Kempower Q4'25: Scraping for market shares is reflected in margins

Translation: Original published in Finnish on 02/12/2026 at 09:21 am EET

Kempower's Q4 report was weaker than expected, as the key indicator for long-term profitability, the gross margin, deteriorated due to, e.g., the geographical distribution of sales and lower pricing. A significant portion of the recent strong order growth will only be delivered in 2027, which means the 2026 revenue growth outlook is not entirely in line with previous expectations. Broadly, we still see the company's competitiveness as strong, as it is clearly gaining market share in Europe and North America. We reiterate our Accumulate recommendation but lower our target price to EUR 15 (was EUR 26) with estimate cuts.

Very strong order growth, disappointing margin level

Kempower's Q4 reported figures included surprises in both directions. New orders clearly exceeded expectations (40% y/y growth, 15% above consensus). Revenue was only at the comparison period's level due to delivery timing, which was, however, mostly in line with expectations. The gross margin weakened by 4 pp to 45.6%, even though the consensus expected a stable margin level. Personnel costs also grew slightly more than we expected, which was, however, related to sales bonuses triggered by the strong order intake in H2, of which around 3 MEUR in cost impact was allocated to Q4. Adjusted EBIT was thus -3.6 MEUR, quite clearly below our 2.1 MEUR estimate.

Growth guidance moderate compared to order development

The company guides for 10-30% revenue growth and a significant improvement in adjusted EBIT in 2026. Although the company's orders grew by an impressive 39% in 2025 and the order book (141 MEUR) was 49% higher y/y at the end of the year, only about 100 MEUR of this will be recognized as revenue in 2026, with the remainder recognized in 2027. The strong order growth has thus been partly due to longer delivery times, which we believe particularly applies to North American orders. We now forecast 24% revenue growth in 2026. Our medium-term (2028) EBIT estimate decreased by 20% due to slower growth materialization and a reduction in margin assumptions.

Market share gains are reflected in the margin level

We estimate that the weakening gross profit reflects Kempower's more aggressive growth strategy, aiming to increase market share in Europe outside the Nordic countries and challenge Alpitronic, which has achieved an estimated market share of around 3x that of Kempower in Europe. Kempower has clearly gained market share in 2025, while demand in the Nordics has slowed as the passenger car charging network approaches maturity. We consider it possible that pricing can be improved in the future as new customers become established clients of the company. The company also launched a production cost efficiency program in H2, which aims to decrease unit costs and thus keep the gross margin stable. The first impacts are expected to be visible during 2026.

We have trust in the competitiveness

Kempower operates in a strongly growing market, and we believe the company's competitiveness is strong, even though market share growth has necessitated compromises in margins. Thus, we believe the company's valuation should be viewed on the back of long-term earnings estimates that include strong growth. The utilization rates of the company's factories are still relatively low in 2025-26, but in 2027-28, earnings-based valuation multiples (EV/EBIT) are already falling to attractive levels (19x and 11x) compared to our estimated fair value range of 15-20x. The investment's riskiness is elevated by factors such as high growth expectations, the valuation's reliance on long-term value creation, and the somewhat difficult predictability of the dynamics of a relatively new industry. Currently, however, the company appears to be on its way to becoming one of the industry's major global players. The CMD to be held in Q2 could provide more visibility into the company's medium-term earnings growth prospects.