Digia Q4'25: Stable earnings machine available at a good price

Translation: Original published in Finnish on 02/06/2026 at 09:23 am EET

We raise our target price to EUR 7.5 (was EUR 7.2) and recommendation to Buy (was Accumulate). Digia's past year, and particularly Q4, were good in terms of figures, especially considering the market headwinds. The company's guidance was slightly cautious, which is likely explained by front-loaded investments in the new strategy period. However, the company has executed its strategy robustly for 10 years, which increases confidence in the continuation of good execution. The stock's valuation (2026e P/E 10x and EV/EBIT 8x) is very attractive, especially considering the confidence in its earnings capacity, low risk profile, and a large share of recurring business.

Revenue grew driven by an acquisition, and profitability was strong in Q4

Digia's Q4 revenue grew by 8%, which was well in line with our expectations. Organically, revenue grew slightly (2%) and better than the sector (Q3: -2%). Digia's adjusted EBITA grew clearly to 8.1 MEUR, which was slightly below our estimate of 8.6 MEUR, raised two days ago. The adjusted EBITA rose to 13.4% from 10.7% in the comparison period. Profitability can be seen as very good in the current market situation, and it was supported by organic growth and implemented efficiency measures. Digia's Q4 and the full year can be considered successful and a top-tier performance in the sector. As expected, the company's Board of Directors proposed a dividend of EUR 0.19 per share for 2025, which is a one-cent increase from the previous year and represents 40% of earnings.

The new strategy period was an expected continuation of the previous one

During the 2026-2028 strategy period, the company aims to expand into a European trusted partner for intelligent business, both organically and through acquisitions. In the big picture, there are no major revisions to the strategy; it is an update to the previous one. AI has, of course, been brought more strongly into the strategy. The financial targets are otherwise the same (growth over 10% and EBITA% >12%), but the share of international business was raised as anticipated (to 30% of revenue). The new targets are achievable, but we believe the growth and internationalization targets require new acquisitions and support from a better market situation. The profitability target, in turn, still necessitates solid operational execution and success in productization and scalable solutions.

Good performance also in the coming years

The company remained cautious in its market comments. Digia commented that there are small glimmers of light in the private sector, but the public sector remains challenging. Digia's guidance is that revenue will grow and EBITA will be at the comparison period's level or grow in 2026, which is a bit cautious. We expect Digia's revenue to grow by around 4% in the current year and adjusted EBITA to be 23.2 MEUR, or 10.3% of revenue (2025 reported 21.3 and adj. 22.9 MEUR). In 2027-2028, we expect the company to grow organically by 3-4% and the EBITA margin to rise to 11%. Thus, the company is at a good level in the coming years as measured by the Rule of 20. In addition, Digia is very likely to accelerate the execution of its strategy and growth through acquisitions, which its healthy balance sheet and strong cash flow enable.

Steady earnings growth at an attractive price

Digia has strengthened its profile as an earnings growth company and has risen to become one of the sector's top performers, which supports the share valuation. Based on the valuation methods we use, the stock is priced at least attractively (2026e P/E 10x, EV/EBIT 8x and expected return >15%) or even very attractively from all perspectives. Considering our DCF calculation (EUR 8.6) and the relative valuation level (25% below peers), the share is very attractively priced. In addition, the company's risk profile is among the lowest in the sector. In summary, we see the fair value of the share in the range of EUR 7.2-8.8 per share.