Translation: Original published in Finnish on 03/30/2026 at 06:30 am EEST

Betolar has not announced any sales successes like in Q4'25 during the beginning of the year, on the back of which we estimate sales to have developed more subdued than we expected. As a result, we have lowered our revenue estimates for the current year and the coming years. Valuation remains tight in the short term, and question marks related to financing keep the risk level high. With this overall picture, the stock's risk/reward ratio remains modest despite the market potential. Reflecting our estimate changes, we lower our target price to EUR 1.1 (was EUR 1.3) and reiterate our Reduce recommendation.

We interpret sales to have progressed slower than we expected

In February, Betolar announced a strategic partnership with EcoGraf Limited and GTK for utilizing metal separation technology in processing the tailings of EcoGraf's Epanko graphite project. Otherwise, the company's news flow in the early part of the year has been quiet, which we interpret to mean that breakthroughs in commercialization, such as those announced in October, have not occurred. We expected new sales to continue on a strong trajectory during Q1, and we estimate that accelerating revenue growth in line with our forecasts would have required larger deals that exceeded the disclosure threshold. In our view, achieving revenue growth in line with our estimate from smaller orders is challenging for Betolar.

We lowered our short-term revenue estimates

Betolar guides that 2026 revenue would grow significantly from the previous year. This is in line with our estimate, and we expect revenue to grow to just under 4 MEUR in 2026 (2025: 0.9 MEUR). Growth in our estimate is driven by the delivery of the 1.4 MEUR order announced in Q4'25, but we expect revenue to grow in H2'26 relative to the H1'26 level. This requires successful sales during H1’26, which appears to have been more subdued than we expected during Q1’26. We expect EBITDA and cash flow to improve significantly in 2026 from the previous financial year, supported by revenue growth. For the current financial year, we expect EBITDA to be supported by planned support payments of 1 MEUR, which would correspond to the amount of subsidies raised in the 2025 financial year.

We lowered our revenue estimates as we interpret new sales to have progressed more slowly than our estimates. Similarly, we trimmed our cost structure estimates for the current fiscal year, as with lower-than-expected revenue, the company has togrow its cost structure more slowly in the short term than we previously expected. Therefore, the revenue estimate cut had only a slight negative impact on our short-term EBITDA and cash flow estimates. We expect Betolar to have to increase its spending from H2'26 onwards to enable growth, which would lead to EBITDA being roughly evenly distributed between the half-years. We estimate free cash flow to be -4 MEUR in fiscal year 2026 (vs. liquidity and undrawn grants of 7.7 MEUR in Q4'25). Thus, in our estimate, the funding need will arise at the beginning of fiscal year 2027.

Valuation remains tight

Due to Betolar's early development phase, the predictability of the business is lowand the risks associated with estimates are high. Based on our estimates expecting fast growth, Betolar's EV/S multiples (7x-4x) are at the level of the peer group. Our DCF model, which focuses on long-term potential, reaches EUR 1.1. However, options and financing needs put upward pressure on the number of shares in the model, which we believe limits the expected return. Stretched valuation combined with high business, financial, and estimate keeps the risk/reward ratio subdued in our books.