Qt Group Q4'25: Sentiment is glum and expectations are moderate

Translation: Original published in Finnish on 02/27/2026 at 07:00 am EET

Source: Inderes & Modular Finance (02/23/2026, 4-6 analysts) (consensus)

We raise our recommendation for Qt to Buy (was Accumulate), but cut our target price to EUR 32.0 (was EUR 42.0) in line with our lowered estimates. Qt's Q4 figures were better than expected, but the cautious 2026 guidance was a disappointment compared to expectations. Following a sharp share price drop, the stock's valuation (2026e-2027e EV/EBIT 13x-10x) has fallen to a very low level, and we see clear upside potential. However, this requires a return to an earnings growth path in 2027, with the successful implementation of IAR's SaaS transformation and some easing of the challenging market situation being key. In the short term, the weak sentiment for SaaS companies also weighs on Qt's valuation, but in our opinion, AI-related fears are currently getting too much attention. Overall, expectations regarding both estimates and valuation have decreased significantly, which makes the stock's risk-reward ratio very attractive.

Q4 result exceeded expectations

Qt’s Q4 revenue (77.1 MEUR, +13%) and EBITA (27.4 MEUR, 35.6% of revenue) exceeded our estimates clearly. Towards the end of the year, distribution licenses, in particular, were at a high level, growing 26% to 57 MEUR for the full year. According to Qt, the company's customers remain cost-conscious and are delaying the initiation of new product development projects, which is reflected in the softness of developer license sales.

Estimates cut based on 2026 guidance

Qt guides for at least 10% currency-adjusted revenue growth and an EBITA margin of at least 15% for this year. According to the company, the market situation remains uncertain, which slows down developer license sales. However, the company estimates that “old Qt” will grow this year. The biggest factor slowing growth and weakening profitability is IAR's SaaS transition. IAR has generated over 40 MEUR in revenue, and this year, Qt estimates it will decrease at a "double-digit rate" as customers are transitioned to the SaaS licensing model. From 2027 onwards, Qt believes IAR's revenue will again be in clear growth. Overall, Qt's guidance was cautious compared to our previous expectations, and we have lowered our earnings estimates for the coming years by some 17-18% on the back of the outlook. We now expect 13% currency-adjusted growth and an EBITA margin of around 20% for this year.

The spread of modern digital user interfaces has not yet ended, and the use of Qt's product portfolio, expanded by the IAR acquisition, should be nowhere near its full potential within its customer base. We have also not identified serious threats to Qt in the embedded systems software development tools market, although there are younger entrants. Qt's management did not seem particularly concerned about the impact of AI on the company's business, and we do not identify an immediate threat in this regard either. In light of this equation, we believe Qt's long-term growth outlook remains good.

Valuation multiples are very low and the sentiment is glum

With our estimates, Qt's 2026-2027 EV/EBITA ratios are 13x and 10x. Overall, the sentiment around Qt's share is glum, forecasts have been declining for a longer time, and the stock's valuation multiples have been hammered to rock bottom. We believe that pessimism is currently too prevalent, and after IAR's SaaS transformation, Qt will return to an earnings growth path in 2027. If this materializes, we expect that the stock would be priced significantly higher than current multiples, and in a good scenario, current estimates could prove to be too conservative. Thus, we currently see the risk-reward ratio as very attractive. Following the recent weak performance, valuation multiples are, to some extent, justifiably under pressure, and at the same time, the generally weak sentiment in the software company sector also weighs on Qt's acceptable valuation level. The company's peer group's median EV/S multiple (2026e 4.1x) has practically halved since our update following the Q3 report.