NYAB Q2'25: Executing effectively on robust demand

NYAB delivered stronger-than-expected Q2 revenues, with EBIT in line with estimates. Market conditions in Sweden remained favorable, while the demand picture in Finland continues to be relatively soft. The order backlog reached a new record high, and the strong book-to-bill ratio signals continued robust demand. Management emphasized that they have not encountered capacity constraints and have proactively scaled the organization to meet expected growth. Following the Q2 report, we have increased our revenue estimates, while only slightly lowering margins assumptions. Consequently, we continue to see attractive risk-adjusted upside potential in the share, driven by estimated earnings growth for the coming years. However, given the recent strong share price appreciation, we lower our recommendation to Accumulate (was Buy) while increasing our target price to SEK 8.25 (was SEK 7.2).

Q2 revenue beat and EBIT aligning with estimates

NYAB continued the year on its established path, delivering strong double-digit growth in Q2 of 78% (y/y) to 136 MEUR, well ahead of our forecast of 122 MEUR. Reported growth was driven by the Dovre consolidation (~29 MEUR) but also through strong execution of the company’s order backlog (Q2’25: 425 MEUR, +25% y/y). Revenue from Civil Engineering clearly exceeded our estimates, growing 41% year-on-year (Inderes est: 23%), primarily driven by Sweden operations and a strong performance on the Finnish market, despite soft market conditions. Consulting revenue was flat (-1% vs. est: -1%) year-on-year on a pro forma basis, as the demand picture across segments remains quite mixed. EBIT came in at 5.7 MEUR (Q2’24: 3.8 MEUR), corresponding to a 4.2% margin, which matched our estimates in absolute figures but was slightly shy on margins (est. 4.6%). The company reiterated that the operating environment in core markets continues to develop favorably, supporting a positive outlook for H2’25.

We increase our revenue estimates, but trim margins slightly

Following the stronger-than-expected Q2 revenue growth, combined with a record-high order backlog, we have raised our 2025 revenue forecast, with positive carry-over effects through the rest of the forecast period. The upward revisions are primarily driven by the Swedish Civil Engineering segment, though we have also lifted our estimates for Finnish operations. For 2025, we now expect revenue to grow 58% (20% organically) to 548 MEUR (was 524 MEUR). We have slightly trimmed our EBIT-% estimates following the softer Q2 margin, acknowledging that the current rapid growth pace can challenge margin optimization in the near term, as NYAB continues to invest in staffing capacity. However, our long-term margin view remains largely intact. Our increased revenue estimates resulted in a 1-5% increase in our EBIT estimates for FY25-27. Looking ahead, we expect NYAB to maintain solid growth beyond 2025 (26-28e : 11-8%). Margins are also projected to move closer to the >7.5% target (28e EBIT-%: 7.1%), supported by more balanced revenue growth, reduced seasonality, and ongoing initiatives to strengthen the Consulting segment’s margin profile.

We still see upside in the share price despite the recent rally

Since our latest update (May 8, 2025), the share price has increased by 21%. Looking at current year’s earnings-based multiples (P/E: 17x, EV/EBIT: 12x), we believe the valuation to be relatively neutral. However, for 2026, the overall valuation picture falls to more attractive multiples (P/E: 14x, EV/EBIT: 10x), especially on EV-based multiples, which account for NYAB’s strong balance sheet. Relative to our acceptable valuation ranges (P/E: 12x-16x, EV/EBIT: 11x-15x) we continue to see good upside potential in the share. In addition, expected total return over the medium term is also above our required return for the stock. Further support for our positive recommendation comes from our sum-of-the-parts as well as DCF model, which now stands at SEK 7.2-8.8 (prev. SEK 6.8-8.3) and SEK 8.24 (prev. SEK 7.2), respectively.