Componenta Q425: Growth trajectory holds

Translation: Original published in Finnish on 3/9/2026 at 6:29 am EET.

Componenta's financial statement release published on Friday was better than we expected across the board, with all key figures exceeding our forecasts. Contrary to our expectations, the company did not distribute a dividend, which we consider a justified move given the growth outlook and the company's balance sheet position. The outlook for the 2026 financial year indicated growth in both revenue and EBIT, in line with our preliminary expectations. After the report, estimate changes were minor adjustments, but the risks associated with our strong growth expectations decreased. With this growth, the upside in valuation multiples makes the risk/reward ratio attractive, in our view. Thus, we raise our target price to EUR 5.0 (was EUR 4.7) and upgrade our recommendation to Accumulate (was Reduce).

Key lines exceeded our estimates

Componenta's Q4'25 revenue was 31.2 MEUR, exceeding our 28.8 MEUR estimate. Due to the revenue exceeding our forecast, the EBITDA of 2.8 MEUR also surpassed our estimate (2.5 MEUR). Depreciation, net financing expenses, and taxes, which included a significant one-off item, were in line with our expectations. As a result, Q4'25 EPS of EUR 0.67 exceeded our forecast of EUR 0.64, reflecting the operational earnings beat. Net debt seemingly decreased to a low level of 2.2 MEUR, but significant use of factoring financing will keep financing costs high in the future. We expected the company to resume dividend payments, but we believe it understandably decided not to pay dividends and to use the capital for growth and maintenance investments. Componenta's order book, which includes two months of binding orders, developed better than we expected, growing by 12% to 19.3 MEUR.

No major changes in estimates

In connection with its financial statements, Componenta issued guidance in which the company expects revenue and adjusted EBIT to improve from the previous year (2025 revenue was 115.7 MEUR and adjusted EBIT was 4.3 MEUR), which was in line with our preliminary expectations. We forecast Componenta's revenue to grow by 11% to 128 MEUR in fiscal year 2026. We believe there are growth drivers in several customer segments: The Agricultural Machinery segment already grew significantly in H2'25, even though the market remains sluggish. In the Machine Building segment, Componenta appears to be positioned in promising growth pockets, even though the overall market development is only cautiously positive. We expect demand from the Defense Industry to remain strong in the coming years due to geopolitical tensions. We estimate that Energy Industry will receive indirect support from the data center market boom, but we are not aware of Componenta's direct customers in this area. Forest Machine Industry is clearly the weakest-performing segment, but due to the segment's small size (6% of 2025 revenue), its impact on the group's figures is limited. Although the past financial year sets a relatively high bar for improving profitability, we expect growing volumes to improve production utilization rates and thus also relative profitability in the coming years. We did not make significant changes to our forecasts, but we believe the strong report alleviated forecast risks related to continued growth.

Valuation appropriately incorporates earnings growth expectations

After adjusting for our estimated factoring financing amount (~15 MEUR), the EV/EBITDA multiples for 2026 and 2027 are 6x and 5x, respectively, and the corresponding EV/EBIT multiples are 13x and 10x. P/E multiples that account for high financing costs are at 12x and 9x. The DCF model, taking into account factoring liabilities, yields a value of EUR 5. The expected return from earnings growth and dividends over a one-year horizon is roughly at the level of our required rate of return, but the continuation of a strong growth trajectory in the medium term and the possibility of further upside surprises, in our view, make the stock's risk/reward ratio attractive.