Translation: Original published in Finnish on 09/17/2026 at 08:15 am EEST

Nightingale's H2'26 fell short of our estimate in terms of revenue and earnings, even though growth from the comparison period was clear. In addition to revenue, earnings were weighed down by a decline in the gross margin.  The company reiterated its revenue target of at least 10 MEUR for the started financial year, achieving which, according to management, also requires active closing of new deals in addition to the successes already announced. We cut our earnings estimates based on the development of the gross margin. We revise our target price to EUR 1.1 (was 1.4) and lower our recommendation to Accumulate (was Buy) in line with the estimate revisions.

Revenue grew, but fell short of the target

Nightingale's H2'26 revenue grew by 29% year-on-year to 3.09 MEUR, falling short of our 3.5 MEUR estimate. Revenue for the full financial year was 5.50 MEUR (2025: 4.69 MEUR), meaning growth of 17%, while the company's target was over 50%. The difference is almost entirely explained by the 2.4 MEUR research project with Aalborg University, of which approximately 2.0 MEUR of revenue was carried over to the current financial year in accordance with the June profit warning. Growth was driven by research customers and the Terveystalocollaboration, where blood analysis is in routine use in occupational health services and through which over 250,000 Finns have already received the test. The ramp-up of international healthcare partnerships progressed slowly.

Operating expenses under control – material costs weighed on the result

H2 was -10.0 MEUR, when we expected -9.0 MEUR (H2’25: -10.3 MEUR). The EBIT for the full financial year improved slightly to -18.8 MEUR (Q4’2025: -19.4 MEUR). The biggest cost deviation came from materials and services, which more than doubled to 2.7 MEUR (1.2 MEUR). This was driven by a change in the sales mix, and we estimate that the surprisingly high costs also indicate preparations for the deliveries of the Aalborg project. Otherwise, operating expenses were slightly lower than we expected. Cash assets at the end of the period were 37 MEUR and net cash was 33 MEUR (H2'25: 41 and 38 MEUR). At the current burn rate, we estimate that the cash will last for roughly 2.5 years. Due to heavy losses, we consider raising additional funding quite likely. Growth in the coming years will also heavily determine the valuation level at which potential additional funding can be raised. Strong growth enables a financing round at a high valuation, whereas a low valuation can significantly dilute the share capital. Consequently, the financial situation increases the binary risk of the investment.

Downward revisions to earnings estimates

The company reiterated its revenue target of at least 10 MEUR for the started financial year, which is in line with our 10.2 MEUR estimate. The rolling-over Aalborg project fulfills part of the target. We leave our revenue estimates for the 2027 and 2028 financial years unchanged, as the company's growth outlook remains largely unchanged. We lower our EBIT estimates for the coming years by 8% based on our revised assessment of the future gross margin. Our fixed cost estimates remain practically unchanged. Our long-term earnings estimates also decrease moderately due to gross margin pressures.

Valuation is moderate, but risks are high

Based on our DCF model, the share value is still EUR 1.1. It is difficult to determine Nightingale’s value on a fundamental basis because potential scenarios range from capital destruction to multiplication, and we estimate the fair value of the share to settle in a wide range of EUR 0.4–4.2. Investors must believe in the company's global commercial breakthrough, take a long-term view of the stock, and accept the risk of capital loss. The financial risk is clearly on the rise due to cash burn, which is why achieving rapid growth is an absolute prerequisite for a good share return. To quote management, the core of the investment case is: “deals, deals, deals!”