Digital Workforce: Improved confidence and cheaper valuation

Translation: Original published in Finnish on 3/20/2026 at 7:19 am EET.

We raise our recommendation for the share to Buy and reiterate our EUR 3.2 target price. Yesterday, Digital Workforce hosted an Investor Day, during which the company discussed its strategy, AI and its applications within the company, the healthcare market, and the company's updated financial target. In our view, the strategy and narrative have become clearer in recent years and are moving in the right direction. However, the evidence in terms of numbers has remained limited. Yesterday’s presentations provided deeper insight into the company’s positioning and competitive advantages in a market shaped by artificial intelligence. The company appeared more confident than before about the future and about continuing to resolve sales bottlenecks. We revised our forecasts almost exclusively due to a change in the accounting treatment of licenses, which has no impact on the result. With our estimates at the lower end of the guidance, the valuation of the share (2026e EV/EBIT at 12x with an EBITDA margin of 9%) has become very attractive following the decline in the share price (13%). The Investor Day presentation can be viewed here.

Strategy resonates, and Investor Day deepened understanding of competitive advantages

Although the strategy has been refined in the right direction in recent years, the results have been slim in terms of numbers. The company presented its positioning and solutions deep within the insurance and healthcare customer segments. Additionally, the company employs a large number of industry experts who develop solutions executed by AI agents. This improved our understanding of the company's positioning and competitive advantages compared to other small AI startups and automation platforms. Furthermore, the contract wins early in the year, along with the company’s confidence in its presentations and targets, have improved confidence that the much-needed results will materialize.

Our estimates are at the lower end of the guidance

Digital Workforce announced on Tuesday that it is changing its accounting policies for license sales and clarifying its outlook and strategic targets for 2026. As a result, a portion of license sales will be reported on a net basis, reducing reported revenue but improving relative profitability. In our view, this change will clarify the company’s reporting and make it more comparable with international practices. We have adjusted our model and forecasts accordingly, meaning the impact was primarily felt in revenue (-16%), while earnings remained virtually unchanged in absolute terms. We forecast revenue growth of 17% to 28 MEUR and an EBITDA margin of 9% in 2026. Our estimates are thus at the lower end of the guidance (guidance growth ≥15% and adj. EBITDA-% 7-13%).

Still an ambitious target for 2026

Another notable topic at the Investor Day was the company’s lowered financial target, which now projects 40 MEUR in revenue in 2026, including acquisitions (was 50 MEUR). The profitability target remained unchanged, and the company still aims for adjusted EBITDA of over 15% by the end of 2026. Overall, the company also seemed confident about this target but achieving it will require a fairly large acquisition soon. The target indicates much stronger organic growth than our forecasts as well, which could lead to positive surprises versus our projections (conservative estimates).

Valuation picture very attractive, driven by falling share price

In terms of investment profile, Digital Workforce is still a turnaround company whose turnaround in profitable growth progressed the year before last. There was a slight setback at the beginning of last year, but things picked up again toward the end of the year. Strong contract wins early in the year and an improved outlook bode well for the current year. With profitability estimates only partially scaled for 2026 and our forecasts at the lower end of the guidance (EBITDA: 9%), the valuation picture is already very attractive (2026e EV/EBIT 12x, P/E 12x), considering the improved outlook and the potential for positive surprises. Strategic positioning has also eliminated the disruption risk created by AI. Based on the valuation multiples and the DCF calculation (EUR 3.2), we estimate the fair value range of the share to be EUR 3.0-3.8 per share. However, reaching the upper end of the range requires stronger evidence that the earnings turnaround is continuing, in addition to the outlook.