NYAB Q4'25: Quality at a deep discount

NYAB delivered Q4 revenues in line with our estimate, while EBIT surpassed our estimates, with management commentary indicating that utilization of the expanded workforce has normalized sooner than we anticipated. Looking ahead to 2026, we expect growth to moderate from the very high levels in 2025, as NYAB faces tougher comparables coupled with a sequentially lower, albeit still high, order backlog and a book-to-bill ratio remaining below 1x in Q4. However, we see good conditions for margin expansion, as the expanded workforce will be further integrated into the project portfolio. The broader market outlook remains mixed, with continued strength in Sweden contrasted by ongoing caution in Finland. At the same time, however, we believe that recent large contract wins provide strong visibility into our 2026 revenue estimates. Following the Q4 report, we have raised our near-term margin assumptions slightly while keeping our revenue estimates intact. We maintain our Buy recommendation while increasing our target price to SEK 8.0 (was SEK 7.9) on increased earnings estimates.

EBIT beat driven by faster workforce integration than expected

NYAB's Q4 revenue grew 32% year-on-year to 154 MEUR, in line with our estimate (156 MEUR), and driven by the full-quarter contribution from Dovre (28 MEUR) as well as solid organic growth of 9%. Organic growth was supported by the realization of the company’s strong order backlog (Q4’25: 381 MEUR, +18% y/y). While revenue growth from the Civil Engineering segment aligned with our expectation (9% y/y, Inderes est: 10%), top-line growth was mixed across geographies: Finland was below our estimate and Sweden outperformed. Consulting revenue increased by 9% (Inderes est: 6%) year-on-year on a pro forma basis, supported by the completion of several larger projects, although the activity levels in the Norwegian offshore market has softened according to management. EBIT came in at 12.7 MEUR corresponding to an 8.2% margin (Q4’24: 10.5%), which was above our estimates in absolute figures (11.9 MEUR) and on margins (7.6%). This was mainly due to the expanded workforce being utilized faster than expected.

We maintain our revenue estimates, but inch margins upwards

We make no material changes to our revenue estimates following the Q4 report, but raise our margin assumption for 2026 on the better-than-expected margin development in Q4, with minor positive spillover effects on nearer-term estimates. For 2026, we forecast revenue of 614 MEUR (12% y/y) with an EBIT margin of 6.6% (was 6.3%). This reflects moderating growth as comparables toughen and the M&A contribution from Dovre ceases, while we expect to see gradual margin improvement as operational efficiency increases and the impact of earlier capacity investments further normalizes. In addition, we feel recent large contract wins in Sweden provide increased visibility for our 2026 revenue estimates and materially de-risk the near-term growth outlook. Our longer-term view remains intact, where we view NYAB well-positioned to benefit from structural growth drivers in Nordic infrastructure markets, particularly the energy transition and railway modernization. We believe the key near-term execution challenge lies in maintaining operational momentum and driving the margin recovery that we expect.

Mr. Market continues to undervalue NYAB in our view

Based on our updated estimates, we believe the overall earnings-based valuation for the current year to be at very attractive levels (P/E: 12x, EV/EBIT: 8x), especially on EV-based multiples, which account for NYAB’s strong balance sheet. Relative to our acceptable valuation ranges (P/E: 12x-16x, EV/EBIT: 11x-15x), we therefore see strong upside potential in the share, as we believe the market continues to undervalue NYAB despite a business model that delivers structurally higher margins and greater scalability than broader legacy providers. In addition, our expected total return over the medium term is also well above our required return for the stock. Further support for our view comes from our sum-of-the-parts as well as DCF model, which now stand at SEK 7.9-9.6 and SEK 8.17 (was SEK 8.06).