Enento Q3'25: Cautious optimism in the outlook

Translation: Original published in Finnish on 10/30/2025 at 8:00 am EET.

Enento’s Q3 performance was largely in line with our expectations. Regarding the outlook, the company noted preliminary signs of improvement but also mentioned new regulatory threats in Finland as a downside. With the outlook looking slightly brighter, we believe a return to earnings growth is one step closer, which, combined with a moderate valuation, encourages us to keep a positive view of the stock.  We reiterate our target price of EUR 17.0 and Accumulate recommendation.

Development quite as expected

Enento's Q3 revenue increased by 1.3% to 37.3 MEUR, in line with our forecast. As expected, growth was currency-driven, and comparable revenue remained stable. There was also expected development across business areas, with Consumer Insight remaining stable (comparable -1.4%) and Business Insight growing slightly (comparable +0.9%). Enento's adjusted EBIT in Q3 was 10.7 MEUR, which was also in line with our estimates (10.8 MEUR). The gross margin continued its negative trend (80.4% vs. Q3'24: 81.4%) due to increased data acquisition costs and the sales mix. In our assessment, the trend caused by the latter will not ease anytime soon, as the relative share of new product areas with low margins (e.g., real estate services) continues to grow. However, a recovery in consumer credit information could eventually reverse this trend and also positively impact the bottom-line development.

Guidance unchanged

Enento reiterated as expected its guidance for revenue of 150-156 MEUR and adjusted EBITDA of 50-55 MEUR. In our opinion, the guidance is achievable, though the lower end of the guidance range seems much more likely for EBITDA. We now expect revenue for 2025 to grow by 1.5% to 152.6 MEUR and adjusted EBITDA to be 51.0 MEUR. The company's outlook comments were more positive than before because there are signs of a budding recovery in the Finnish and Swedish economies, which are the company's largest operating countries. This was encouraging to us and creates the conditions for the company to return to a clearer growth path next year. Conversely, regulatory threats have once again emerged, counterbalancing the improved outlook for the operating environment. In Finland, the government is proposing to expand the positive credit information register, which would require companies to check both positive and negative credit information on consumers. This could negatively impact Enento's positive credit information offering, though the proposal would also force new operators to check negative credit information, which, in turn, could support demand for the company's credit information services.

Valuation is moderate as the company returns to earnings growth

Our adjusted EV/EBIT ratios for 2025-2026 are slightly below 13x-12x, with corresponding P/E ratios of 17x-14x. This year's multiples are not yet particularly attractive, but EPS is still burdened by significant non-recurring items in the first half of the year (not adjusted in the P/E ratio) that are set to decline towards the end of the year. We believe next year's multiples are already moderate. However, these require the realization of the moderate earnings growth we anticipate, which would be supported by an upturn in the Finnish and Swedish economies and the stabilization of the Swedish credit information market. Once the company returns to earnings growth, we believe there is clear upside potential in the stock. There is no clear visibility on this yet, but considering the slightly improved outlook, we estimate that a return to steady earnings growth is one step closer. At current valuations, we thus feel that the risk/reward ratio is appealing in the current environment. While awaiting a clearer recovery, investors receive a solid dividend yield of over 6%. In addition to external factors, much also depends on the company's own actions and how it succeeds in commercializing and growing its new product areas.