Note (OM:NOTE) Stock Faces Margin Pressure As Q2 EPS Trails Prior Highs

NOTE (OM:NOTE) has just posted Q2 2026 results, with revenue at SEK 1,175 million and basic EPS of 1.96 SEK, giving investors fresh data on how the business is earning its way through the year. The company has seen quarterly revenue move from SEK 980 million in Q2 2025 to SEK 1,175 million in Q2 2026, while basic EPS over the same quarters went from 2.67 SEK to 1.96 SEK. This sets up a mixed picture on top line scale and per share profitability. For investors, attention now turns to whether NOTE can protect and rebuild margins from here as it balances higher revenue with more efficient earnings per share.

See our full analysis for NOTE.

With the headline numbers on the table, the next step is to see how these results line up against the main market narratives around NOTE and where the story might be shifting.

See what the community is saying about NOTE

Margins Under Pressure Despite 6.3% Net Margin

• Over the last 12 months, NOTE reported a net profit margin of 6.3%, compared with 6.7% a year earlier, while Q2 2026 net income was SEK 56 million on SEK 1,175 million of revenue.
• What stands out for the bullish view is that forecasts point to earnings growth of about 23.2% per year and revenue growth of about 13.7% per year. However:
  • Trailing margins have edged lower and recent trailing 12 month earnings were weaker than the five year 6.7% annual growth trend, which bulls need to factor in when relying on higher future profit assumptions.
  • Bullish expectations for margin improvement sit against this recent dip in net margin, so the key question is whether NOTE can turn forecast growth into stronger profitability rather than just a larger but lower margin business.

Bulls argue NOTE's push into higher margin areas could change how these Q2 numbers are viewed, especially if future profitability tracks the more optimistic growth forecasts. 🐂 NOTE Bull Case

Q2 Profitability Trails Stronger Q4 2025

• Q2 2026 net income of SEK 56 million compares with SEK 86 million in Q4 2025, even though revenue in those quarters was similar at SEK 1,175 million and SEK 1,001 million respectively, which means earnings per share of 1.96 SEK in Q2 sits well below 3.01 SEK from Q4.
• Skeptics highlight this pattern to support the bearish narrative that higher costs and competition could weigh on NOTE's earnings quality over time, and they point to:
  • Recent trailing 12 month earnings that were weaker than the earlier five year trend as an example of how profit growth has not kept a steady pace even when revenue has been solid.
  • The risk that elevated input costs or pricing pressure in electronics manufacturing could keep quarterly profit swings like Q4 to Q2 in focus, which fits the bearish concern that future earnings may be less predictable than revenue alone suggests.

Critics suggest these profit swings make it essential to understand the cautious case for NOTE, especially if cost pressures persist. 🐻 NOTE Bear Case

Valuation Gap Versus 16.6x P/E And DCF Fair Value

• NOTE trades on a trailing P/E of 16.6x at a share price of SEK 144.00, which is below both the peer average of 35.1x and the European Electronic industry average of 21.5x, and also below a DCF fair value of SEK 342.97.
• Supporters of the bullish narrative see this valuation gap as an opportunity, but the data bring a clear tension into view:
  • On one hand, the lower P/E and discount to DCF fair value suggest the stock is priced more conservatively than peers despite the forecast for earnings to grow faster than the Swedish market.
  • On the other hand, the flagged risk that operating cash flow does not comfortably cover debt over the last year means any re-rating is likely to depend on NOTE converting forecast growth into stronger cash generation, not just higher accounting earnings.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for NOTE on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Given the mixed signals around NOTE's growth, profitability and valuation, it makes sense to look through the full data set yourself before forming a view. If you want a concise summary of what is worrying investors and what they are optimistic about, check out the 3 key rewards and 1 important warning sign.

See What Else Is Out There Beyond NOTE

NOTE's recent results highlight pressure on earnings quality, with Q2 profitability weaker than Q4 2025 and net margins slightly softer despite higher quarterly revenue.

If those margin swings and balance sheet concerns feel uncomfortable, you can immediately focus on companies with stronger financial footing by checking the solid balance sheet and fundamentals stocks screener (417 results).

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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