Stifel on Tuesday initiated coverage of MHA plc with a buy rating and set a one-year target price of 205p, which the broker said represents about 35% upside relative to the stock's closing price of 151.5p on Feb. 16.
The 205p target rests on a discounted cash flow valuation that applies a weighted average cost of capital of 9% and assumes a terminal growth rate of 2.5%. At that target, Stifel noted the implied one-year forward price-to-earnings multiple is approximately 18.7x.
Stifel also observed that the stock is trading on a separate one-year forward P/E of 13.8x today, a level the analysts described as undemanding for a company with a long track record, substantial recurring revenues and what they view as compelling growth avenues.
Company profile and recent market performance
MHA is a mid-market professional services group providing audit and assurance, tax, accountancy and advisory services. The firm floated on the AIM market in April 2025, raising gross proceeds of roughly A398 million at an initial issue price of 100p per share. Since listing, the shares have appreciated 51.5%, outpacing the FTSE All Share's 26% rise over the same timeframe.
Recent results and Stifel's forecasts
For the fiscal year ended March 2025, MHA reported revenue of A3224.2 million, a 45.5% increase from A3154 million the previous year. Stifel's projections call for revenue to reach A3250 million in fiscal 2026 and A3274.4 million in fiscal 2027. The broker models adjusted EBITDA of A344.3 million for fiscal 2026, implying an adjusted EBITDA margin of 17.7% in that year. On these numbers the stock trades at a one-year forward enterprise value to EBITDA multiple of about 9x, according to the note.
Revenue mix, clients and network position
Stifel highlighted MHA's high level of recurring revenue, estimating that approximately 87% of group revenues derive from recurring contracts, mainly annual audit and tax engagements. The firm reported a client retention rate above 90% across a base of roughly 17,000 clients. MHA operates as the U.K.'s sole member of Baker Tilly International, which Stifel notes was ranked eighth globally with US$7 billion in worldwide revenue in 2025.
M&A activity and medium-term targets
Since its AIM listing, MHA has completed two international acquisitions. The group acquired Baker Tilly South-East Europe, with revenues of AC19.4 million, for AC24 million at an acquisition multiple of 6.2x EV/EBITDA. It also bought Moore Stephens UAE, which had A36.5 million of revenues, for A37.4 million at a 6.7x EV/EBITDA multiple. Stifel noted both transactions were financed through combinations of cash and share consideration.
Management has set a medium-term revenue objective of A3500 million. Stifel said it views this target as attainable by fiscal 2030 assuming circa 8% annual organic growth plus around A3150 million of revenues added by acquisitions. The broker suggested that successful execution of that plan could support a market capitalization near A31 billion, more than double the current market cap of A3432 million.
Ownership, governance and lock-up arrangements
MHA's free float is approximately 35%, while partners hold around 55% of the shares and an Employee Benefit Trust controls about 9.8%. Partners are covered by lock-in provisions that prevent share sales for the first 24 months following the listing, and additional clawback arrangements extend through April 2030.
Risks and sensitivities
Stifel flagged several risks that could affect MHA's outlook: the potential departure of senior partners, rising competitive pressure from the Big Four accounting firms and from private equity-backed consolidators, and the impact of a broader slowdown in the U.K. economy on demand for professional services.
Outlook
Stifel's initiation places emphasis on recurring revenue, client retention and an acquisition-led growth strategy combined with organic expansion. The valuation metrics cited by the broker reflect a view that current multiples are not demanding relative to the group's growth prospects, while the execution of the stated M&A and organic growth plan is central to achieving the medium-term A3500 million revenue target and the A31 billion market-cap scenario described by the analysts.