Addtech (OM:ADDT B) Valuation in Focus Following Strong Sales and Earnings Growth

Addtech AB (publ.) (OM:ADDT B) just released its latest earnings, providing investors with a closer look at how the business is progressing. The company reported higher sales and net income for both the second quarter and first half of the fiscal year.

See our latest analysis for Addtech AB (publ.).

Building on this momentum, Addtech AB (publ.) has seen its share price climb nearly 6% over the past month and deliver a solid 8% total return over the past year. The share price’s positive move suggests investors are taking note of the company’s improving earnings, especially following the latest set of robust results.

If Addtech’s steady growth has you curious about what else is out there, it could be the perfect moment to discover fast growing stocks with high insider ownership.

With these consistent results and the stock trading around 14% below analysts’ price targets, the question remains: is Addtech still undervalued, or is the market already pricing in all of the company’s future growth?

Most Popular Narrative: 12.3% Undervalued

With the consensus fair value estimate at SEK 367, Addtech AB (publ.) currently trades below this mark. This hints at a potential upside for investors who trust the narrative’s projections.

The strong financial position and international expansion strategy, including an increasing presence outside the Nordics, suggest the potential for sustained revenue growth. The company's strategic diversification aims to mitigate regional economic risks. Addtech's focus on energy, particularly in infrastructure products for electrical transmission and power distribution, also positions it well for revenue growth as demand in these areas remains strong. This is supported by the transition to renewable energy sources.

Read the complete narrative.

Want to know the calculation behind this figure? The outlook relies on ambitious revenue and profit margin improvements, along with future multiples that rival high-growth sectors. Which assumptions give the narrative such conviction? Dive into the full narrative to uncover what could drive the next big move.

Result: Fair Value of $367 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, solid expansion faces challenges, as higher costs or slowing order growth in key segments could weigh on profits and disrupt positive projections.

Find out about the key risks to this Addtech AB (publ.) narrative.

Another View: Stretch in the Multiples?

Looking at value from another angle, Addtech AB (publ.) is currently trading at a price-to-earnings ratio of 43.4x. This is much higher than both its peer average of 36.4x and the European industry average of just 16.8x, and it also stands well above the fair ratio of 25.5x suggested by market trends. This gap highlights extra optimism in the share and may signal valuation risk if growth slows or expectations falter. Does the premium reflect long-term growth, or could expectations be running ahead of reality?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Addtech AB (publ.) Narrative

If you want a fresh perspective or trust your own research more, you can quickly build your own narrative and dig into the numbers yourself, all in under three minutes with our tools. Do it your way.

A great starting point for your Addtech AB (publ.) research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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