Translation: Original published in Finnish on 10/27/2026 at 8:10 am EET.

Kreate's Q3 earnings were largely in line with our estimates, as the EBITA margin rose above 6% thanks to record-high volume and the successful execution of projects. The order book developed more strongly than we expected, which led us to raise our revenue and earnings forecasts. However, offsetting this, we raised our forecast for the non-controlling interest’s share of earnings, as KFS Finland has performed better than we had anticipated. Kreate's share has risen by ~170% since our recommendation change at the beginning of the year, and following the recent share price increase, the expected return based on our current estimates falls below our required return. We reiterate our EUR 38.0 target price and lower our recommendation to Reduce (was Accumulate).

Margin rose above 6%

Kreate’s revenue grew by 121% in Q3 to 209.5 MEUR, which was in line with our estimates. EBITA tripled to 12.9 MEUR, slightly exceeding our estimate (12.3 MEUR). The margin rose to 6.2%, and according to management, the result was generated broadly across various operations and projects.

Earnings per share (EUR 0.87), however, fell significantly short of our forecast (EUR 0.99) due to a larger share of non-controlling interests in KFS Finland than we had anticipated. The order book fell 4% from its record high in Q2 to 848.5 MEUR, despite the fact that contracts announced by value amounted to only about 15 MEUR during the quarter. Meanwhile, undisclosed additions to the order book totaled 157 MEUR. This also includes the announced renovation and extension of the Government Palace and the earthworks contract for QTS's data center campus in Forssa, the values of which have not been disclosed. In addition to these named projects, we believe that the order book also includes unannounced data center projects, among others. 

Order book supports our growth estimates for next year as well

As expected, Kreate reiterated its guidance for 2026 of 670-710 MEUR revenue and 32-36 MEUR EBITA. The company expects to recognize 195 MEUR in revenue from the order book during the remainder of the year, so we increased our revenue forecast for the current year to 696 MEUR (was 685 MEUR) and our EBITA forecast to 34.9 MEUR (was 34.1 MEUR). Our estimates thus fall within the upper half of the guidance ranges, and a fourth positive profit warning is not entirely out of the question.

We expect the company's order book, which is more than three times larger than it was a year ago, to sustain the earnings level next year as well. On the other hand, the order book includes significant multi-year projects, so revenue growth largely depends on the company's ability to secure and replace projects, such as data centers, that generate revenue quickly. We increased our EBITA forecasts for the next few years by about 5%. Conversely, our EPS-level estimates remained roughly unchanged.

Valuation appears neutral even in the longer term

Our target price values Kreate at a P/E ratio of approximately 13–12x and an EV/EBIT ratio of about 10x, based on our 2027–2028 forecasts. These multiples are within our accepted range (EV/EBIT 10–12x, P/E 10–13x), though the P/E multiple is already at the upper end. Based on this year's earnings, the share is valued at a P/E multiple of ~15x, meaning that the earnings growth we forecast for next year will largely be used to digest the multiples. The fair value of our DCF model is roughly in line with our target price.

The expected return is supported by the 5–6% dividend yield we forecast for the coming years. However, following the share price increase, the total expected return remains below the required return we apply. Upside to our estimates, and thus to the share price, could be provided by a stronger order intake and profitability than we expect if increased volume and successful project risk management lift margins more than we estimate.