CKT's revenue growth slowed to +3% y/y in 1H26 (FYJan25: +18% y/y) while the company focuses on achieving EBITDA profitability in FY27. Understandably this has had an effect on CKT's rating, but we think it's overdone as CKT now trades on 1x ARR. Whereas, last month Digi (DGII.US), a provider of hardware and software for use in Internet of Things products and networks, acquired Jolt for $145.5m, 7.3x Jolt's $20m of ARR (c.£14.6m - similar to CKT's £14.0m). Jolt is similar to CKT, providing solutions to digitally manage deskless workflows in convenience stores and the food and beverage industries. We believe the acquisition demonstrates the pent-up demand for solutions like Jolt and CKT's, particularly in the US - a geography that CKT is targeting for growth (25% of 1H26 revs). While some of Jolt's premium could be attributed to its (undisclosed) faster growth and profitability, Digi expects to unlock c. $11m (£8m) of annualised cost synergies with its first 18 months of ownership. Which we think highlights how a large strategic buyer could provide the scale needed to quickly grow ARR in a profitable manner, which suggests CKT's small scale may not be an issue and that its shares are undervalued.
