Metacon's Q3 revenue and earnings were below our expectations, but more in focus for us were order intake and management's comments on the order situation going forward. Order intake continues to be dry, and in our view, the report gave no clear signals that a new order is around the corner. Even so, we still see good chances for Metacon to increase its order intake over the coming years and get growth back on track. While our fair value range remains unchanged, we now lean more towards its lower end given increased forecast and financing risks, and we therefore lower our target price to SEK 0.10 per share (prev. SEK 0.12 per share). However, we reiterate our Accumulate recommendation. Our recommendation is based on the assumptions that the company regains order momentum and succeeds in converting its sales pipeline into firm orders, in which case we see good upside in the share from the current low valuation levels.

Lower revenue recognition, cost overruns and no new orders

Q3 revenue was below our expectations, as revenue recognition from the major projects slowed when these transitioned into the installation and commissioning phase, while cost overruns in one of the company's largest projects pushed gross profit into negative territory. More importantly, in our view, Metacon reported no new orders in the quarter, and order intake over the past 12 months has been very limited.

Revenue estimates unchanged, but EBIT estimates lowered

We keep our 2026 revenue estimate unchanged, as we now expect revenue recognition to be spread more evenly across the quarters, with part of the revenue we had expected in Q3 shifting to Q4. Our 2027–2028 revenue estimates are also unchanged, as they rest on our assumptions about the company’s future order intake. We emphasize, however, that our growth estimates remain subject to high risk, as Metacon has yet to secure any new large-scale orders. In our view, the company has good chances of increasing its order intake, given its competitive positioning through the partnership with PERIC, the growing sales pipeline, and the recently launched 20 MW module, which should make its offering more competitive in tenders. The planned reference plant in Uppsala should also support sales, although primarily over the longer term.

On the earnings side, our 2026 EBITDA estimate has been lowered due to the higher-than-expected project costs in Q3, while our EBITDA estimates for 2027-2028 are largely unchanged, and we continue to expect Metacon to reach a positive EBITDA in 2028. Higher CAPEX and depreciation assumptions related to the reference plant have lowered our EBIT estimates for 2027-2028, although the changes are relatively small in absolute terms.

Increased risks lead us to lean towards the lower end of the fair value range

In our view, the fair value of Metacon's share with the current assumptions remains around SEK 0.04-0.33 per share. However, we believe that forecast risks have increased, as the company has still not secured any new orders. In addition, the falling share price has increased financing risks, as a lower share price makes a potential equity issue more dilutive for existing shareholders. At the same time, the ongoing cost-efficiency program should reduce the company's cash burn going forward, and Metacon also holds assets that could potentially be divested to extend its runway, which in our view somewhat mitigates the near-term financing pressure. Nevertheless, we now lean more towards the lower end of our fair value range, which is reflected in our lowered target price. We emphasize that the share's valuation could change significantly if our expected drivers (e.g. new order wins) do not materialize. Investors must believe in the company's global commercial breakthrough, take a long-term view of the stock, and accept the risk of potential capital loss.