This is a fast-growing contract research organisation specialising in testing infectious and respiratory disease vaccines and therapeutics through human challenge trials. These are where volunteers are exposed to pathogens in a controlled environment. hVIVO works with global pharmaceutical firms.

The share price has struggled lately, falling 33% in the past six months. This weakness appears related to the election of Donald Trump and concerns that vaccine research might be deprioritised, leading to fewer sales opportunities. This is a potential risk here.

However, in December, hVIVO signed an £11.5m contract with a top-tier global pharma client, then this week inked a £3.2m project, its largest standalone lab contract signed to date.

Meanwhile, the profitable company has reiterated its confidence in reaching £100m in revenue by 2028, up from £62m last year. And the best bit here is the valuation, with the stock trading at just 11.7 times this year’s forecast earnings.

From 19p, I reckon it could generate very nice returns.

The post If he had $1m today, here’s how this Warren Buffett disciple would build wealth appeared first on The Motley Fool UK.

The market cap had also surpassed £200m by then, disqualifying it from being called a penny stock. In the UK, those are often seen as stocks with a market cap under £100m as well as a share price beneath 100p.

Now, as I write (26 December), the share price has pulled back sharply to 19.56p. I’m still up, but I also bought shares in the summer at 29p and that purchase is down sharply too.

To be fair, I knew what I was getting myself into, as small-caps and penny stocks are prone to stomach-churning bouts of volatility. This one’s certainly been no exception to the rule.

Yet I’m ready to take one last nibble on hVIVO shares in early January. Here’s why.

What is hVIVO?

For those unfamiliar, hVIVO is a firm that specialises in human challenge trials (HCTs), a growing niche market within the massive contract research organisation industry.

HCTs involve deliberately infecting healthy volunteers with a pathogen in a controlled environment to test treatments. The firm recruits these paid volunteers — many of them students in need of some cash — through its own FluCamp business.

hVIVO works with four of the top 10 global pharmaceutical companies. It conducted the world’s first Covid HCT during the pandemic, generating data that advanced understanding of the virus and helped guide vaccine development.

However, ‘vaccine’ has become a bit of a dirty word in some quarters following the US election.

Dark clouds

In November, Donald Trump nominated vaccine-sceptic Robert Kennedy Jr to lead the Department of Health and Human Services. We don’t know whether he’ll get the gig, but the market isn’t waiting to find out. The hVIVO share price is down 30% since then.

The fear seems to be that if major pharmaceutical companies anticipate a hostile regulatory or funding environment under Kennedy, they might reduce investments in vaccine-related projects. This could affect hVIVO’s pipeline of contracts and growth trajectory.

But the future still looks sunny

The truth is we don’t yet know how things will play out. What we do know however is that the company recently signed an £11.5m contract with an unnamed blue-chip pharmaceutical client to test a new antiviral candidate for respiratory syncytial virus (RSV).

This virus affects around 33m people annually, leading to approximately 4m hospitalisations worldwide and 101,000 deaths in children under five years old.

CEO Yamin ‘Mo’ Khan commented: “This contract further demonstrates the trust and confidence that leading pharmaceutical companies place in hVIVO’s human challenge study models.”

The study is scheduled to commence in H2 2025, with revenue recognised across 2025 and 2026. For 2024, management expects revenue of £62m, with a healthy EBITDA margin of around 22%-24%. And it’s targeting £100m in revenue by 2028.

hVIVO is an industry leader in human challenge trials, a market which is expected to grow from $100m-$150m today to as much as $1bn in the years ahead.

The business is highly cash generative and debt free. It’s even started paying a small dividend.

Lastly, with the stock on a forward price-to-earnings multiple of 11.7, the valuation looks very attractive.

The post 1 near-penny stock I’m buying for the last time at 19p appeared first on The Motley Fool UK.