Metacon Q3'25: Searching for the next large-scale order

Metacon’s Q3 figures were below our expectations, mainly due to lower revenue recognition in the Motor Oil project than we had expected. However, we view this primarily as a timing effect and we believe that the company continues to progress in the right direction with significantly increased order intake, revenue and decreased operating loss. While we have taken a more cautious stance in our short- to mid-term estimates, given that the company has not yet secured a new large-scale order as we had anticipated, we still believe the current valuation offers an attractive risk/reward profile. As a result, we reiterate our Accumulate recommendation but lower our target price to SEK 0.60 (was SEK 0.70), reflecting the lower estimates.

Q3 figures below our expectations but growth trend remains intact

Metacon’s Q3 revenue came in at 40.9 MSEK, representing a strong year-on-year increase but landing below our expectations due to lower-than-anticipated revenue recognition from the large-scale Motor Oil project. Order intake amounted to 78 MSEK, driven by the 7.5 MW hydrogen project contract with Elektra. We estimate that the order backlog reached around 270 MSEK at the end of Q3’25, laying the foundation for continued revenue growth. Operating expenses were slightly lower than we expected, indicating continued good cost control. However, due to the weaker revenue figure, EBIT also fell short of our forecast. While the negative operating result continued weighing on cash flow, Metacon received a milestone payment of approximately 166 MSEK in Q3 from the Motor Oil project. As a result, operating cash flow after changes in working capital was solid at around 67 MSEK.

We have lowered our estimates reflecting longer lead times than anticipated earlier

We have lowered our short-term estimates due to partially lower-than-expected revenue recognition in Q3 and slightly longer lead times for the Motor Oil project, for which we now expect revenue to extend through Q2/Q3'26. Regarding order intake, we had previously anticipated that Metacon would secure another large-scale order this year, with most of the revenue expected to be recognized in 2026, given the generally long lead times. However, as we approach year-end and the company has not yet announced any new large-scale orders, we have taken a more cautious stance in our 2026 revenue estimates, though our long-term outlook remains largely unchanged. These lower revenue estimates have also resulted in a higher estimated operating loss for 2025-2026, but since Metacon's costs are largely variable and scale with revenue, the difference in absolute terms is not significant. We still estimate the company will achieve a positive operating result on a full-year basis in 2027, though the combination of relatively low gross margins and increased operating expenses from continued expansion is expected to weigh on profitability.

We reiterate our Accumulate recommendation

In our view, the fair value of Metacon’s share with current assumptions is around SEK 0.20-1.01 per share (prev. SEK 0.27-1.13 per share). This is slightly lower than our previous range, mainly due to lower estimates. In our view, with the significantly stronger order inflow that Metacon has shown during the past year, the company is better positioned to achieve broader commercialization. However, uncertainty remains about the company's ability to secure additional large orders on a consistent and profitable basis. Given these factors, we keep our target price roughly in the middle of our fair value range at SEK 0.60 per share (was SEK 0.70). The target price decrease is mainly related to lower estimates, which has brought the fair value range down slightly. As the expected return exceeds our required return, we reiterate our Accumulate recommendation.