Translation: Original published in Finnish on 06/11/2025 at 07:00 am EEST

Following the successful Terveystalo cooperation, Nightingale is now increasing its commercial sample volumes with its healthcare partners in Singapore and the US. The company's pilot phase customerships are also in general expected to progress, and we believe the company is actively negotiating new partnerships as well. However, we are now particularly looking for signs of strong growth in commercial sample volumes, which would substantially reduce estimate risks. We reiterate our EUR 2.9 target price but lower our recommendation to Reduce (previously Accumulate) with the share price increase.

The Nightingale test identifies people's risks of developing chronic diseases

Chronic diseases account for a significant proportion of health care costs, although a large proportion of these could be avoided through lifestyle changes. Nightingale aims to promote a solution to this problem with a test based on blood analysis. The company's technology measures 250 active biomarkers from a single blood sample and provides predictions of the sample provider’s risk of contracting several chronic diseases. For the time being, it is difficult to identify a credible competitor for the test. Its price point is very low (list price starting from EUR 34 per sample), and the continuously growing number of blood samples analyzed with it further increases its moat against possible future competitors. The company has significant potential in the market, but breaking into the conservative market will not happen quickly.

Business is growing, but its trajectory remains unclear

Nightingale aims to integrate its disease risk detection service with the value chains of existing healthcare providers. If successful, the company's revenue would grow strongly and profitability would become positive over time (target: positive EBITDA in the medium term). The company has taken clear steps in this direction: its technology is already widely used in occupational health at Terveystalo, andoffered as a diagnostics service through Pathology Asia in Singapore and with the support of Boston Heart in the US. The company also has several pilots and research projects preceding possible larger-scale use (Mass General Brigham, Kaiser Permanente, Weill Cornell Medicine, and Phenome Health), and we estimate that several sales discussions are underway. Given previous customer wins, we believe the company will announce at least one significant partnership this year.

Although a broad partner base already mitigates commercialization risks, the visibility of the company's growth remains blurred and highly dependent on successful partnering roll-out. We believe that our estimates rely on a realistic but very high-risk scenario of Nightingale’s business growth (revenue CAGR 42% in 2025-2034e). This requires successful ramp-up of existing customers and continuous new commercial contracts. Investors must therefore believe in the company's global commercial breakthrough, take a very long-term view of the stock, and accept the risk of capital loss.

We do not feel the current price offers sufficient compensation for the risk

Nightingale’s fundamental-based valuation is very challenging, as possible scenarios vary between destruction and multiplication of invested capital. With current data, our fair value estimate range for the share is wide, EUR 1.0-7.3 (previous EUR 0.8-7.1). In our view, the company's track record still supports a price closer to the bottom end of the range (target price EUR 2.9/share). Although there are positive drivers on the horizon for the year (new customer wins, signs of growth in the Pathology Asia and Boston Heart partnerships), we do not find the stock's risk/reward ratio sufficiently attractive within a year. On the other hand, we think that the company should be approached with at least a multi-year investment horizon.