Bank and broker analysts express their opinion on: FTSE companies, along with a 12-month target price. While this isn’t always true, taking into account the average price target set by multiple experts can provide a good indicator of sentiment around a particular company. So what’s the story behind the share I’m looking at today?

I’m talking about Gamma Communication (LSE:GAMA). The company’s stock has dropped 32% over the past year, and yet it remains at a high level FTSE250. Therefore, we are not talking about diminutive shares that can bring potentially enormous profits.

The share price is currently 899p. I see 11 different forecast authors, lowest at 1080p and highest at 1820p. A noteworthy mention concerns Barclaysand the team forecasts a price of 1,600p next year.

Based on the average price target of 1,483p, if this price is achieved it would represent a 65% upside from current levels. Even if this average is not achieved, even the lowest expected price is higher than the current UK share price.

Taking a step back

Before I get into my opinion, it’s essential to understand why the stock has fallen over the past year. A 32% decline is not something you can get rid of!

This company is a cloud telephony provider that sells related technologies and software. Unfortunately, diminutive business demand was weaker due to economic conditions, which dampened organic revenue growth.

Furthermore, there are currently structural changes taking place in the industry due to the switch-off of the PSTN network in the UK. This process, which involved shutting down the ancient copper telephone network, was delayed and reduced short-term profits. This is because customers replacing ancient equipment with fiber optic solutions often generate lower profit margins for Gamma.

While this risk remains in the future, last month’s update showed that full-year adjusted EBITDA is expected to be in the consensus range of £140m to £143m. Therefore, the company is still profitable and performing well, although not at the growth rate that some expect.

Well placed

There are plenty of reasons to believe the company’s stock could do well in the year ahead. A broader shift to cloud communications is underway. The range is well positioned to benefit from this constant movement. It is also seeing robust growth in the German market, with a enormous number of companies there not taking full advantage of cloud communications, which represents a lucrative opportunity.

While I believe the stock could rise in 2026, I don’t see the potential for a 65% upside. Where would that come from? However, I believe that after the price drop, the company looks quite valuable, so investors should consider it. From this point on, it’s anyone’s guess what the rebound range will be!