Sales growth of 8% in Q3e on a broader customer base * We trim adj. EBIT by ~2% for ‘26e-‘28e * EV/adj. EBIT of 8.5x ‘27e, ~55% below peers
ANNONS
Growth on a broader base
Generic reports Q3 on 12 November, and we estimate sales of SEK 49m, up 8% y-o-y, on easy comps. Q3 is a seasonally uneven quarter, with activity concentrated outside July, when offices are closed and fewer messages are sent. Operator solutions (Minicall) also carry a traffic-linked element which tends to be quieter over the summer. We think the product mix keeps working in Generic’s favour, as e-health and public sector customers are less sensitive to the economic cycle than logistics. We estimate a gross margin of 44% and adj. EBIT of SEK 10m, for a margin of 20% (23% in Q3'25).
Costs in order to grow
We keep sales broadly unchanged and lower adj. EBIT by ~2% for ‘26e-‘28e. As we have said before, we think Generic will need to carry higher costs in order to grow, and continue to see 2026 as an investment year rather than one of margin expansion. For '26e, we estimate sales of SEK 200m, up 9%, and adj. EBIT of SEK 41m, for a margin of 20%. For ‘27e, we estimate 11% growth to SEK 223m and an adj. EBIT margin of 21%, as cost growth should moderate.
Trading at an EV/adj. EBIT of 8.5x for '27e
The share trades at 8.5x EV/adj. EBIT on ‘27e, ~55% below CPaaS peers, on consensus forecasts, with a net cash position and over SEK 8m of sales per employee. With a growing share of sales and a higher margin subscription model, DOCS is in over 30% of Swedish municipalities and is broadening into regions, authorities and private companies, which should lift recurring revenue and gross margins. Key to watch in the report are the gross margin and DOCS customer additions, as they indicate whether the shift towards subscription sales is continuing.
