Elekta (OM:EKTA B): Assessing Valuation as Profits Climb Despite Lower Sales in Latest Results

Elekta (OM:EKTA B) just released its latest earnings for the second quarter and first half of 2025. While sales dipped compared to last year, investors are paying attention to the company's higher profit and earnings per share.

See our latest analysis for Elekta.

While Elekta’s recent earnings reveal profits are up even as sales slip, the market remains cautious, as seen in a challenging year-to-date share price return of -27.93%. Over the past year, total shareholder return sits at -26.04%, indicating that investor sentiment has yet to turn decisively despite the improved bottom line.

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With shares down significantly yet profits on the rise, the key question is whether Elekta’s improved earnings have set the stage for a rebound, or if market expectations already reflect the company’s future growth potential.

Most Popular Narrative: 17.2% Undervalued

According to the most popular narrative, Elekta's fair value stands well above its last closing price. This sets up a tension between consensus analyst targets and current market sentiment.

Continued strong momentum and successful launches of Elekta Evo and Elekta ONE software in Europe are driving double-digit sales growth and gross margin improvement in the region. This suggests that further global rollouts of these advanced solutions, aligned with increasing demand for precision radiotherapy, may accelerate overall revenue and margin expansion as adoption broadens.

Read the complete narrative.

What’s really powering that bullish fair value? A deeper look reveals surging recurring service revenue, rising software adoption, and bold multi-year profit margin forecasts, as well as harder-to-spot assumptions that could make all the difference. Want to know which numbers underpin this optimistic outlook?

Result: Fair Value of $53.79 (UNDERVALUED)

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

However, ongoing tariff and currency headwinds, as well as delayed revenue recognition in key regions, could quickly challenge these optimistic projections.

Find out about the key risks to this Elekta narrative.

Another View: Profit Multiple Raises Red Flag

While fair value models suggest Elekta’s shares are undervalued, another approach tells a different story. Elekta’s current price-to-earnings ratio stands at 62.1x, which is much higher than both the industry average (27.9x) and its fair ratio of 38.6x. This premium means investors are paying far more for each unit of profit than the broader market would expect. The question is whether the market truly believes Elekta can grow into this high valuation, or if optimism is running ahead of reality.

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

Build Your Own Elekta Narrative

If you see things differently, or want to dive into the numbers yourself, you can easily craft your own story in just a few minutes: Do it your way

A great starting point for your Elekta research is our analysis highlighting 2 key rewards and 4 important warning signs 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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