Five AIM shares with potential for share price recovery

There are 88 companies currently quoted on AIM where their share prices have at least halved since the beginning of the year. Some of these companies are in financial trouble or their markets are tough. Others may have had challenges, but their longer-term prospects remain good.

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Here are five companies with potential for share price recovery. While they may not bounce back immediately, the businesses should prosper over the next couple of years.

Rosebank Industries

Share Price: 339p
Year to date: -61.3%

Rosebank Industries Ordinary Shares (LSE:ROSE) joined AIM as a cash shell on 11 July 2024 after raising £50 million at 250p/share. This year, it raised £1.16 billion at 300p/share to finance its maiden acquisition. That was at a large discount to the market price and led to a slump at the time of the fundraising.

Rosebank Industries was set up by former Melrose Industries management. Chief executive Simon Peckham and non-executive director Christopher Miller founded Melrose in October 2003. The strategy is to identify underperforming industrial and manufacturing companies, acquire them and improve their performance.

The cash shell started discussions for the purchase of critical electrical distribution systems supplier Electrical Components International Inc (ECI) and initially could not come to an agreement. Talks restarted and there was an agreed $1.9 billion (£1.4 billion) deal. 

ECI supplies electrical distribution systems, control box assemblies and other engineering components to a wide range of markets. There have already been measures taken to improve margins, including the closing of the ECI head office in St Louis.

Consensus forecasts for 2026 are for a pre-tax profit of £93.6 million, rising to £108 million in 2027. The shares are trading on 21 times prospective 2026 earnings, falling to 18 the following year. Further efficiencies and add-on acquisitions could improve profitability. The management has a strong track record and evidence of the improved performance of ECI should enable the share price to rise.

Corero Network Security

Share Price: 10p
Year to date: -50.0%

Cybersecurity services provider Corero Network Security (LSE:CNS) has an up and down record. It had a profitable 2024 but has fallen back into loss this year. This is partly due to a switch in strategy away from upfront deals to managed services.

Corero increased annual recurring revenues by one-quarter to $21.6 million in the first half because of demand for managed services, but recognised revenues are lower. There is short-term pain, but the company will benefit in the longer-term.  

Cybercrime levels continue to grow, and it is important for companies and other organisations to protect themselves against attacks. Many have outdated security, and technology is changing all the time leading to new threats. Regulations relating to cybersecurity are also getting tougher.

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The global cybersecurity market is set to grow by 14.4% a year to $563 billion by 2032. Corero is focusing on growth in North America, and the chief executive is based in the US. Recent contact wins show the success of the strategy. Third-quarter order intake was $7.4 million, and a major order will contribute $6 million in the fourth quarter.

Current 2025 guidance is full-year revenues of $24 million to $25.5 million, which would mean that there was growth in the second half. Canaccord Genuity forecasts revenues of $24.1 million, down from $24.6 million in 2024, and an operating loss of $3.5 million. The broker expects growth in revenues but another loss in 2026. Revenues could rise to $27.5 million in 2026.  

The value of the business is in the growth in annualised recurring revenues. There is cash in the bank and Corero has a solid base to grow from. The recurring revenues should be valued much higher than they currently are. Although there are losses, the company is cash generative. If the share price does not recover, Corero would be an attractive add-on to a larger cybersecurity business.

AOTI Inc

Share Price: 37.5p
Year to date: -66.2%

Wound-healing technology developer AOTI Inc (LSE:AOTI) is already generating revenues and profit. AOTI raised £19.5 million at 132p when it joined AIM on 18 June 2024, but the share price has fallen back. Uncertainties about the funding of healthcare in the US have held back the rate of growth, but revenues are still growing.

AOTI has developed products that help to heal chronic wounds by focusing oxygen on them. An at-home therapy device delivers oxygen topically into the wounds, including diabetic foot ulcers and pressure ulcers. Diabetes levels are increasing, and this is the core market. The oxygen therapy device reduces the recurrence of diabetic foot ulcers compared with standard care.

AOTI increased interim revenues from $26.3 million to $31.8 million, and it swung into profit. However, growth has slowed because of US government spending initiatives that caused disruption. Veterans Administration-funded growth was limited because employee numbers were reduced, and this disruption was continuing in the second half, with an improvement anticipated before the end of the year.

AOTI has been awarded a California Medicaid provider ID, which is the third state to grant this. California has 14.9 million enrolled in Medicaid. However, the latest US legislation wrangles could hamper the progress of overall Medicaid revenues.

Panmure Liberum was recently appointed as joint broker alongside Peel Hunt. This could help AOTI to attract additional investor interest. Strong cash flow meant that AOTI could move to a net cash position next year. The shares are trading on around 10 times prospective 2026 earnings, which is too low for a growth business, and when there is more clarity in the US healthcare market there should be a re-rating.

Manchester-based Northcoders was founded in 2015 and focuses on various forms of IT training.

Northcoders

Share Price: 35.5p 
Year to date: -80.5%

Software training is important for the UK economy, so Northcoders Group (LSE:CODE) should be prospering. However, government changes to funding for IT and other training has led to shortfalls in revenues this year as the older contracts come to an end. There has been a move to a regional model of funding, which means that there will be smaller contracts. These contracts have to be tendered for, so any wins are unlikely to make a significant contribution until next year.

Manchester-based Northcoders was founded at the end of 2015 and focuses on various forms of IT training. It has also launched consultancy business Counter, which is winning new contracts. It has won £700,000 of contracts in recent weeks. 

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Interim revenues were 16% lower at £3.7 million due to the loss of government funded work. There will be a bigger decline in the second half and there will be a 2025 loss. Net cash was £900,000 at the end of June 2025.

There are no forecasts at the moment. Once the broker restarts publishing forecasts this should help the shares, which are trading at around 50% of net assets. The Counter consultancy business is growing and should help Northcoders return to profit next year. Further training and consultancy contract wins will help and the share have a good chance of rebounding when the benefits show through in the figures. 

Finseta

Share Price: 14.75p
Year to date: -57.2%

Cross-border payments services provider Finseta (LSE:FIN) was hit by customers delaying US dollar transactions due to foreign exchange volatility. The company facilitates cross-border payments for small- and medium-sized businesses and high net worth individuals, but transactions do not go through its balance sheet.

Shore downgraded its forecasts and estimates a loss of £400,000 on an 11% increase in revenues in 2025. Costs have risen due to expansion and revenues are not rising fast enough to cover this.

Finances have been improved by the restructuring of the £2 million loan note held by Robert O’Brien, who is head of the UAE office. The loan note was due to be redeemed in July 2026. The repayment date for £1.8 million has been extended to the end of 2028 and the interest rate raised to 8.5%, while the other £200,000 has been converted into shares at 19p each. He has also reduced his commission share on certain revenues.

There was cash of £2.3 million on 12 November. Directors have been buying shares since the interims. Chief executive James Hickman bought 50,000 shares at 16.05p each and 14,700 shares at 14.59p each. Chair Gareth Edwards bought 30,000 shares at 16.08p each, finance director Judy Happe acquired 12,500 shares at 16.45p each and non-exec Simon Bullock bought 25,000 shares at 15.46p each. This indicates their long-term confidence.

Finseta has a scalable technology platform and should return to profit in 2026, although it won’t be until 2027 that a significant profit is likely to be made. If it achieves the 2027 pre-tax profit of £3 million then the prospective multiple would be less than five. Pushing more volume through the business without further significant rises in costs will enable profit to improve rapidly. Once momentum is regained the share price should at least return to previous levels.

Andrew Hore is a freelance contributor and not a direct employee of interactive investor.