W5 Solutions publ AB

W5 Solutions has a market capitalization of 865.67 million SEK and a price-to-book ratio of 2.75, indicating a premium valuation relative to its book value. The company's liquidity position is characterized by a current ratio of 2.06, suggesting it can cover its short-term obligations, but its operating cash flow is negative at -23.53 million SEK, signaling potential cash flow constraints. Free cash flow is modest at 0.70 million SEK, and capital expenditures are -2.06 million SEK, indicating some investment in long-term assets.

Profitability metrics are weak, with a return on equity of -1.68% and a return on assets of -1.01%, both significantly below industry norms. The company reported a net loss of 5.28 million SEK and an operating loss of 1.48 million SEK, highlighting its current unprofitability. Gross profit of 40.79 million SEK is a positive sign, but it is insufficient to offset operating expenses.

The company's revenue is concentrated in a single disclosed segment, with no geographic breakdown provided in the latest financial data. This lack of diversification could pose a risk if demand in the aerospace and defense software market fluctuates. Competitors include major players like Microsoft, Salesforce, and ServiceNow, which may exert competitive pressure on W5 Solutions' market share.

Looking ahead, the company is expected to face challenges in improving its financial performance. Analysts have set a mean price target of 84.50 SEK, implying a potential upside of 71.2% from the current market price of 49.3 SEK. However, the mean recommendation of 2.00 suggests a cautious outlook, with only one "buy" rating and no "strong buy" ratings. The company's operating income and net income are both negative, and there is no indication of a near-term turnaround.

Risk factors include liquidity concerns, as the company has negative net cash after subtracting total debt. The debt-to-equity ratio of 0.24 is relatively low, but the negative operating cash flow raises concerns about the company's ability to service its debt. There is a low probability of dilution in the near term, but the company's financial performance and capital structure could change if it needs to raise additional funds.

Recent events and filings do not indicate any major changes in the company's strategic direction or financial structure. The company continues to operate in a competitive market with limited visibility on future revenue growth.

Analysts project 74.8% upside to a mean price target of 84.5 SEK, signaling strong market confidence in future performance.

Cash conversion of 4.46 ranks as best-in-class among 789 software peers, indicating superior efficiency in generating cash from operations.

Debt-to-equity ratio of 0.24 is below the cohort median of 0.05, suggesting higher leverage than typical software companies.

Revenue kr 215.0M; Operating income kr 47.6M.

• ▍Revenue kr 215.0M
• ▍Operating income kr 47.6M
• ▍Net margin 14.9%

Revenue kr 81.0M, +21,2% YoY; Operating income +108,3% YoY.

• ▍Revenue kr 81.0M, +21,2% YoY
• ▍Operating income +108,3% YoY
• ▍Net income +82,9% YoY
• ▍Free cash flow +76,7% YoY
• ▍Net margin -3.1%

Revenue kr 111.1M, +13,7% YoY; Operating income +37,6% YoY.

• ▍Revenue kr 111.1M, +13,7% YoY
• ▍Operating income +37,6% YoY
• ▍Net income +1,4% YoY
• ▍Free cash flow −818,3% YoY
• ▍Net margin -9.4%

Revenue kr 84.5M, −9,5% YoY; Operating income −110,3% YoY.

• ▍Revenue kr 84.5M, −9,5% YoY
• ▍Operating income −110,3% YoY
• ▍Net income +18,6% YoY
• ▍Free cash flow −1 220,4% YoY
• ▍Net margin -5.1%

Revenue kr 66.8M; Operating income -kr 15.4M.

• ▍Revenue kr 66.8M
• ▍Operating income -kr 15.4M
• ▍Net margin -22.1%

Revenue kr 97.7M; Operating income -kr 12.8M.

• ▍Revenue kr 97.7M
• ▍Operating income -kr 12.8M
• ▍Net margin -10.9%

Revenue kr 93.4M; Operating income -kr 1.5M.

• ▍Revenue kr 93.4M
• ▍Operating income -kr 1.5M
• ▍Net margin -5.7%

Revenue kr 491.6M, +26,8% YoY; Operating income +700,8% YoY.

• ▍Revenue kr 491.6M, +26,8% YoY
• ▍Operating income +700,8% YoY
• ▍Net income +178,2% YoY
• ▍Net margin 3.0%

Revenue kr 387.7M, −1,6% YoY; Operating income −143,6% YoY.

• ▍Revenue kr 387.7M, −1,6% YoY
• ▍Operating income −143,6% YoY
• ▍Net income −330,0% YoY
• ▍Free cash flow −78,2% YoY
• ▍Net margin -4.8%

Revenue kr 393.9M, +123,8% YoY; Operating income −17,9% YoY.

• ▍Revenue kr 393.9M, +123,8% YoY
• ▍Operating income −17,9% YoY
• ▍Net income −40,4% YoY
• ▍Free cash flow +238,2% YoY
• ▍Net margin 2.1%

Revenue kr 176.0M, +31,6% YoY; Operating income +12,3% YoY.

• ▍Revenue kr 176.0M, +31,6% YoY
• ▍Operating income +12,3% YoY
• ▍Net income +2,2% YoY
• ▍Free cash flow −23,7% YoY
• ▍Net margin 7.8%