Translation: Original published in Finnish on 06/17/2026 at 06:30 am EEST

Kreate issued a positive earnings revision yesterday, and we raise our target price to EUR 25.0 (was EUR 20.0). We maintain our Accumulate recommendation. During the quarter, the company announced projects worth over 200 MEUR, which will also significantly support volume levels in the coming years. We also believe that relative profitability will improve in the coming years as revenue reaches a new scale. We find the pricing still seems reasonable, considering our significantly raised earnings estimates and the expectation of substantial earnings growth.

Guidance ranges rose clearly again

Kreate’s new revenue guidance for this year is 600-650 MEUR (2025: 315 MEUR, growth 90-106%), while the previous guidance issued in March expected revenue of 510-550 MEUR. Prior to the earnings revision, our estimate for this year's revenue was 540 MEUR, so the new guidance clearly exceeds our previous expectations. According to the company, the raised guidance is due to better-than-expected execution of ongoing projects and a strong order book development during Q2. New projects have been launched quickly, and according to the company, reaching the guidance range no longer requires significant new projects. We consider this an excellent performance, as our estimates already included the consolidation of KFS Finland, the growth from the SRV Infra acquisition, and the expectation of a strengthening order book and its realization.

The company now expects 2026 EBITA to be 21.0-26.0 MEUR (2025 10.2 MEUR, growth 106-155%). The previous guidance expected an EBITA of 18.0-22.0 MEUR, and our own estimate before the earnings revision was around 20 MEUR. According to the company, the raised earnings guidance is mainly based on the estimated revenue growth. The midpoint of the new guidance (23.5 MEUR) implies an EBITA margin of approximately 3.8%, which is largely in line with our previous estimate of 3.7%. Thus, we do not expect relative profitability to rise significantly above our previous expectations; instead, strong volume will be the main driver of earnings growth.

Revenue doubles in our expectations this year

Kreate's order book stood at 689 MEUR at the end of the first quarter. During the second quarter, the company announced new projects worth just under 230 MEUR to be recorded in the order backlog. We believe the order book will reach a new record level at the end of the quarter. Our estimate is based on our updated Q2 revenue estimate, announced orders, and the order mass, which is likely to fall below the disclosure threshold. Following the earnings revision and the order book, which is still strengthening in our estimates, we have clearly raised our estimates for this year. We now expect the company’s revenue to reach 624 MEUR and EBITA to be 24 MEUR.

Thanks to the strong order intake in H1, we believe the company will also start next year with a higher order book than this year, provided the order flow remains stable during the rest of the year. Reflecting this, we have also raised our estimates for the coming years. In addition, we believe Kreate still has good opportunities to improve its relative profitability in the current market situation. We believe profitability this year will continue to be weighed down by front-loaded growth investments in personnel, especially during the first half of the year.

Earnings growth continues to turn multiples to an attractive level

Despite the recent sharp rise in the share price, the company's earnings-based valuation multiples turn to a neutral level with our updated estimates (P/E 13x, EV/EBIT 11x). Supported by a strengthening order book and largely positive end-market outlook, we expect earnings growth to push next year's multiples to an attractive level (P/E 11x, EV/EBIT 9x). In addition to the forecasted earnings growth, the stock offers a dividend yield of around 4%, supporting the stock's total expected return.