Vaisala - Ends the year on a high note
Vaisala’s Q4 turned out to be very strong as the operating result was higher than the company previously estimated for both W&E and IM due to higher than estimated sales in both and successful group-wide cost control. We see multiple positive drivers for the company also going forward and expect a leap in the profitable growth journey in 2025.
Robust performance across the line
Vaisala unaudited preliminary operating result for FY 2024 was EUR 83m and net sales were EUR 565m. Previously, the company estimated EBIT to be in the range of EUR 68-78m and net sales in the range of EUR 540-570m. According to the preliminary figures, the company’s net sales grew some 14% y/y in the quarter. Both segments grew at considerably faster rate and with higher profitability than we had expected as we previously forecasted net sales of EUR 554m and EBIT of EUR 72m. The recovery in the industrial measurements market has clearly continued at a faster pace than we previously expected during Q4. W&E has also developed well with some additional boost from the acquisitions.
Multiple positive drivers for both IM & W&E going forward
We see that Vaisala is in a great spot to take the next leap in its profitable growth journey during 2025E. We have also increased our estimates for the coming years. We now model stronger growth in 2025 for IM as the demand is clearly picking up after many quarters of slower growth. While we model both higher growth and profitability for IM, we see also improvement for W&E going forward. Key drivers for W&E include improving profitability in its legacy business, rising renewable product sales, and expansion in SaaS/DaaS, helped by the recent acquisitions, with a goal to achieve profitability in the current strategy period. We expect that these drivers will improve the segments EBITA-margin already in 2025E (reported EBIT will be negatively affected by increased PPA amortization). We now forecast group level net sales of EUR 638m with EBITA of EUR 105m leading to margin of 16.5% for 2025E.
BUY (prev. HOLD) with a TP of EUR 56 (EUR 49)
Vaisala trades at 17-15x adj. EV/EBIT and 22-20x adj. P/E based on our estimates for 2025-2026E. After significant positive estimate adjustments, we increase our TP to EUR 56, new target implies adj. EV/EBIT of 19-17x on our estimates for 2025-2026E, which we see as a fairly neutral level compared to the company’s historical valuation multiples and the peer group. Our DCF points towards fair value of EUR 56 per share.