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innoscripta (1INN)
15th March 2026
Initial Take
BUY / LONG
View Report
Diaceutics PLC (DXRX)
8th February 2026
Initial Take
BUY / LONG
View Report
Disclaimer: The information provided by Hircus Research is for informational purposes only and should not be construed as investment advice. Investing in securities involves risk, including potential loss of principal. Hircus Research and its team may hold positions in securities discussed. We are not registered investment advisors. Conduct your own due diligence before making investment decisions.
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innoscripta (1INN)

15th March 2026
Initial Take
BUY / LONG
Click to View Full Report

Executive Summary

innoscripta is the undisputed leader in German R&D tax-credit SaaS, and one of the most attractive growth software businesses listed in Europe. The company combines hyper-growth revenue (51% CAGR from 2021–2025), best-in-class EBIT margins (61% in FY25), near-zero capital intensity, and a structurally expanding market — yet trades at approximately 9x forward EBIT, a valuation more consistent with a low-growth consulting business than a platform SaaS company with a 60%+ margin profile. The current entry point, at roughly 40% below the IPO price, is in our view a liquidity-driven anomaly rather than a reflection of business fundamentals.

The core product — the innoscripta Platform and its Clusterix enhancement — digitises the entire R&D tax-credit lifecycle under Germany's Research Allowance Act (FZulG). There is no comparable end-to-end software solution in the German market. The company commands approximately 16% of all BSFZ applications, operates with exclusive 3-to-5-year auto-renewal contracts, maintains churn below 2%, and has built this position entirely organically, without M&A. Once a client signs, competitors are contractually locked out. These are not soft competitive advantages; they are structural, compounding moats.

FY25 results confirmed the thesis with force. Revenue grew 60% to EUR 103.4m and EBIT grew 70% to EUR 63.4m — demonstrating that growth is increasingly margin-accretive, not margin-dilutive. The balance sheet carries EUR 34m of net cash and essentially no fixed assets or goodwill. Return on invested capital exceeds 80%, placing innoscripta among the highest-quality businesses on any European exchange.

Looking forward, FY26 brings two hard regulatory tailwinds — the assessment base cap rising from EUR 10m to EUR 12m, and the introduction of a 20% flat-rate overhead surcharge — both of which mechanically increase the subsidy volumes that innoscripta charges commission on, without any increase in sales effort. Management has guided revenue of at least EUR 140m (+35% growth) and EBIT of at least EUR 80m for FY26.

Our DCF fair value is EUR 206 per share, implying 187% upside from the current price of EUR 72. Continuous insider buying through late 2025 and early 2026 (EUR 13.1m of open-market purchases by both founders at an average of ~EUR 81/share) provides a powerful market-based validation of this mispricing — creating a significant asymmetric risk/reward buy opportunity.

Key Investment Highlights

  • Undisputed market leader in a nascent, structurally expanding market. Germany's R&D tax credit scheme is less than six years old — yet comparison with France (scheme introduced 1983) and the UK (2000) suggests the German market has the potential to grow 10-to-15-fold as corporate adoption matures. innoscripta already commands ~16% of all BSFZ applications, operates with exclusive 3–5 year auto-renewal contracts, and maintains churn below 2% across 2,500+ customers. There is no comparable end-to-end software competitor in Germany. This dominant position was built entirely organically.
  • Best-in-class financial quality, confirmed and accelerating. FY25 revenue of EUR 103.4m grew 60% YoY; EBIT of EUR 63.4m grew 70% YoY — EBIT outpacing revenue by 10 percentage points, translating into 370bps of margin expansion to 61.3%. ROIC exceeds 80%. FCF conversion is ~95% of net income. Capex is below 0.3% of revenue. These are the metrics of a platform business at full maturity, in a market that is still in its first innings.
  • Two mechanical regulatory tailwinds take effect in FY26, not yet in consensus. From 1 January 2026: (1) the R&D assessment base cap rises from EUR 10m to EUR 12m, enabling up to 20% higher commission per large client with no additional sales effort; (2) a new 20% flat-rate overhead surcharge automatically increases approved R&D cost bases for all clients. Both apply to the existing book of business. Management guidance of EUR 140m+ for FY26 does not fully reflect these tailwinds — the guidance is a floor, not a point estimate.
  • A 5%+ dividend yield from a 60%-margin growth business — a structural mispricing signal. Management has proposed a FY25 dividend of EUR 40.0m (EUR 4.00/share), implying a 5.3% yield at the current share price. This is exceptional for any software company, let alone one growing revenue at 40%+. The yield creates a hard valuation floor, expands the potential investor base, and directly contradicts the market's implicit assumption that this is a high-risk, capital-hungry growth story.
  • Founders are buying stock aggressively at current prices. Between June 2025 and February 2026, the two CEOs purchased shares in the open market for EUR 13.1m at an average of ~EUR 81/share — well above the current price. The largest single transaction was EUR 5.5m at ~EUR 70 on 3 February 2026. Founders with 68% combined ownership and full visibility into the business are adding exposure at these levels. The signal is unambiguous.
  • The current entry point is a liquidity-driven anomaly, not a fundamental one. The stock trades 40% below its May 2025 IPO price and ~47% below its November 2025 all-time high, despite a business that has materially outperformed every financial expectation since listing. The decline is explained entirely by a 16% free float that amplifies selling pressure, broader SaaS multiple compression, and within-year H2 growth phasing concerns. None of these impair the medium-term earnings trajectory.
  • International expansion is a free call option on a market several times the size of Germany. The UK and France have R&D tax credit regimes 20–40 years more mature than Germany's, with structurally higher uptake rates. innoscripta's low-code/no-code Clusterix platform requires minimal localisation. Management is building organic country teams on a disciplined "prove-it" mandate, structured to be margin-neutral in the near term. No value is ascribed to international expansion in our base-case DCF — any revenue contribution from FY27 onwards is pure upside.
Disclaimer: The information provided by Hircus Research is for informational purposes only and should not be construed as investment advice. Investing in securities involves risk, including potential loss of principal. Hircus Research and its team may hold positions in securities discussed. We are not registered investment advisors. Conduct your own due diligence before making investment decisions.
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Diaceutics PLC (DXRX)

8th February 2026
Initial Take
BUY / LONG
Click to View Full Report

Executive Summary

Diaceutics is at the exact point where its multi-year transformation from consultancy to scalable data platform begins to translate into profitability, high recurring revenue, and visible operating leverage — yet the market still values it like a services business.

The FY25 Trading Update confirms the inflection: a return to profitability, ARR up 21%, a record £36.8m order book, and 25% revenue growth guided for FY26 with most already contracted. Recurring revenue now represents ~65% of sales with NRR of 109%, creating a clear earnings floor.

DXRX is not a "nice-to-have" tool for pharma — it is the infrastructure required to commercialise precision medicines. Without optimised diagnostic testing, eligible patients are never identified. With 20 years of proprietary data from 2,500+ labs and 600m+ patient records, Diaceutics owns a dataset that is effectively impossible to replicate. This data moat compounds as more pharma and labs join the network.

After a deliberate £8m investment cycle in 2023–2024 to build the platform, data, and US presence, the cost base is now set. As revenue scales, margins expand rapidly. We see this operating leverage as the key driver of value over the next 3–5 years.

At ~3.7x EV/Revenue, the stock is priced as a consultancy, not as a high-margin healthcare data platform with structural growth, embedded customers, and SaaS-like economics.

Our fair value of 293p implies 76% upside. Downside is supported by a debt-free balance sheet, strong cash position, and contracted recurring revenues. Upside is driven by growth, margin expansion, and an inevitable re-rating as the market recognises what Diaceutics has become: critical infrastructure for precision medicine.

Key Investment Highlights

  • An irreplaceable data moat compounds with scale. Twenty years of proprietary diagnostic testing data from 2,500+ laboratories across 51 countries — including 600m+ longitudinal patient records — is not something a competitor can buy or build quickly. The dataset becomes more valuable with every incremental customer and data point, creating a reinforcing flywheel.
  • Essential, irreplaceable value proposition. Every precision medicine brought to market needs its diagnostic testing ecosystem optimised or patient uptake fails. DXRX is the only platform that solves this end-to-end — from real-time lab data through to physician engagement — and 18 of the top 20 pharma companies already rely on it. There is no credible alternative.
  • A data moat that is effectively irreplicable. Twenty years of proprietary testing data from 2,500+ laboratories and 600m+ patient records cannot be bought or built by a competitor in any commercially relevant timeframe. A two-sided network effect compounds the advantage: more pharma customers attract more labs, which enrich the data, which attracts more pharma. NRR of 109% confirms customers deepen — not reduce — their reliance over time.
  • Consistent, strong organic growth with record forward visibility. Revenue has compounded at 25% over three years with zero M&A. The order book of £36.8m (+48% YoY) covers ~77% of FY2026 consensus, and ARR of £20.3m (+21%) provides a contractually underpinned baseline. Management guides 25% growth for FY2026; this is not an aspiration — it is already largely in the book.
  • Clear profitability inflection with significant operating leverage ahead. Cash EBITDA is expected positive for the first time in FY2025 (~£2.5m), the direct payoff from a deliberate ~£8m investment cycle. The fixed cost base is now built. As recurring revenue scales from here, incremental margins are very high — we model Cash EBITDA margins reaching ~10% by FY2027 and ~25% at terminal scale.
  • Strong return potential from re-rating and M&A optionality. At 3.7x EV/Revenue the stock is still priced as a consultancy, not a platform. A re-rating to 5x — still below healthcare SaaS peers — alone implies ~230p. Separately, DXRX's unique dataset and customer base make it a highly attractive acquisition target for larger CROs or HealthTech platforms. Our 293p fair value does not require a takeover, but one would represent meaningful upside on top of the base case.
  • Limited downside at current levels. The company is debt-free with ~£11m cash and no financing requirement. ~65% recurring revenue and 109% NRR create a contractual earnings floor. Even in a bear case — growth slowing to 15% and margins flat — the stock is not expensive on an EV/Revenue basis. The asymmetry is clear: downside is capped by the recurring revenue base; upside is driven by margin expansion and re-rating.
Disclaimer: The information provided by Hircus Research is for informational purposes only and should not be construed as investment advice. Investing in securities involves risk, including potential loss of principal. Hircus Research and its team may hold positions in securities discussed. We are not registered investment advisors. Conduct your own due diligence before making investment decisions.

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