Hemnet Group (OM:HEM) Valuation Review Following Q3 Results and Share Buyback Completion

Hemnet Group (OM:HEM) just released its third quarter and nine-month results. Quarterly sales and net income dipped compared to last year, but nine-month numbers showed improvement. The company also wrapped up its latest share buyback tranche.

See our latest analysis for Hemnet Group.

Hemnet Group’s share price has lost momentum in recent months, with a 30-day share price return of -7% and a sharp 90-day drop of -26.2%. This reflects shifting sentiment after the buyback completion and a recent earnings dip. Despite the tough year-to-date share price return of -41.5%, the three-year total shareholder return still stands at an impressive 50%. This shows that long-term investors have done well even as short-term challenges persist.

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With the share price now well below analysts' targets and solid growth in revenue and profits over nine months, the key question becomes whether Hemnet Group is an undervalued opportunity or if future gains are already reflected in the price.

Most Popular Narrative: 31.6% Undervalued

With Hemnet Group’s most widely followed narrative fair value estimate at SEK303.15, shares closing at SEK207.4 seem to be trading at a significant discount. This sets the stage for some bold assumptions driving the upside narrative.

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.

Read the complete narrative.

Want to know the math behind this explosive upside? The key to this story is a triple threat: double-digit revenue growth, ambitious margin gains, and a future profit multiple normally reserved for industry titans. Which bold projections power this 30% discount? You’ll have to dig deeper to see how these big numbers connect and whether they pass your own gut check.

Result: Fair Value of $303.15 (UNDERVALUED)

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

However, persistent weakness in Sweden’s property market and mounting competition could quickly challenge Hemnet Group’s growth assumptions and put pressure on its leading position.

Find out about the key risks to this Hemnet Group narrative.

Another View: Price Multiples Raise Caution

Looking at Hemnet Group’s valuation through its price-to-earnings ratio, there is a different story. The company trades at 36.3 times earnings. This is more expensive than the global industry average of 22.6 times and is also above its fair ratio of 26.1 times. While it is cheaper than its closest peers, the high multiple may limit near-term upside and exposes investors to more risk if market sentiment shifts. Is the recent sell-off enough to close this gap, or could more downside be ahead?

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

Build Your Own Hemnet Group Narrative

Consider taking the data into your own hands and building the story that makes sense to you. Craft your own narrative about Hemnet Group in just a few minutes with Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Hemnet Group.

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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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