Translation: Original published in Finnish on 11/6/2026 at 9:54 am EET.

Sitowise's Q3 result exceeded our expectations, thanks to strong growth in the Infra and Buildings business units, and the Digital Solutions business also performed better than we expected in terms of profitability. However, order intake remained sluggish, and the order book decreased slightly from the previous quarter. Taking into account the still subdued outlook for the Buildings and Digital Solutions businesses, we scaled back our forecasts for the coming years slightly. Based on next year's estimates, the valuation is at the upper end of the neutral range, and the expected return depends on continuing the earnings turnaround in 2028–2029. We reiterate our Reduce recommendation for Sitowise and revise our target price to EUR 2.5 (was EUR 2.90) in line with changes in our estimates and an increased required return.

Profitability in Q3 surprised positively

Sitowise's revenue from continuing operations increased by 5.3% to 37.6 MEUR, while our forecast was 36.0 MEUR. Growth was driven by the Infrastructure and Buildings business areas, which grew by around 8% each. Growth in the Buildings business was driven by data center projects, though the housing market remained extremely weak. Revenue in Digital Solutions decreased by 3% amid weak demand conditions.

The adjusted EBITA increased to 3.7 MEUR (Q3'25 3.2 MEUR), or 9.8% of revenue, while our estimate was 3.0 MEUR. According to our estimate, the beat is primarily due to higher-than-expected volume. The profitability of the Buildings business improved as the billing rate increased significantly but remained clearly below the target level. The Digital Solutions business area's profitability rose above the target level, supported by the seasonal weight of SaaS products and personnel reductions in Q2.

The loss from discontinued operations related to the divestment of the Swedish business was slightly lower than our forecast and, as expected, mostly consisted of translation differences with no impact on cash flow. Indebtedness is still high (net debt/adj. EBITDA 4.1x).

Order intake remained sluggish

Orders received decreased to 32.3 MEUR (Q3'25: 36.2 MEUR), and the order book decreased to 140 MEUR at the end of September (Q2'26: 145 MEUR), whereas we expected it to remain roughly at the Q2 level. Order intake in the Infra and Buildings businesses was higher than in the comparison period, so the decline must have come from the Digital Solutions business. At the same time, the company's number of employees was 2.5% lower year-on-year at the end of the reporting period.

Revisions to estimates focus on future years

Sitowise still did not provide any guidance, but it outlined its outlook for next year. The company expects the market to remain mixed next year as well, driven by investments in data centers and energy, while residential construction, the completion of alliance projects in Infra, and sluggish demand in the Digital Solutions business will act as a drag. This outlook aligns with our assessment that the earnings turnaround in the Buildings and Digital Solutions businesses is progressing slowly.

On a comparable basis, our estimate for this year's adjusted EBITA remained practically unchanged at 12.7 MEUR, as we lowered our Q4 estimate to offset the strong Q3. We lowered our adjusted EBITA estimates for 2027 and 2028 by 6% and 11%.

Expected return relies on earnings turnaround in 2027–2028

Based on our estimates for next year, Sitowise's EV/EBITDA multiple is around 8x, and its P/E multiple is around 15x, which is at the upper end of the range that we consider neutral for the company. Assuming the earnings turnaround proceeds as we estimate, the EV/EBITDA and P/E multiples will decrease to around 6x and 10x based on our 2028 estimates, which is the lower limit of our accepted valuation range. We do not yet find the risk-adjusted expected return attractive enough, as the high leverage and uncertainty surrounding the earnings turnaround keep the share's risk profile high.