Translation: Original published in Finnish on 08/14/2026 at 07:00 am EEST

Bioretec's revenue in early 2026 continued its positive development from the comparison period, but profitability fell short of our estimate. However, growth stabilized in Q2 compared to the previous quarter. Geographically, the strongest development was seen in the US (+134% vs Q2’25). The profitability undershoot relative to our estimate was due to sales representative model costs, which increased more than we expected. Regarding our estimates, we left our revenue estimates unchanged, but decreased our earnings estimates due to higher costs. Following the estimate changes, we revise our target price to EUR 0.024 (was EUR 0.026). We feel the risk/reward ratio remains unsatisfactory after the share price increase and estimate changes, so we downgrade our recommendation to Reduce (was Accumulate).

Revenue grew briskly from the weak comparison period

Q2 revenue grew organically by 62% year-on-year to 1.10 MEUR, slightly below our 1.20 MEUR estimate. Growth came from all regions: Europe grew by 64%, the US by 134%, and the rest of the world by 34%. According to the company, growth was generated by an expanded customer and distributor network, as well as higher volumes. RemeOs sales are still not reported separately, making it difficult to assess the commercial progress of the product family. Absolute volumes are still small, so individual distributor orders can cause significant volatility in the figures from one quarter to another. Revenue decreased from Q1's 1.22 MEUR, meaning that the development of consecutive quarters does not yet support the interpretation of a continuous growth trend.

Costs exceeded our estimates

The Q2 EBIT was -2.31 MEUR (Q2’25: -3.37 MEUR) and clearly missed our -1.75 MEUR estimate. The comparison period's result included a non-recurring expense of 1.1 MEUR due to the repurchase of inventories. Considering this, operating expenses increased by 9% from the comparison period. Three factors explain the difference between the actual result and our estimate: 1) the level of revenue, 2) seasonally higher personnel expenses than we expected, and 3) a lower gross margin than we expected, which we believe is due to the costs of the sales representative model. The change negotiations concluded in June will bring annual savings of 0.2 MEUR on top of the previous 0.4 MEUR.

Growth estimates unchanged - earnings expectations cut

We keep our revenue estimates for the coming years unchanged, as revenue fluctuations from quarter to quarter are still quite large, and the recent report does not change our view on the likely growth trajectory. We are making a more significant cut to our EBIT estimate for 2026–28, as our previous assessment of sales representative model costs proved overly optimistic. The report offered few concrete figures on the structural growth of sales, so visibility into the company's business development is low even in the short term. We look forward to future quarters and information on sales development, as well as new indications and product launches.

The share has potential, but risks currently outweigh it

EV/S multiples on our 2026-27 estimates are 4.7-4.0x. We find the multiples moderate in absolute terms, but not particularly low across the board compared to the cheaper peer companies. Based on our DCF model, there stock has no significant upside. We believe the share has a lot of potential if revenue develops faster than our estimates. On the other hand, potentially slow progress combined with unprofitability keeps the risk level very high. Currently, visibility into the future pace of growth and thus the turnaround in cash flows is still low, and we find the share's risk/reward ratio unsatisfactory for the time being.