HLSE:SOLTEQ

Stock Analysis Report

Executive Summary

Solteq Oyj, an IT service and software company, provides digital business solutions in Finland, Sweden, Denmark, Poland, and the United Kingdom.

Rewards

Trading at 38.7% below its fair value

Revenue is forecast to grow 2.21% per year

Earnings grew by 687.4% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -15.4% per year for the next 3 years

Interest payments are not well covered by earnings

Unstable dividend track record

Highly volatile share price over past 3 months

+ 1 more risk


Snowflake Analysis

Undervalued with proven track record.

Share Price & News

How has Solteq Oyj's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOLTEQ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.7%

SOLTEQ

3.1%

FI Software

5.4%

FI Market


1 Year Return

-29.8%

SOLTEQ

6.3%

FI Software

-19.3%

FI Market

Return vs Industry: SOLTEQ underperformed the Finnish Software industry which returned 6.3% over the past year.

Return vs Market: SOLTEQ underperformed the Finnish Market which returned -19.3% over the past year.


Shareholder returns

SOLTEQIndustryMarket
7 Day-3.7%3.1%5.4%
30 Day-19.2%-23.1%-21.3%
90 Day-29.5%-20.4%-23.2%
1 Year-29.8%-29.8%7.1%6.3%-15.4%-19.3%
3 Year-36.0%-36.0%-16.2%-19.1%-3.9%-15.9%
5 Year-40.2%-42.0%-33.0%-37.0%4.7%-15.4%

Price Volatility Vs. Market

How volatile is Solteq Oyj's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Solteq Oyj undervalued compared to its fair value and its price relative to the market?

38.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SOLTEQ (€1.05) is trading below our estimate of fair value (€1.71)

Significantly Below Fair Value: SOLTEQ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SOLTEQ is good value based on its PE Ratio (7x) compared to the Software industry average (45x).

PE vs Market: SOLTEQ is good value based on its PE Ratio (7x) compared to the Finnish market (15x).


Price to Earnings Growth Ratio

PEG Ratio: SOLTEQ's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SOLTEQ is good value based on its PB Ratio (0.8x) compared to the FI Software industry average (5x).


Next Steps

Future Growth

How is Solteq Oyj forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOLTEQ's earnings are forecast to decline over the next 3 years (-15.4% per year).

Earnings vs Market: SOLTEQ's earnings are forecast to decline over the next 3 years (-15.4% per year).

High Growth Earnings: SOLTEQ's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SOLTEQ's revenue (2.2% per year) is forecast to grow faster than the Finnish market (0.4% per year).

High Growth Revenue: SOLTEQ's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SOLTEQ's Return on Equity is forecast to be low in 3 years time (7.8%).


Next Steps

Past Performance

How has Solteq Oyj performed over the past 5 years?

-25.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOLTEQ has high quality earnings.

Growing Profit Margin: SOLTEQ's current net profit margins (4.8%) are higher than last year (0.6%).


Past Earnings Growth Analysis

Earnings Trend: SOLTEQ's earnings have declined by -25.7% per year over the past 5 years.

Accelerating Growth: SOLTEQ's earnings growth over the past year (687.4%) exceeds its 5-year average (-25.7% per year).

Earnings vs Industry: SOLTEQ earnings growth over the past year (687.4%) exceeded the Software industry 90%.


Return on Equity

High ROE: SOLTEQ's Return on Equity (11.4%) is considered low.


Next Steps

Financial Health

How is Solteq Oyj's financial position?


Financial Position Analysis

Short Term Liabilities: SOLTEQ's short term assets (€19.4M) do not cover its short term liabilities (€45.5M).

Long Term Liabilities: SOLTEQ's short term assets (€19.4M) exceed its long term liabilities (€6.9M).


Debt to Equity History and Analysis

Debt Level: SOLTEQ's debt to equity ratio (112.8%) is considered high.

Reducing Debt: SOLTEQ's debt to equity ratio has increased from 24.9% to 112.8% over the past 5 years.

Debt Coverage: SOLTEQ's debt is not well covered by operating cash flow (14.9%).

Interest Coverage: SOLTEQ's interest payments on its debt are not well covered by EBIT (1.5x coverage).


Balance Sheet

Inventory Level: SOLTEQ has a low level of unsold assets or inventory.

Debt Coverage by Assets: SOLTEQ's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Solteq Oyj's current dividend yield, its reliability and sustainability?

4.76%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SOLTEQ's dividend (4.76%) is higher than the bottom 25% of dividend payers in the Finnish market (3.2%).

High Dividend: SOLTEQ's dividend (4.76%) is low compared to the top 25% of dividend payers in the Finnish market (6.48%).


Stability and Growth of Payments

Stable Dividend: SOLTEQ's dividend payments have been volatile in the past 10 years.

Growing Dividend: SOLTEQ's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.3%), SOLTEQ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SOLTEQ's dividends in 3 years are forecast to be well covered by earnings (45.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Olli Väätäinen (53yo)

2.92s

Tenure

€287,000

Compensation

Mr. Olli Väätäinen previously served as Chief Operating Officer of Kotipizza Oyj. Mr. Väätäinen has been Chief Executive Officer of Solteq Oyj since April 1, 2017. He served as the Chief Operating Officer  ...


CEO Compensation Analysis

Compensation vs Market: Olli's total compensation ($USD318.22K) is about average for companies of similar size in the Finnish market ($USD341.12K).

Compensation vs Earnings: Olli's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Olli Väätäinen
Chief Executive Officer2.92yrs€287.00k2.07% 420.0k
Kari Lehtosalo
Chief Financial Officer0.50yrno datano data
Mikko Sairanen
General Counsel5.5yrsno datano data
Juha Rokkanen
Executive Vice President of Digital Servicesno datano datano data
Kirsi Jalasaho
Vice President of People & Culture2.92yrsno datano data
Timo Viitanen
Head of Customer Specifi C Solutions Business Unit & Senior Advisorno datano datano data
Urpo Karjalainen
Head of Retail and Wholesale Business Unitno datano datano data
Ilkka Brander
Executive Vice President of Software3.33yrsno datano data
Matti Djateu
Chief Digital Officer2.75yrsno datano data
Nina Danilotschkin
Senior Consultant11.58yrsno datano data

2.9yrs

Average Tenure

45yo

Average Age

Experienced Management: SOLTEQ's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Aarne Aktan
Independent Director4.42yrs€23.00kno data
Mika Uotila
Independent Director4.42yrs€24.00kno data
Markku Pietilä
Independent Chairman of the Boardno data€42.00kno data
Panu Porkka
Independent Director1.17yrsno datano data
Lotta Kopra
Independent Director1.42yrsno datano data
Katarina Segerståhl
Independent Director1.17yrsno datano data

1.4yrs

Average Tenure

44yo

Average Age

Experienced Board: SOLTEQ's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Solteq Oyj's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Solteq Oyj
  • Ticker: SOLTEQ
  • Exchange: HLSE
  • Founded: 1982
  • Industry: Application Software
  • Sector: Software
  • Market Cap: €20.272m
  • Shares outstanding: 19.31m
  • Website: https://www.solteq.com

Number of Employees


Location

  • Solteq Oyj
  • Karhumäentie 3
  • 5th Floor
  • Vantaa
  • 1530
  • Finland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SOLTEQHLSE (OMX Nordic Exchange Helsinki)YesOrdinary SharesFIEURSep 1999
0G5HLSE (London Stock Exchange)YesOrdinary SharesGBEURSep 1999

Biography

Solteq Oyj, an IT service and software company, provides digital business solutions in Finland, Sweden, Denmark, Poland, and the United Kingdom. The company offers Deep Vision, a service for identifying issues in online services and analyzing service use; and Solteq Smart Retail, a cloud-based suite that enables end-to-end retail digitalization strategy by integrating various business critical systems into a manageable solution. Its services include various aspects of customers’ operations ranging from digital business development consulting and service design to implementation and maintenance. In addition, the company provides inventory replenishment and analytics services. The company serves customers in retail, wholesale trade, logistics, hospitality, manufacturing, and energy sectors. The company was formerly known as Tampereen Tiedonhallinta. Solteq Oyj was founded in 1982 and is headquartered in Vantaa, Finland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 20:53
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.