We reiterate our Accumulate recommendation for Canatu but lower our target price to EUR 9.0 (was EUR 10.0). The company's loss for the end of the year was slightly smaller than we expected, but our forecasts have decreased based on the 2026 outlook comments. Following last year's weak performance, the company's growth story has taken a clear hit, which is also reflected in the share price. Nevertheless, the market for Canatu's CNT-based pellicles is still emerging, and the company's position in it appears strong. Canatu's long-term potential is still attractive, but investors' patience is being tested.

H2 loss slightly lower than expected

Canatu's H2 figures were, as expected, weak without new reactor orders. Revenue decreased by 24% to 8.3 MEUR and EBITDA deteriorated to -4.4 MEUR. Despite the losses, Canatu has strong financial capacity to make investments, as its net cash position at the end of the year was 90 MEUR.

Uncertainty over short-term growth continues

Canatu did not provide numerical guidance for the 2026 financial year, as the outcome and timing of ongoing customer negotiations significantly impact the company's short-term revenue development. In addition, the schedule for the second reactor customer's acceptance (SAT) depends on the customer's processes. However, the company provided a list of key operational targets for this year. The most important of these are to sell at least one new reactor to the semiconductor sector and to finalize customer approvals for the second reactor customer during this year. Regarding new reactor orders, the company announced on its earnings day a follow-up order for long lead-time components from its current reactor customer (our assumption is FST). This does not yet mean an actual new reactor order, but in our view, it practically indicates that it will happen in the future. Canatu also expects recurring revenue this year from royalties and non-discretionary consumables from the first reactor delivered to FST. The magnitude of this is still unclear and depends on the start date and volume of mass production.

Our estimates decreased following the report

In our view, some investors were spooked on the earnings day by the company's announcement to abandon its long-term financial targets. Pushing the targets further into the future was already clear based on the H1 report, and the company will issue new targets at the CMD on March 26. The delays in customer projects mentioned in this release primarily refer to events that already occurred during 2025, and we do not believe any new surprises have occurred this year. Based on Canatu's outlook comments, we lowered our assumption for new reactor orders this year to one (from 2). We also lowered our expectations for the coming years and now forecast the company to achieve over 100 MEUR in revenue in 2030 (prev. 2029).

Long-term potential has not disappeared

Last year's weakened revenue and falling short of growth targets have dented Canatu's growth story, which has also been reflected in the sharply declined share price and forecasts. Despite the share price decline, Canatu’s valuation (2026e EV/S 8.8x-9.5x) has priced in expectations of strong scalable growth, for which we believe the still credible long-term growth story provides grounds. The company's reactor business is still progressing in the right direction, which creates a basis for strong earnings growth in the coming years. Should this materialize, the share’s valuation (2029e EV/S ~2x and EV/EBIT 8-9x) would become attractive. Through scenarios modeling growth and profitability at different rates, we have estimated a wide value range of some EUR 5-15 for Canatu, which partly reflects the risks and opportunities associated with the company.