Rising Hearing Health Awareness And Digital Connectivity Will Drive Expansion

Key Takeaways

• Innovations and contract wins in the Hearing division, along with demographic trends, are driving higher revenue growth and sustained market share gains.
  
• Strategic supply chain diversification and digital leadership position the company to capture margin improvements, recurring revenues, and resilient long-term profitability.
  
• Exposure to trade tensions, weak growth, intensifying competition, high debt, and reliance on cost cuts threaten profitability, differentiation, and long-term financial stability.

Catalysts

Provides hearing, audio, video, and gaming solutions in Denmark, rest of Europe, North America, and internationally.

• While analyst consensus expects margin expansion from synergy realization and operational efficiency, the accelerated global supply chain diversification and robust price increases across Enterprise and Gaming could lead to a faster-than-expected rebound in margins and EBITA, as most tariff impacts will be fully mitigated by early 2026.
  
• Analysts broadly agree that innovations like ReSound Vivia and VA contract wins will fuel Hearing division growth, but early indicators-such as Vivia outpacing prior launches with over 20 percent new customer order growth and 30 percent higher repeat orders-suggest the division could see sustained double-digit revenue growth and share gains as global launch scales throughout 2025.
  
• GN Store Nord is exceptionally well positioned to benefit from an aging population and growing awareness of hearing health, both of which are driving earlier adoption and higher penetration rates, pointing to multi-year volume expansion and a structurally higher revenue base for the Hearing division.
  
• The shift toward digital, hybrid work and connected lifestyles is only accelerating, and GN's leadership in B2B collaboration, premium headsets, and integrated audio-video solutions sets up the Enterprise and Audio businesses to capture both a higher share of recurring revenues and improved net margins as technology upgrades and device replacement cycles accelerate.
  
• GN's swift adaptation to volatile global trade, by securing manufacturing flexibility and agile capacity across Malaysia, Vietnam, and Europe, not only reduces risk and preserves profitability but could make the company a preferred partner for rapid new product introductions, supporting outperformance in free cash flow, ROIC, and sustainable earnings growth.

GN Store Nord Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on GN Store Nord compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming GN Store Nord's revenue will grow by 7.1% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 4.6% today to 10.8% in 3 years time.
• The bullish analysts expect earnings to reach DKK 2.3 billion (and earnings per share of DKK 14.02) by about July 2028, up from DKK 805.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 18.5x on those 2028 earnings, which is the same as it is today today. This future PE is greater than the current PE for the GB Consumer Durables industry at 17.7x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.16%, as per the Simply Wall St company report.

GN Store Nord Future Earnings Per Share Growth

Risks

• High exposure to ongoing global trade tensions and tariffs, especially U.S.-China, is resulting in significant near-term revenue headwinds and transition costs from the accelerated supply chain diversification, with uncertainty around pace and effectiveness of mitigation-potentially putting structural pressure on both margins and net earnings.
  
• The company is experiencing stagnant or declining organic revenue growth in key divisions: -3% at group level in Q1, with Enterprise and Hearing both showing negative growth, which raises concerns about GN Store Nord's ability to return to sustained top-line expansion against a backdrop of weak international markets and challenging sector dynamics.
  
• Increasing adoption of consumer electronics and general-purpose audio devices is intensifying competitive pressures in hearing aids, particularly for mild-to-moderate hearing loss, eroding brand differentiation and pricing power for GN Store Nord and leading to potential long-term revenue and gross margin contraction.
  
• Elevated debt and leverage levels (4.1x adjusted leverage as of end Q1), arising from prior acquisitions, limit GN Store Nord's financial flexibility and increase vulnerability to rising interest expenses or economic downturns, raising risks for future net earnings and capital allocation.
  
• GN Store Nord's margin improvement plans rely on temporary cost containment and price increases, yet persistent industry cost inflation, possible volume declines from higher prices, and a structurally slower pace of innovation compared to peers could undermine long-term profitability and hinder the company's ability to reach its 16–17% EBITA margin target, negatively impacting earnings and investor confidence over time.

Valuation

• The assumed bullish price target for GN Store Nord is DKK236.88, which represents two standard deviations above the consensus price target of DKK140.47. This valuation is based on what can be assumed as the expectations of GN Store Nord's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of DKK270.0, and the most bearish reporting a price target of just DKK76.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be DKK21.7 billion, earnings will come to DKK2.3 billion, and it would be trading on a PE ratio of 18.5x, assuming you use a discount rate of 8.2%.
• Given the current share price of DKK102.1, the bullish analyst price target of DKK236.88 is 56.9% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.