Translation: Original published in Finnish on 8/21/2026 at 8:30 am EEST.

Auroora's Q2 figures clearly exceeded our estimates. The strong and broad-based organic growth was particularly promising. The share's valuation has risen (2027e adj. EV/EBIT 13x), but the business's organic trend and the value creation opportunities arising from a strong balance sheet argue for us to remain on board with the compounder's flywheel. We have made clear upward revisions to our organic growth estimates, which also raises acceptable valuation multiples. We raise our target price to EUR 11.5 (was EUR 8.0) and reiterate our Accumulate recommendation.

Strong growth across all segments

Auroora's Q2 revenue grew by 41% to 75.0 MEUR, beating our forecast of 24% growth by a clear margin. Organic growth was as high as 26%, and positively, it was broad-based across all segments. However, in our assessment, it was particularly strong in the Electrification and Automation segment. Here, the development was supported to some extent by timing factors (completion of large projects transferred from Q1), which boosted revenue by ~4 MEUR. Overall organic growth in H1 was 21%, which better reflects the trend for the entire first half of the year. Adjusted EBITA more than doubled to 6.5 MEUR (Q2'25: 2.7 MEUR), clearly exceeding our 4.1 MEUR estimate. Earnings also improved in every segment, with about half of the improvement coming from completed acquisitions and half organically. Return on capital employed (ROCE) rose to 17.5% in Q2, already exceeding the company's target level of 15%. However, the company is sticking to its target, as too strict a target could negatively impact the pace of reinvestment.

Strong balance sheet offers dry powder for M&A

Auroora's balance sheet is strong after the IPO (net debt/EBITDA 0.7x vs. Q4'25 2.1x). Thus, we estimate the company could immediately allocate 30-40 MEUR to M&A while remaining at roughly its 2.0x target level. The company described its project pipeline as strong after the IPO, and we consider new deals likely in the remainder of the year.

Order book supports the near-term outlook, significant upward revisions to forecasts

Auroora does not provide guidance, so the most important near-term indicator is the order book, which grew to 169.5 MEUR (Q1'26: 162.5 MEUR), driven by Electrification and Automation. The order book also includes deals for next year, which improves visibility. Demand is particularly supported by investments in electricity grids, energy efficiency, data centers, and industrial electrification, as well as defense and security of supply projects. The demand environment is naturally supported by Finland's generally revitalized economic growth. We raised our operating profit forecasts for the next few years by some 22-26%, although some of this increase came from the Suomen Teknohaus acquisition. We expect Auroora's revenue to grow by 30% to 267 MEUR this year, and adjusted EBITA to improve to 21.8 MEUR. The forecasts do not include acquisitions and will therefore be updated as deals materialize.

We remain on board with the flywheel

Auroora's adjusted P/E ratios for 2026-2027 are 20x-16x, and the corresponding adjusted EV/EBIT ratios are 15x-13x. We believe the current year's multiples are somewhat tight, but these do not account for completed acquisitions, and next year's multiples are already moderate, considering the business's strong organic growth outlook. Our DCF model indicates a value of EUR 9.6 per share. The share is thus slightly above the current price and, in our view, already prices in some value creation from future acquisitions. However, we believe this is justified given the company's track record in recent years and the opportunities created by its strong balance sheet. Valuation risk has naturally increased with the share price appreciation, but we believe the risk/reward ratio at the current valuation is still attractive as the compounder's flywheel moves in the right direction.