Translation: Original published in Finnish on 7/2/2026 at 9:00 am EEST.

We raise our recommendation to Buy (from Accumulate) and reiterate our EUR 3.3 target price. Digital Workforce announced yesterday that it had acquired AI agent capabilities, which aligns well with the company's strategy. In addition, the valuation of the transaction is moderate even before potential synergies. With the acquisition, the company's offering to customers will also expand to cover areas of customer service. Overall, the acquisition strengthens the offering and thus the strategic position with customers. We expect the company to grow well organically in the coming years, with growth partially scaling into profitability. The stock's valuation (2026e EV/EBIT 11x, P/E 11x) has become very attractive again due to the acquisition and the share price decline. 

Acquisition well aligned with strategy focus

Strategically, the deal is well aligned with Digital Workforce's core operations, as the company has identified AI Agents as one of its key drivers for growth and continuous services. Front AI's business brings the company capabilities based on Boost.ai technology for customer service automation, covering both chat and voice technology. Eight employees and ~30 customer contracts will be transferred, focusing on the company's key areas: banking, insurance, and the public sector. We see clear cross-selling opportunities here, as Front AI's customer service bots can be combined with Digital Workforce's back-end automation expertise and the Outsmart platform. Customer service,might be perceived as less value-adding, but with the advancement of technology, it is currently one of the fastest-developing areas. In addition, it expands Digital Workforce's offering to its customers and thus, in our view, strengthens customer retention.

Expertise considered, valuation is attractive and reflects application potential

The acquired business's revenue grew by 12% to 2.9 MEUR in 2025, and its adjusted EBITDA improved to 0.59 MEUR (2024: 0.48 MEUR). The baseline purchase price is 3 MEUR. In addition, the seller is entitled to an earnout of a maximum of 0.6 MEUR based on 2027 profitability. Relative to 2025 figures, the basic purchase price corresponds to around 1.0x EV/S and 5x EV/EBITDA. Considering the acquired business's healthy EBITDA margin of ~20% and synergy potential, we view the valuation as favorable for Digital Workforce. With its strong balance sheet, the company has ample room to complete the transaction with cash.

Good organic performance in forecasts as well

The company maintained its guidance. Digital Workforce expects "comparable" revenue to grow by at least 15% in 2026 compared to 2025. In addition, the company expects adjusted EBITDA to be 7–13% of revenue. We added the transaction to our estimates starting from Q3'26. On an annual level, the acquisition increased revenue forecasts by ~10% and EBITDA by ~15%. We forecast revenue to grow by 31% (10% organically) to 32 MEUR and the adjusted EBITDA margin to be 9.4% in 2026. In the coming years, we "cautiously" expect growth to slow down slightly and partially scale into profitability.

Valuation picture is very attractive

In terms of investment profile, Digital Workforce is still partially a turnaround company whose turnaround in profitable growth progressed the year before last. There was a slight setback at the beginning of last year, but things picked up again toward the end of the year. Strong contract wins early in the year, the strong Q1 report, and an improved outlook bode well for the current year. Strategic positioning has also eliminated the disruption risk created by AI. With only partially scaled profitability estimates for 2026 (EBITDA: 9%) and a 13% share price decline, the valuation picture (2026e EV/EBIT 11x, P/E 11x) is very attractive. The corresponding 2027 multiples, which take into account the entire acquisition, are 8x and thus very attractive. Based on the valuation multiples, the sum of the parts (EUR 4.1), and the DCF calculation (EUR 3.6), we estimate the fair value range of the share to be EUR 3.1-4.1 per share. However, the upper end also requires continuous evidence of the organic continuation of the earnings turnaround.