Translation: Original published in Finnish on 11/12/2026 at 8:00 am EET.

We are raising Modulight's forecasts for the coming years based on the new quantum computing order received by the company. Large for Modulight's scale, the order is the second one this fall. Thanks to the high gross margin, additional sales quickly show in the operating profit, and the earnings turnaround is brought forward to 2028 in our forecasts. We raise our target price to EUR 1.30 (was EUR 1.15) and reiterate our Accumulate recommendation on the back of positive developments.

New client in quantum computing

Modulight announced on November 4 that it had received an order of 1.1 MUSD (~1.0 MEUR) from an American quantum computing company, which is a new customer for the company. The order covers a few qualification units for the customer's quantum computing systems. For a company of this scale, the order is significant, as it corresponds to ~14% of our revenue forecast for the current year. This is already the second quantum technology order, as Modulight received a prototype order of ~0.8 MEUR in early 2025. The new quantum computing customer could place additional orders before the summer of 2027 if the qualification is successful and the project progresses. Qualifying new technology always carries risks, but success could pave the way for recurring production sales in the future. The order continues the positive picture created by September's 1.5 MUSD neuroscience pilot production order and the strong Q3 order intake.

Estimates are rising and the earnings turnaround is coming sooner

We raised our revenue forecast for the current year by 3% to 7.4 MEUR, as we estimate a small portion of the order to be recognized as revenue already in Q4. We expect the majority of the order to be recognized as revenue next year, and our 2027 revenue forecast increased by 9% to 10.6 MEUR, which represents an annual growth of ~43%. We raised our 2028 revenue forecast by 7% to 13.3 MEUR, reflecting an increased probability of additional orders. Due to the high gross margin, additional sales largely flow directly to the bottom line. We forecast EBIT for 2027 to be -2.5 MEUR (was -3.0 MEUR) and EBIT for 2028 to rise to breakeven (was -0.5 MEUR). The earnings turnaround in our forecasts is thus brought forward by approximately one year. The improved earnings outlook also strengthens the adequacy of the cash reserves and further reduces financial risk. However, visibility into growth remains limited, and the timing of individual orders can cause strong fluctuations in the figures.

Still upside left

Due to the loss-making nature of the business, we rely on the EV/S multiple and the DCF calculation in our valuation. Following the estimate changes, the EV/S multiples have declined to ~5.6x and 4.0x for 2026–2027. Multiples require a continuation of the positive trend, which we believe is well-supported given the low revenue base and the backing of new orders. Our DCF calculation gives the share a value of EUR 1.3, and based on the scenarios, the value ranges between EUR 0.4 and EUR 2.6. Risks remain high, as forecast uncertainty is significant and the financial risk remains elevated despite the positive development. On the other hand, commercial breakthroughs can rapidly lift the growth outlook and acceptable valuation multiples. Overall, we find the risk/reward ratio to still be attractive.