Intrinsic Value Checkit plc (CKT.L)

• Previous Close: £18.50
• Intrinsic Value: £6.05
• Upside potential: -67%

Stock Valuation Context

Business Model And Market Position

Checkit plc operates in the software-as-a-service (SaaS) sector, specializing in intelligent operations management platforms tailored for deskless workforces. The company’s core offerings include connected workflow management, automated monitoring, building energy management, and IoT-driven operational insights. Serving clients in the UK and the Americas, Checkit leverages cloud-based solutions to enhance efficiency and compliance in industries reliant on mobile or distributed teams. Its rebranding from Elektron Technology in 2019 reflects a strategic pivot toward digital workflow optimization. Positioned in the competitive enterprise software market, Checkit differentiates itself through niche applications for operational visibility and real-time data analytics. The company targets sectors like facilities management, healthcare, and logistics, where regulatory compliance and process automation are critical. Despite its modest scale, Checkit’s focus on IoT integration and energy management aligns with broader trends toward sustainable and smart operations. Its market position remains emergent, with growth potential tied to adoption of its SaaS platform in underserved deskless workforce segments.

Revenue Profitability And Efficiency

Checkit reported revenue of £14.1 million for FY2025, alongside a net loss of £3.6 million, reflecting ongoing investments in platform development and market expansion. Operating cash flow was negative £1.1 million, while capital expenditures of £2.6 million indicate sustained investment in technology infrastructure. The diluted EPS of -3.33p underscores current profitability challenges, though the SaaS model may yield scalability benefits over time.

Earnings Power And Capital Efficiency

The company’s negative earnings and cash flow highlight its growth-stage status, with capital primarily allocated to product enhancement and customer acquisition. The absence of dividend payouts reinforces a reinvestment strategy. Checkit’s capital efficiency metrics remain under pressure, though its low debt (£0.6 million) and £5.1 million cash reserve provide runway for operational execution.

Balance Sheet And Financial Health

Checkit maintains a conservative balance sheet, with cash and equivalents of £5.1 million against minimal total debt (£0.6 million). This liquidity position supports near-term flexibility, though persistent cash burn warrants monitoring. The equity-heavy structure (108 million shares outstanding) suggests reliance on equity financing, typical of growth-oriented SaaS firms.

Growth Trends And Dividend Policy

Revenue growth trends are not disclosed, but the SaaS model’s recurring revenue potential offers long-term upside. Checkit retains all earnings for reinvestment, with no dividend policy—a common approach for loss-making tech firms prioritizing expansion over shareholder returns. Adoption of its IoT and energy management tools will be critical to future top-line acceleration.

Valuation And Market Expectations

With a market cap of £16.7 million, Checkit trades at a modest multiple relative to revenue, reflecting its unprofitability and niche focus. The low beta (0.46) suggests limited correlation to broader market movements, possibly due to its small-cap and specialized nature. Investor expectations likely hinge on SaaS adoption rates and path to profitability.

Strategic Advantages And Outlook

Checkit’s IoT and workflow automation expertise positions it to capitalize on digital transformation in deskless industries. However, execution risks persist, including competition from larger SaaS providers and reliance on UK/Américas markets. Success depends on scaling its platform while improving unit economics. The outlook remains speculative, contingent on operational milestones and cash flow stabilization.

Sources

Company filings, London Stock Exchange data