HEM: Lower Housing Volumes Will Likely Pressure Future Earnings And Share Price

We lower our Hemnet Group fair value estimate to SEK 121 from SEK 227, reflecting analysts' reduced price targets and more cautious assumptions on revenue growth, profit margins, and valuation multiples.

Analyst Commentary

Recent Street research reflects a clear moderation in sentiment toward Hemnet Group, with successive price target cuts pointing to increased skepticism about the sustainability of prior growth and valuation assumptions.

Bearish analysts have trimmed their targets multiple times in a short period, signaling that earlier expectations for top line expansion and margin resilience may have been too optimistic in the current macro and housing market backdrop.

The Neutral ratings maintained alongside these lower targets suggest that, while the long term business model is not being fundamentally questioned, the scope for near term upside is viewed as constrained relative to execution and market risks.

Bearish Takeaways

• Sequential price target reductions, including two cuts from JPMorgan within weeks, indicate that consensus sees a lower fair value range for the shares and less room for multiple expansion.
• Cautious stances, paired with Neutral ratings, imply that valuation is now more tightly balanced against risks around housing transaction volumes, product uptake, and pricing power.
• Bearish analysts are embedding more conservative growth trajectories and profitability assumptions, highlighting concerns that Hemnet may struggle to fully offset cyclical headwinds through upselling and new services.
• The clustering of downward revisions raises the risk that further disappointments in execution or market trends could drive additional estimate cuts and constrain share price performance.

What's in the News

• Completed share buyback program announced May 6, 2025, with a total of 812,500 shares repurchased, representing 0.85% of shares outstanding, for an aggregate SEK 223.2 million (company disclosure)
• Between July 1, 2025 and September 30, 2025, Hemnet repurchased 560,000 shares, equal to 0.59% of shares outstanding, for SEK 148.6 million, finalizing the current tranche of the buyback program (company disclosure)

Valuation Changes

• Fair Value Estimate has fallen significantly, reduced from SEK 227 to SEK 121, implying a substantially lower assessed intrinsic value for Hemnet Group shares.
• Discount Rate has risen slightly, moving from 6.10% to about 6.31%, modestly increasing the required return applied in the valuation model.
• Revenue Growth Assumption has been cut meaningfully, lowered from roughly 18.0% to about 11.3%, reflecting a more cautious outlook on top line expansion.
• Net Profit Margin Expectation has declined, adjusted from about 39.7% to around 34.0%, indicating reduced confidence in future profitability levels.
• Future P/E Multiple has been lowered, brought down from approximately 24.5x to about 18.3x, signaling a more conservative stance on how the market will value Hemnet's earnings.