Sitowise’s Q1 results were mixed, with revenue in line with expectations but underlying profitability slightly below. In our view, the still weak profitability reflects the criticality of revenue growth, which is also a necessity for strengthening cash flow and thus the financial position. Relative to the low near-term earnings level, the valuation of the stock is elevated, which together with the financial position constitutes a weak risk/reward ratio in our view. Therefore, we reiterate our Reduce recommendation and revise our target price to EUR 2.40 (previously EUR 2.50), mainly due to lower estimates.

Sitowise reported weaker-than-expected Q1 results. The company’s revenue was in line with our expectations, but earnings fell well below our forecast due to weak market conditions, a tight pricing environment, and a low utilization rate.

Sitowise will report its Q1 results on Tuesday, May 13th, 2025. We expect revenue to have declined due to the weak market conditions and one fewer working day. Furthermore, while we anticipate that earnings will decrease with declining revenue, operational adjustments made in response to the current challenging environment should help support profitability somewhat.

For Sitowise, 2024 was well below expectations and the outlook for 2025 is for another weak year in terms of results. The profitability challenges in the Buildings and Swedish businesses will continue for the time being, and a turnaround will require not only improved operational performance but also market traction. Given the risks to the business and the uncertain turnaround, we do not see the stock's risk/reward ratio as attractive now.

Sitowise reported a much weaker than expected Q4 report on Wednesday. The company's revenue declined almost in line with expectations, but profitability was well below our expectations due to low utilization rate and challenges in the businesses.