Lombard Risk is a niche provider of regulatory reporting and collateral management software with a strong position in a fast-growing market. It is halfway through a two-year plan that has already delivered a step change in revenue performance, accelerated the delivery of key new products and resulted in the creation of a world class development centre in Birmingham. Objectives for the current year include further development initiatives, transitioning development capabilities into the Birmingham office and cash profitability. We expect comfortable double-digit annual revenue growth and a return to cash profitability over the next few years. This will be delivered by new product sales, partnership successes and cost management. In our view, the current valuation fails to reflect this positive outlook, good revenue visibility and reducing earnings risk. We initiate coverage with a Buy and 16p target price.