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On 1 January, I highlighted three penny stocks to consider buying for 2026. One of those was Made Tech (LSE: MTEC), a fast-growing technology company that helps the UK government with digital transformation.
Already, Made Tech’s share price is up 24% since the start of the year, which is a great return in seven-and-a-half months. However, looking at analysts’ forecasts, it could have much further to run.
This company has momentum
Since my article in January, there has been a lot of positive news here. Not only have results been strong but the company has won some big contracts.
In February, Made Tech told us that revenue for the six-month period ended 30 November was up 28% year on year. It also said that trading was ahead of expectations. Then in April, it announced that it had won a £19m contract with the Government Digital Service (GDS). That’s a big win for a company worth less than £60m.
In late June, we got a full-year trading update (for the year ended 31 May) that was very encouraging. Here, the company said that trading was ahead of recently upgraded market expectations.
Meanwhile today (18 August), the company said it’s just won the largest contract in its history. This is a four-year contract with a UK government department worth around £40m.
A game-changing deal
This latest contract sounds like a bit of a game-changer. Because it’s expected to propel revenue for the current financial year to range £63m-£66m – well ahead of the consensus forecast of £60.3m.
As a result of this deal, the company now has a backlog of around £115m. That’s about twice its expected sales for the financial year recently ended.
“This is the largest contract award in our history and marks an important milestone in our growth. The award also endorses our position at the centre of a number of critical programmes across government.”
Made Tech CEO Rory MacDonald
Analysts are bullish
Given this deal, I believe this penny stock’s still very much worth considering for an ISA or Self-Invested Personal Pension (SIPP). I still see a lot of potential.
Believe it or not, it still trades at a very reasonable valuation, despite all the great news this year. Currently, the forward-looking price-to-earnings (P/E) ratio’s only about 15.
It’s worth noting that the average analyst 12-month price target is 60p. That’s about 40% above the current share price. So I’m not the only one that is bullish here. I’ll point out that a few of my colleagues here at The Twelfth Magpie like the stock too.
Of course, penny stocks like this are higher-risk investments. In this case, there are risks around tech spending by the UK government – if this dropped Made Tech could suffer.
All things considered however, I like the risk/reward set-up. I believe this stock is worth a closer look.
But it’s not the only UK stock with a lot of potential…
Should you invest £5,000 in Made Tech Group Plc right now?
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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Made Tech Group Plc made the list?
Edward Sheldon does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
