Translation: Original published in Finnish on 10/26/2026 at 08:41 am EET

We initiate coverage of Reaktor with an Accumulate recommendation and a target price of EUR 8.3. The IT service and technology company Reaktor went public in the early summer and, at the same time, raised funds for investments. The company's key competitive advantage is built around excellent expertise and culture. The business model is interesting and includes more mature and stable operations, a more scalable Software Product business, and VC fund-type operations, all of which have synergies with one another. This is how the company differs in several ways from many sector peers. We expect solid performance in the sector context during the strategy period, but our estimates are still  below the company's targets. The stock's valuation picture is at least attractive from several perspectives, but the Software Product business, which is still in its early stages, restrains the strongest buying enthusiasm.

A different and interesting business model built around exceptional expertise

Reaktor's key competitive advantage is built around the expertise and culture of the company's outstanding employees. The company has three businesses with clear synergies. The Technology Solutions business is the core of it all, the most mature and largest business, which is built around strong expertise across eight industries. The Software Product business, which is based on core expertise, is the newest, although expertise has already been developed for This business has the greatest growth and margin potential, but the company's track record is still thin. We believe the Reaktor Ecosystem venture business is a very interesting VC/PE-type fund with a strong track record and an excellent foundation for further value creation.

During the strategy period, evidence of the competitiveness and development of the Software Product business is sought

Reaktor aims to transition from a consulting-driven company into a diversified technology group where the high-margin Software Product business grows alongside the stable Technology Solutions business. The company has numerous growth drivers, and Reaktor is seeking its strongest growth in the Software Product business, which holds strong scaling potential. Financial targets are business-specific and ambitious. Our estimates are below the target levels and, in our view, require further evidence and support from a better market environment to materialize.

Considering the sector and the Rule of 20 context, we expect Reaktor to deliver excellent performance in the coming years

We expect Reaktor to grow strongly this year (15%) and profitability to be in the top tier of the sector (adj. EBIT-% 13%). In the coming years, we expect growth to slow down slightly and profitability to remain strong. Thus, we expect Reaktor to be at an excellent level of 20 in the sector context during the strategy period, measured by our Rule of 20 (organic growth % + EBITA %). Following the IPO, the company also raised funds, and this, combined with strong cash flow and debt leverage, should enable "organic" investments and/or acquisitions representing over 100 MEUR in revenue during the strategy period. Reaktor's key risks are related to the dilution of its exceptional expertise and employer brand in one way or another, as well as the AI disruption risk.

We find the stock's valuation attractive at the least

In terms of its investment profile, Reaktor is an earnings grower. Based on the valuation methods we apply (2026e valuation multiples P/E 11x and EV/EBIT 7x, relative valuation ~30% below peers, sum of the parts EUR 8.9, DCF model EUR 9.2, return expectation ~15%, as well as EV/S multiple and the Rule of 20 EUR 8), the fair value range for the share is EUR 8-9.5. Due to the large earnings impact of the Software Product business and still thin evidence of competitiveness, we apply the lower end of the range. In our view, the market is currently primarily pricing the Technology Solutions business and the Ecosystem business, whereas the potential earnings of the Software Product business come at half price at the current share price. In our view, the clear drivers that will unwind this undervaluation are continued evidence of the development of the Software Product business.