contentSlug

type

ContentSlug_ContentQuery

slug

ContentPageContentQuery

content

trendingContent

query ContentSlug_ContentQuery(
  $contentSlug: String!
  $type: [ContentType!]
) {
  ...ContentPageContentQuery_13QmVO
}

fragment CompanyDetails_Content on Content {
  __isContent: __typename
  companies {
    name
    description
    pageUrl
    id
  }
}

fragment ContentBasicInfo on Content {
  __isContent: __typename
  id
  type
  title
  lang
  companies {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  tags {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  ...PublishingDetails
  ...Reactions
}

fragment ContentMetadata on Content {
  __isContent: __typename
  type
  title
  lang
  pageUrl
  alternatePageUrls: translations {
    __typename
    pageUrl
    lang
  }
  imgUrl
  description
  ... on Video {
    liveTime
    videoUrl
  }
  ... on Webcast {
    liveTime
    videoUrl
  }
}

fragment ContentPageContentQuery_13QmVO on Query {
  content(slug: $contentSlug, type: $type) {
    __typename
    id
    type
    title
    isPremium
    lang
    htmlBody
    summary
    companies {
      forum {
        latestPosts {
          ...ForumPosts
        }
      }
      name
      id
      viewerIsFollowing
      pageUrl
      defaultInstrument {
        isin
        id
        marketOpen
        marketClose
        marketplace {
          region
        }
        returns {
          total
        }
      }
    }
    tags {
      viewerIsFollowing
      id
      name
      pageUrl
    }
    createdAt
    ... on Video {
      liveTime
    }
    ... on Webcast {
      liveTime
    }
    slug
    ... on CompanyReport {
      reportUrl
    }
    ... on ThirdPartyCompanyReport {
      reportUrl
    }
    ... on StockExchangeRelease {
      reportUrl
    }
    ...ContentBasicInfo
    ...ContentMetadata
    ...PriceAndRecommendation_Content
    ...CompanyDetails_Content
    ...ReportLink_Content
    ...KeyFigures_Content
  }
  ...TrendingContent_1jQ2Cn
}

fragment ForumPosts on ForumPost {
  text
  likesCount
  url
  author
  postedAt
  authorImgUrl
}

fragment KeyFigures_Content on Content {
  __isContent: __typename
  companies {
    defaultInstrument {
      estimateData {
        modelType
        reportingCurrency
      }
      snapshot {
        transaction {
          date
          actualized {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
          estimates {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
            nav
            navPerShare
            opexOfNav
            quarterlySharePrice
          }
        }
      }
      id
    }
    id
  }
}

fragment PriceAndRecommendation_Content on Content {
  __isContent: __typename
  createdAt
  companies {
    name
    pageUrl
    defaultInstrument {
      priceData {
        tradeCurrency
      }
      snapshot {
        priceData {
          date
          lastPrice
          tradeCurrency
        }
        transaction {
          date
          recommendation
          targetPrice
        }
        prevTransaction {
          recommendation
        }
      }
      id
    }
    id
  }
}

fragment PublishingDetails on Content {
  __isContent: __typename
  createdAt
  publishers {
    name
    imgUrl
  }
  authors {
    __typename
    id
    name
    slug
    imgUrl
    jobTitle
  }
  ... on Video {
    liveTime
  }
  ... on Webcast {
    liveTime
  }
}

fragment Reactions on Content {
  __isContent: __typename
  id
  reactionGroups {
    reactionType
    reactionsCount
    viewerReacted
  }
}

fragment ReportLink_Content on Content {
  __isContent: __typename
  type
  isPremium
  ... on CompanyReport {
    reportUrl
  }
  ... on ThirdPartyCompanyReport {
    reportUrl
  }
  ... on StockExchangeRelease {
    reportUrl
  }
}

fragment TrendingContent_1jQ2Cn on Query {
  trendingContent(type: ARTICLE) {
    __typename
    id
    title
    lang
    pageUrl
    createdAt
    type
    imgUrl
    companies {
      squareLogoUrl
      name
      id
    }
    authors {
      __typename
      imgUrl
      id
    }
    publishers {
      imgUrl
    }
  }
}


__typename

title

isPremium

lang

htmlBody

summary

companies

createdAt

publishers

authors

reactionGroups

pageUrl

translations

imgUrl

description

Mikael Rautanen

Head of Nordic ER Development, Analyst

Antti Luiro

QT Group operates in the IT sector. The group develops various development tools for the global market. The technology is based on QT technology and is used to develop multi-platform interfaces and associated applications. The services are used in, among other things, industrial robots, entertainment systems, and vehicle systems. Operations are conducted on a global level and customers are found in the automotive and aerospace industries.

I really like that particular ratio, but it doesn’t suit software companies at all. Usually, they don’t have fixed assets other than maybe an office (which might be rented), a pile of laptops and other similar IT equipment, a pile of cash, and maybe some liquid investments and accounts receivable. That’s about it. Then, on the debt side, there’s often something, so the tangible book value can’t really rise much unless the company starts hoarding cash. That, in turn, would be poor capital allocation. The thing with software companies is that they really don’t have fixed assets, so if the business melts away, there usually isn’t anything to act as a downside buffer. However, the value of software companies lies in the software, which is hopefully critical from the customers’ perspective. It’s better to focus on other ratios instead, such as metrics for cash flow, net profit, or operating profit. Microsoft’s TBV is around 250bn while it simultaneously generates 160bn in operating cash flow per year. You shouldn’t value Microsoft based on its fixed assets. They certainly have more on the tangible side compared to many software companies since they have their tentacles in many things. Adobe also has a negative figure for that, as does Constellation Software. If Qt’s customers were to abandon Qt and the software became worthless, Qt really wouldn’t have any buffer to soften the blow. For example, Stora has forestland on its balance sheet, and by selling it, it’s possible to buy more time if the business is making a loss. As far as I understand, Qt doesn’t have forestland on its balance sheet or anything similar.

I took a look at the balance sheet and the net tangible value is in the negative. (source: Yahoo Finance) Based on general experience, this is a fairly big red flag, even if it is a software company or something along those lines. I most politely urge great caution. I don’t want to spoil the enthusiasm; I’m just bringing one perspective to the table.

Luttelo, once again an excellent thread. Your insights are very useful for all of us. Keep up the good work! What other acquisitions would make sense for QT to further strengthen its vertical integration?

Yes, exactly. This is the other side of the coin. A developer faces a clear crossroads when considering the technical backbone of a project/product. Do they build the certification chain on top of a ready-made solution, paying continuously for tools (examples like IAR and QNX, I’ll compare this connection later) and guaranteed quality, thereby saving time and money on the certification process itself and potentially simplifying and speeding up technical development? Or do they build it themselves on top of open source without tool costs, but paying for it later in time and man-hours? In my opinion, there isn’t one right solution to this. It depends heavily on the developer’s resources, priorities, and competence. If a short time-to-market is desired and the product/company’s value creation lies elsewhere, a ready-made tool is advantageous. Conversely, for another firm that already has the expertise and where maintaining the certification chain is part of the business, it might not be. Technically, both options are perfectly valid. The question then becomes the project structure, production risks, and their management. I have personally seen both types of projects. As an example, I have seen an ISO26262 GCC project from recent years using a frozen GCC8 (the last GCC8 release from 2018). It’s a nearly decade-old toolchain and they aren’t even in production yet. What this means technically in practice is that -O2 and -O3 flags can be forgotten immediately in the majority of applications. Especially the closer you get to ASIL D class. Additionally, certification often requires external tools for which licenses must be paid. Perhaps the biggest unknown problem beforehand is if a CVE is found in glibc or libstd that needs to be patched. Then you are in a very unpleasant place regarding technical compliance. In the automotive sector, different maintenance requirements apply compared to consumer electronics and other “lighter” software. Regulators demand roughly the same from software as from mechanical parts. After car production ends, security updates must be provided (in most market areas) for 15 years. If you are already entering production with a nearly decade-old toolchain and the product needs to be supported for another 15 years and more, an IAR-style turnkey solution starts to look quite attractive. I’ll pick on QNX, which is unrelated to Qt but close, and compare it to IAR’s licensing model. Both products have a list price, but customers often have their own pricing depending on their relationship with the firm. Per seat QNX and IAR both offer a per-seat licensing model during development. Both also offer fixed and floating licenses with nuanced differences. As a rule of thumb, in both cases, the cost per developer seat is approximately €1k/month. Over €10k/year, interpolating from there based on team size. As has been discussed on this forum before, IAR is transitioning toward a monthly subscription-type model. In this model, the per-seat approach is broken down with a floating and scalable license pool. The same licensing model would be used by both developers and the CI pipeline. Per production To my knowledge, IAR does not charge a per-product fee in any form. QNX does. And this can be quite high. Tens of euros in the automotive sector. What I wrote in that long previous message, but didn’t emphasize enough in my opinion, is that the vertical integration of Nordic Semi and Qt (and similar companies) is something I really like. Following in the footsteps of Buffett and Musk, I strongly identify with the concept. Historically, highly vertically integrated companies have dominated their industries. Blatant examples include the Rockefellers and US Steel, which led to anti-trust laws on the other side of the Atlantic. In the technology sector, vertical integration is key to the success stories of Alphabet/Meta/MS/etc.

Some serious business in this thread. But let’s cut a few corners while writing on mobile. The company seems to be generating better revenue than ever before. And by many metrics, it’s cheaper than… ever? Are the negative drivers:  Concern about the lack of stickiness in QT products? AI replacing all software? The customer base using the products is in a tight spot because the consumer is in a tight spot, etc.? General uncertainty at the moment due to global politics?  Based on the numbers, I don’t see the firm going bankrupt anytime soon or the product being a legacy carcass going out of fashion with no demand? (I don’t know enough about the product). When you notice a rookie selling their shares after a long decline, your own interest inevitably piques

Regarding GCC and ISO26262, this might have been the case at some point, but as I see it, the situation is currently moving in the opposite direction. GCC can be certified as ISO26262-compliant by running a test suite on it and demonstrating that it functions correctly. In my view, major players are doing this more and more, and AI is making that certification process even easier. Furthermore, once the certification is done once, the same test suite is easy to reuse in new projects. In practice, in the projects I’ve seen, the GCC version is locked at the start of the project along with the hardware, the tests are performed to demonstrate ISO26262 compliance, and the compiler is not updated to a new version during the project without a particularly compelling reason. Even before Qt’s acquisition of IAR, I saw IAR as a company that customers are fleeing as best they can, and which is trying to squeeze the last bits of revenue out of its customers with its aging technology. Similar examples, in my opinion, include Perforce, which charges a shocking price for its QAC tools; in practice, you can use AI to modify code style to match an example file that follows, for instance, the CERT C style, allowing you to get by with significantly fewer expensive QAC licenses. For me, the IAR deal served as a sell signal, and whether I was right or not, I’m happy I decided to get rid of all my shares then, regardless of whether it was for the right or wrong reason.

If anyone wants more than just a screenshot of the article headline, here is a link to the paywalled article:                   Tärkeimmät talousuutiset | Kauppalehti – 9 Mar 26              Qt Groupin osake romahti alelaariin – Näitä asioita pohjaonkijan kannattaa...    Entinen pörssitähti Qt Group on romahtanut kasvusta arvolaariin. Vaikka luottamuspula ja lyhyeksimyynti painavat kurssia, yhtiön skaalautuva ydinbisnes ja IAR-kauppa pitävät käänteen mahdollisuuden yhä avoinna.                             A pretty good summary of the company’s situation, but nothing extraordinary or new.  A few highlights from behind the paywall:  7.9% of shares are shorted, and the actual figure is higher outside the official statistics CFO Lintunen’s departure in the middle of the IAR integration increased uncertainty After the IAR acquisition, they can move deeper from user interfaces into microcontrollers, providing a larger package and potentially cross-selling The stock may have already capitulated to the bottom, and for example, positive news could trigger a short squeeze upwards

Qt Group

Qt’s operational performance continues as strong, the outlook is good, and the company progresses in line with its strategy in expanding to new areas. The share’s valuation is still tight, and...

<p>Qt’s operational performance continues as strong, the outlook is good, and the company progresses in line with its strategy in expanding to new areas. The share’s valuation is still tight, and we see no room to stretch the multiples, but if the strong performance continues as we predict time will adjust the valuation.</p> 

	2020	21e	22e
Revenue	79.4	113.5	149.0
growth-%	36.1 %	42.9 %	31.2 %
EBIT (adj.)	17.0	25.9	49.4
EBIT-% (adj.)	21.4 %	22.8 %	33.1 %
EPS (adj.)	0.53	0.86	1.55
Dividend	0.00	0.51	0.55
Dividend %	0.0 %	2.6 %	2.8 %
P/E (adj.)	108.8	22.6	12.5
EV/EBITDA	70.7	15.9	8.6

Qt: Tolerance level of valuation tested

Key Estimate Figures2021-04-23

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