Berenberg downgraded GB Group Plc to hold from buy, citing elevated customer attrition in the U.S. and intensifying competition from Socure, a rival identity verification provider.
The bank reduced GBG’s price target to 190 pence from 260 pence and lowered its fiscal 2027 revenue growth forecast to 1%-3%, down from previous mid-single-digit guidance. Berenberg also trimmed its adjusted operating margin outlook to about 21%, from a prior range of 21%-22%.
Analysts reduced GBG’s revenue estimates for fiscal 2027, 2028 and 2029 by 3%, 5% and 7%, respectively. Adjusted operating profit estimates were cut by 7%, 6% and 10% over the same periods. Free cash flow yield for fiscal 2027 is now estimated at 9.3%.
GBG’s shares closed at 160 pence on Sept. 1, valuing the company at £381 million. The company’s gross margin has declined from 77.4% in fiscal 2018 to 69.5% in fiscal 2026, reflecting competitive pricing pressure.
Berenberg noted that only 42% of GBG’s fiscal 2026 revenue came from term-based subscriptions, limiting visibility into long-term performance. The bank highlighted Socure’s rapid growth, with annual recurring revenue rising 63% year-on-year to $364 million in the second quarter of 2026, alongside near-zero logo churn and 133% net dollar retention.
Berenberg analysts stated that the combination of high U.S. attrition and limited visibility into GBG’s business model makes it difficult to achieve both growth acceleration and margin expansion in the near term.
