Last Update 09 Dec 25

Fair value Decreased 4.27%

HEM: Margin Expansion And Buybacks Will Support Medium Term Cash Flow Stability

Hemnet Group's updated narrative fair value has been revised lower to approximately SEK 282 from SEK 294, as analysts trim price targets across the sector, citing slightly softer revenue growth expectations despite improving profit margins and a modestly lower forward P E multiple.

Analyst Commentary

Recent Street revisions for Hemnet Group have been characterized by a series of lower price targets, signaling a more cautious stance on near term upside even as the company continues to execute on profitability improvements.

Bullish Takeaways

Bullish analysts acknowledge that, despite reduced price targets, Hemnet still commands a premium valuation in the sector, reflecting confidence in its dominant market position and scalable digital platform.
The maintenance of Neutral and Equal Weight style ratings alongside target cuts indicates that, while upside is seen as more limited, downside is also viewed as relatively contained given strong margins and cash generation.
Some forecasts imply that modest revenue growth can still support attractive long term returns if Hemnet sustains margin expansion and disciplined cost control.
Updated targets continue to sit comfortably above current trading levels, suggesting that analysts still see execution on growth initiatives and pricing as capable of driving gradual re rating over time.

Bearish Takeaways

Bearish analysts are trimming valuation multiples to reflect softer top line expectations and a more challenging macro backdrop for housing transactions, which could cap near term growth.
The sequence of target reductions from houses such as JPMorgan underscores concern that consensus may have been too optimistic on volume recovery and upsell momentum.
Lower forward price targets highlight the risk that even small delivery misses on growth or user metrics could pressure a still elevated earnings multiple.
There is increasing focus on execution risk around new products and pricing initiatives, with analysts cautious that competitive responses or weaker demand could slow the path to re acceleration in revenue.

What's in the News

Completed share buyback program with a total of 812,500 shares repurchased, equivalent to 0.85% of shares outstanding, under the mandate announced on May 6, 2025 (company disclosure).
Repurchased 560,000 shares between July 1 and September 30, 2025, representing 0.59% of share capital, for a total consideration of SEK 148.6 million (company disclosure).
Aggregate capital deployed on the current buyback reached SEK 223.2 million, which signals continued commitment to shareholder returns amid a softer growth outlook (company disclosure).
The reduced free float and share count from the completed buyback are expected to provide a modest lift to earnings per share and to support valuation resilience (analysis of company disclosure).

Valuation Changes

Fair value narrative estimate reduced from approximately SEK 294.4 to SEK 281.8, a modest downward revision of around 4 percent.
Discount rate adjusted marginally lower from about 6.32 percent to 6.31 percent, implying a slightly less conservative risk assumption.
Revenue growth trimmed from roughly 18.42 percent to 17.73 percent, indicating a small moderation in top line expectations.
Net profit margin raised slightly from around 42.49 percent to 43.04 percent, reflecting an improved profitability outlook.
Future P/E reduced from about 29.58x to 28.44x, signaling a modest compression in the forward valuation multiple.

Expanding digital adoption and strong platform enhancements are boosting user engagement, revenue per listing, and maintaining Hemnet's pricing power and market leadership in Sweden.
Dominant brand presence and network effects ensure resilience against competitors, supporting sustained high margins and efficient customer acquisition.
Prolonged property market weakness, increased competition, and over-reliance on core listings expose Hemnet to risks of stagnating growth, margin pressure, and heightened earnings volatility.

Catalysts

About Hemnet Group

Operates a residential property platform in Sweden.What are the underlying business or industry changes driving this perspective?

Accelerating adoption of digital real estate solutions and ongoing consumer shift to online property search and transaction platforms continue expanding Hemnet's user base and traffic, supporting higher long-term revenue and market leadership in Sweden.
Increased preference for self-service and remote property transactions is driving sustained demand for premium and value-added listing packages (like Hemnet Max), materially boosting average revenue per listing (ARPL) and contributing directly to topline growth and margin expansion.
Strong platform enhancements-such as personalized feeds, better analytics, and feature-rich listing packages-are increasing user engagement and improving product differentiation, positioning Hemnet to maintain pricing power and drive higher ARPU, which is margin accretive.
Hemnet's dominant brand and network effects, evidenced by a stable 89%+ market share of Swedish property listings and high user preference in surveys, provide resilience against new entrants and support sustained high net margins and efficient customer acquisition over time.
Continued secular increase in digital and performance marketing spend within real estate, together with Hemnet's scale and targeted audience, positions the company to capture higher advertising revenues from real estate professionals and developers as the cycle recovers, which is likely to lift future earnings.

Hemnet Group Earnings and Revenue Growth

Hemnet Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Hemnet Group's revenue will grow by 19.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 35.4% today to 40.8% in 3 years time.
Analysts expect earnings to reach SEK 1.1 billion (and earnings per share of SEK 10.49) by about September 2028, up from SEK 548.2 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 36.5x on those 2028 earnings, down from 44.9x today. This future PE is lower than the current PE for the SE Interactive Media and Services industry at 48.7x.
Analysts expect the number of shares outstanding to decline by 0.84% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.08%, as per the Simply Wall St company report.

Hemnet Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged softness in the Swedish property market, marked by falling listing volumes (-9.3% in Q2, with May and June down up to 16%) and extended average listing times (now 48 days vs. 42 a year ago), may signal a structural slowdown in housing turnover; this could dampen transaction-linked revenues and hinder ARPL growth.
Growing inventory and record-long sales cycles are causing market-wide friction and agent fatigue; if high supply persists without destocking through significantly increased transactions, it may impair seller urgency and confidence, pressuring Hemnet's core business and risking stagnation in revenue and earnings.
Heightened competitive dynamics around the "pre-market" segment, where rival platforms like Booli claim stronger positions and higher listing inventories/new listings, could threaten Hemnet's dominant market share and erode its network effects, with negative consequences for monetization and margins.
Macro uncertainty (e.g., interest rate volatility, prospective regulatory changes, or demographic headwinds) remains a significant risk-the company's high geographic concentration in Sweden means it is vulnerable to cyclical downturns or structural shifts reducing long-term demand, thereby impacting top-line growth and profitability.
Flat or declining revenues in B2B segments (e.g., a 10% fall in advertising revenues for Q2 and mixed trends overall) underscore the challenge of diversifying away from core property listings; this over-reliance heightens sensitivity to cyclical shocks and could result in margin compression or earnings volatility if core growth falters.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of SEK334.983 for Hemnet Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK426.0, and the most bearish reporting a price target of just SEK227.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be SEK2.6 billion, earnings will come to SEK1.1 billion, and it would be trading on a PE ratio of 36.5x, assuming you use a discount rate of 6.1%.
Given the current share price of SEK246.8, the analyst price target of SEK334.98 is 26.3% 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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Digital Real Estate Outlook Will Shift Amid Lowered Expectations in Swedish Market