Translation: Original published in Finnish on 10/22/2026 at 8:00 am EEST.

We reiterate the EUR 3.3 target price and Buy recommendation for the stock. Digital Workforce's revenue grew strongly, including organically, in Q3. However, growth did not scale as expected as the company continued its investments. The company is starting a new strategy period next year, and we expect only minor adjustments to its focus areas. In addition, we expect the company's financial targets to reflect a front-loaded focus on growth, with scaling into stronger profitability materializing only toward the latter part of the period. The share's valuation (2027e EV/EBIT 10x, P/E 10x) is quite attractive thanks to the partially scaled estimates and an interesting story. 

Strong growth continued, but capex weighed on profitability

Digital Workforce's revenue grew very strongly (44%) to 7.9 MEUR, beating our forecast of 7.5 MEUR. Growth was driven in particular by the strategically important Continuous Services business (59%). Organic growth was strong (10%), which is very positive. Strong growth did not scale as expected, as adjusted EBITDA was 7% and in line with the comparison period. Profitability was weighed down by strong investments in growth. The company reported, among other things, that it has doubled its commercial team in the UK to support its NHS expansion.

A new strategy begins next year

Earlier in the 2020s, Digital Workforce has shaped and refined its strategy quite clearly. Today, the company's strategy is significantly more focused in terms of its offering and geographical areas, and is currently generating good organic growth. Thus, we do not expect any major changes to the strategy, but at most refinements to the priority areas. We expect the strengths and priorities of the acquisitions made by the company over the past year to be more clearly visible in the strategy. It will also be interesting to see the company's new financial targets (even though the company has not historically achieved its previous targets), as the company is in an interesting growth phase. We estimate that the company's financial targets will reflect growth in the early stages of the new strategy period and better scalability towards the end of it.

Margins to scale from next year, faster thereafter

Digital Workforce guides revenue to grow by 27–37% in 2026 compared to 2025. In addition, the company expects the adjusted EBITDA to be 7–13% of revenue. Following the Q3 report, we slightly lowered our profitability expectations for the current year, as the company is investing heavily in growth. At the same time, we slightly raised our forecasts for the coming years, driven by a strong growth outlook. We forecast 2026 revenue growth of 33% (12% organic) to 32 MEUR, with the adjusted EBITDA margin at 7.3%, constrained by investments. In the coming years, we expect growth to slow slightly and to partly feed through to profitability.  When comparing profitability with the IT services sector, we prefer our own adjusted EBIT margin, which adjusts for goodwill amortization but not for the amortization of capitalized product development (~2% of revenue).  On this metric, our profitability expectations remain relatively moderate compared with the company’s potential, and especially with its targets (EBITDA margin >15% by 2026).

Equity story is interesting, valuation picture very attractive

In terms of its investment profile, Digital Workforce is still partly a turnaround company. Next, the investment story requires evidence of growth scalability, which we estimate would simultaneously resolve the undervaluation. Solid organic growth for the current year (~14%), strong contract wins, the sales pipeline, and improved economic outlook support the continuation of strong demand. In our view, the strategic focus and its depth have also eliminated the disruption risk created by artificial intelligence, which is further evidenced by contract wins and strong growth. With the 2027 profitability estimates – which include the entire acquisition and are partially scaled (EBITDA: 10%) – the valuation picture (2027e EV/EBIT 10x, P/E 10x) is very attractive. Based on the valuation multiples, the sum of the parts (EUR 3.7), and the DCF calculation (EUR 3.5), we estimate the fair value range of the share to be EUR 3.2–3.7. However, reaching the upper end also requires continued evidence of the organic continuation of the earnings turnaround, where a key factor is the scaling of growth into profitability.