NYAB Q3'25: Growing pains, future gains

NYAB Q3 revenue was in line with our estimate, but EBIT fell short due to a greater impact from H1’25 capacity build-up. Market conditions in Sweden remained favorable, while the demand picture in Finland stayed muted in the quarter, but shows an improving outlook. Q3 order intake was soft, which we believe, coupled with the slowing growth in the order backlog, points to moderating growth levels over the coming quarters. As our revenue estimates already reflect this, we keep them largely intact. However, we have trimmed our near-term margin assumptions, as we now expect utilization of the expanded workforce to normalize more gradually than we previously assumed. Based on our updated estimates, we view the post-earnings share price decline as a compelling entry point, and we see attractive risk-adjusted upside in the share, driven by estimated earnings growth for the coming years and higher motivated valuation multiples. We increase our recommendation to Buy (was Accumulate) while lowering our target price to SEK 7.90 (was SEK 8.25) on updated estimates.

Revenue in line, EBIT below estimates

NYAB builds upon its strong execution this year, with revenue increasing by 60% (y/y) in Q3 to 150 MEUR, in line with our estimate. Reported growth was driven by the Dovre consolidation but also, to a large extent, organically through the realization of the company’s strong order backlog (Q3’25: 404 MEUR, +6% y/y). While revenue growth from the Civil Engineering segment matched our expectation (31% y/y, Inderes est: 30%), growth in Finland was below our estimate due to timing effects in the project portfolio, while Sweden outperformed. Consulting revenue was flat (1% vs. est: -1%) year-on-year on a pro forma basis, as the demand picture across segments remains quite mixed. EBIT came in at 11.3 MEUR (Q3’24: 8.9 MEUR), corresponding to a 7.5% margin (9.5%), which was below our estimates in absolute figures (12.6 MEUR) and on margins (8.4%). In addition to the dilutive effect of the Dovre consolidation, we note that the company’s front-loaded investment in staff capacity in H1’25 had a greater impact on the margins than we had anticipated. 

We keep our revenue estimates, but trim margins slightly

Following the Q3 report, we keep our revenue estimates largely unchanged, as we believe the softer order intake and lower book-to-bill ratio in the quarter confirm the growth moderation we had already incorporated into our forecasts. The near-term slowdown reflects, what we believe, normalization from exceptionally strong levels rather than a shift in underlying demand. At the same time, we have made minor adjustments on a segment level, slightly lowering 2026 estimates for Consulting amid a softer Norwegian outlook, offset by higher assumptions for the Swedish Civil Engineering business, where activity remains robust. We have lowered our near-term EBIT margin estimates to reflect the prolonged impact of the front-loaded capacity expansion carried out during 2025, which continues to weigh on utilization and operating leverage. We view this margin pressure as a more timing-related issue rather than structural, with normalization expected as workforce utilization improves. Consequently, while our 2025-2027 margin assumptions are now slightly lower, our long-term EBIT margins remain unchanged.

We see strong upside in the share price

Based on our updated estimates, we believe the overall earnings-based valuation for the current year to be relatively neutral, albeit on the lower side on EV-based multiples (P/E: 16x, EV/EBIT: 11x). However, on our 2026e estimates, the earnings multiples falls to more attractive levels (P/E: 12x, EV/EBIT: 9x), especially on EV-based multiples, which account for NYAB’s strong balance sheet. Relative to our acceptable valuation ranges (P/E: 12x-16x, EV/EBIT: 11x-15x) we therefore see strong upside potential in the share. In addition, the expected total return over the medium term is also well above our required return for the stock. Further support for our view comes from our sum-of-the-parts as well as DCF model, which now stands at SEK 6.6-8.0 (was SEK 7.2-8.8) and SEK 8.06 (was SEK 8.24), respectively.