Equity research Enrad, Q4 2025: A Sweden push to accelerate growth

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Enrad’s FY2025 net sales of MSEK 55.9 grew 29.6% YoY but fell approximately 7% short of our estimate. A sluggish market is not stopping Enrad. Instead, the company has appointed a sales manager and another salesperson to intensify the sales activities in Sweden. We expect this initiative to start impacting sales in H2 2026.  

A soft close to 2025 on a sluggish market

FY2025 net sales of SEK 55.9m grew 29.6% YoY but missed our SEK 59.9m estimate by roughly 7%. Gross margin of 52.1% printed 2.2 p.p. above our 49.9% forecast. Despite the margin beat, EBIT of SEK -7.8m came in weaker than our SEK -5.3m estimate, driven by the Q4 2025 revenue shortfall. Full-year EPS landed at SEK -0.31 versus our SEK -0.02 estimate. The cash position at year-end stood at SEK 19.6m. With continued ability to borrow against customer invoices and inventory, the board’s assessment is that no capital raise is likely to be required in 2026.

Increased sales activities in Sweden

The lion’s share of growth came from Sweden, despite limited domestic sales efforts. The home market has clearly been underexplored. Appointing a dedicated Sales Manager for Sweden should strengthen the pipeline, deepen customer relationships, and support the onboarding of an additional salesperson joining in March. The move signals a clear intent to fully unlock the domestic opportunity. We expect the increased sales activity to start feeding through in H2 2026, while the push into the Netherlands and Belgium may yield a somewhat delayed effect relative to our previous assumptions.

Regarding production capacity and operational leverage, Enrad can already manufacture north of SEK 80m from the existing facility. The relocation to a new production site (first flagged in the Q4 2024 report) lifts capacity to above SEK 100m with no incremental headcount. Management noted in the Q4 report that most capex ahead of the move is already in place, suggesting the transition is near-term. This is a capital-efficient setup: incremental revenue up to SEK 100m should flow through with limited additional OPEX pressure, providing meaningful operating leverage as volumes ramp.

Revised valuation

We have cut our net sales estimates for 2026–28E by ~17% on average, reflecting sluggish market conditions and limited visibility on when demand will meaningfully take off, leading to lower profitability in the mid-term. Despite the estimate cuts, we raise our fair value to SEK 11.5 (9.0). The revision is driven by a shift in valuation approach: We now place greater weight on the DCF to better capture long-term potential, which more than offsets the lower topline and profitability assumptions. Our fair value implies EV/Sales 2027E of 2.4x and EV/EBIT 2028E of 16.2x. The peer group currently trades at a median EV/Sales NTM of 2.3x and EV/EBIT NTM of 18.7x.

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