Ahead of Metacon's Q3 report on November 4, we have lowered our estimates for the coming years, as the company has still not announced any new large-scale orders and the order backlog continues to draw down through execution. In addition, we have raised the risk-free rate in our DCF model, which increases our required rate of return. At the same time, we believe Metacon remains well positioned to win new orders in the coming years, thanks to its partnership with PERIC. Given that the share price has fallen by around 17% since our last update, we believe the current valuation still offers a good risk/reward. As a result, we reiterate our Accumulate recommendation but lower our target price to SEK 0.12 per share (prev. SEK 0.15 per share).

Metacon’s outlook depends on sustained order flow

In our view, Metacon's investment case hinges on improving visibility into its growth and future earnings. While the biggest positive drivers are clearly new order wins and top-line growth, the main near-term risks are slow investment decision-making among customers and securing the funding required to continue executing on its growth strategy.

Backlog execution supports Q3 revenue, but order intake remains the key

We expect Metacon to report Q3 revenue of 43.0 MSEK (Q3'25: 40.9 MSEK), driven by the continued execution of its existing order backlog, mainly the project with Elektra in Romania. We forecast EBIT of -20.0 MSEK (Q3'25: -18.3 MSEK). We expect the gross margin to recover sequentially from Q2, while savings from the cost-efficiency program, targeting a 35% reduction in fixed costs, should become partly visible. In the report, our main focus will be on signs that the growing sales pipeline is starting to convert into firm orders, as well as the development of the company's cash position and financing needs.

Slower order intake prompts lower estimates

We lower our 2026 revenue estimate by only 6%, as it is largely already secured by the current order backlog. For 2027–2028, we lower our estimates more significantly, by roughly 16%, given the lack of large orders and the long lead times needed to ramp up new orders. The lower revenue estimates also widen our forecast operating losses, and we now expect EBIT to remain negative in 2027 and turn positive only in 2028. The higher losses also increase the company’s cash burn, and we expect Metacon to need additional financing before reaching positive cash flow. In our view, the terms of any such financing will depend largely on the company’s ability to secure new orders and on prevailing risk sentiment.

Valuation still offers a good risk/reward

In our view, the fair value of Metacon's share with the current assumptions is around SEK 0.04-0.33 per share (prev. SEK 0.05-0.37 per share), which has been lowered mainly due to reduced estimates and a higher cost of capital.  While we still consider that low visibility on order intake and a durable financing solution justify a valuation towards the lower end of our fair value range, we believe the decline in the share price has kept the risk/reward profile favorable. Our recommendation assumes that Metacon continues to execute on its growth strategy and that the orders secured in recent years mark the beginning of a sustained order flow rather than a one-off success. 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.