Automatic translation: Originally published in Finnish 09/10/2026, 04:00 GMT. Give feedback here.

We reiterate our Buy recommendation and EUR 40.0 target price for Admicom. The Q3 report was encouraging, as sales continued to pick up and the savings from change negotiations boosted profitability to clearly better than we expected. Our estimates for the current year increased, but our forecasts for the coming years remained virtually unchanged. However, we believe that forecast risks are lower than before, and thus the Q3 results strengthened our confidence in the earnings growth estimates for the coming years. Despite the share price rise on the earnings release day, the stock's valuation (2027e adj. EV/EBIT 9x) remains very low.

Sales continued to pick up

Admicom's Q3 revenue grew by 4% to 9.7 MEUR and slightly exceeded our 9.5 MEUR estimate. Annual Recurring Revenue (ARR) grew by 5% to 38.6 MEUR and by 4% quarter-on-quarter. Growth was supported by price increases, while the decrease in annual reconciliation billing trimmed about 1.6 pp from revenue growth. Sales orders grew for the second consecutive quarter by 17% year-on-year, which lays the foundation for next year's growth as new customer onboarding is partly weighted toward the turn of the year. Headwinds were still caused by customer churn kept elevated by bankruptcies and customer base consolidation (LTM: 7.8%). The company has not observed any AI-related customer churn.

Very strong profitability in Q3

Admicom's adjusted EBITDA rose to 4.1 MEUR (Q3'25: 3.7 MEUR) and clearly exceeded our 3.6 MEUR estimate. The adjusted EBITDA margin strengthened by over 2 pp to 42.0%. This was driven by revenue growth and savings from the change negotiations held in Q2, which materialized more efficiently than we expected. According to the company, profitability was slightly higher than its own targets, as new employees mostly started only at the end of the quarter, and costs have otherwise been taken in cautiously. We expect the cost level to rise in Q4 as recruitment and development projects progress. Admicom's balance sheet is very strong, with a net cash position of around 9.6 MEUR at the end of Q3.

Lower end of ARR guidance looks easily achievable

Admicom reiterated its guidance, according to which ARR will grow by 3-10% this year, revenue by 2-6%, and adjusted EBITDA will be 31-36% of revenue. The lower end of the ARR guidance requires growth of only around 1% in Q4 from the Q3 level, whereas the upper end of the range would necessitate an acquisition in practice. We raised our adjusted EBIT estimate for the current year by 4%, but our estimates for the coming years remained virtually unchanged. However, we believe that forecast risks have decreased. The recovery of the construction market relies on data center and infrastructure projects, which benefit Admicom's SME customers mainly through subcontracting. RT expects housing construction, which is important for customers, to remain at a low level throughout 2027. We estimate that customer churn will remain elevated next year as well. However, when the market turns, Admicom would benefit through several channels as customer revenue and user counts grow, bankruptcies decrease, and sales become easier. We forecast revenue growth to improve to 5.5-9.7% in 2027-2028 and the adjusted EBITDA margin to rise to 35-37% by then.

Valuation is still very low

Based on our estimates for the current year, Admicom trades at an EV/EBIT multiple of 11x, and if the earnings growth we forecast materializes, the valuation (2027-2028e EV/EBIT 9x-7x) falls to a very low level. We find the level attractive, as we see the company's investment profile as a high-quality earnings growth company when looking a bit further ahead. We believe that valuation will begin to correct when concrete signs of the company's accelerating growth are seen, and the Q3 results were the first step in this regard. In the short term, sentiment towards SaaS companies weakened by AI fears will likely still weigh on Admicom's acceptable valuation, even though the worst panic seen earlier in the year has subsided to some extent.