* Underlying development looks promising * We raise our '26-'28 EBIT estimates by 3-1% * Share is trading at 10x-7x '26e-'28e EV/EBIT
Margins not as soft as expected
Q1 came in 2% (SEK 4m) above our expectations on sales, for a solid organic growth of 11%, weighed down by FX of -5%. We are encouraged to see organic growth for the third consecutive quarter, and also note the second quarter in a row of positive growth in number of connections (which showed consecutive negative y-o-y development from Q4'22-Q3'25). The 4m sales beat was carried down to EBIT, which was 40% above our estimate (SEK 13m vs. 9m), as the margin of 5.7% was 1.6pp above our estimates. This is a margin decline of 2.3pp y-o-y, but a solid result given the guidance for elevated opex in H1 and temporary headwinds. Opex grew 10% y-o-y, partly driven by the onboarding of a large customer in Norway, which carried upfront costs.
Pressure to ease in H2
Careium reiterates that Q2e will also suffer from margin pressure, due to investment in efficiencies and organic growth, coupled with upfront costs for long-term contracts. We believe this is well guided, and that the underlying development looks promising. We believe continued organic growth and a relatively stable opex base will enable higher margins in H2'26. Moreover, Careium once again alluded to the possibility of selective M&A. The Nordics should show improvements in Q2 and onwards as the ADDA framework is finalised, and Careium will likely sign a framework agreement in May, if ADDA's communicated timeline holds.
We raise EBIT by 3-1% '26e-'28e
We raise '26e-'28e sales by 1% on the back of the report and updated FX movements. Our '26e-'28e EBIT estimates are up 3-1% on operating leverage and higher gross margins. Our estimates imply '26e-'28e sales and EBIT CAGRs of 6% and 22%. On our updated estimates, the share is trading at 10x-7x '26e-'28e EV/EBIT. We reiterate our fair value range to SEK 20-34.