Waystream Group AB (publ)

Waystream maintains a conservative capital structure with a debt-to-equity ratio of 0.26 and a current ratio of 1.94, indicating strong short-term liquidity. Free cash flow of 2.79 million SEK supports operational flexibility, though net cash is negative after subtracting total debt. The company's return on equity of 1.56% and return on assets of 0.8% lag behind typical performance metrics for the Communications Equipment industry, suggesting underutilization of capital resources.

Profitability metrics reveal a gross margin of 52.3% (18.92 million SEK gross profit on 36.20 million SEK revenue) but a much narrower operating margin of 4.8% (1.74 million SEK operating income). This compression indicates rising operating costs relative to revenue, a concern for long-term margin sustainability in a competitive industry. Net income of 1.04 million SEK reflects a 2.9% net margin, below the industry median for Communications Equipment firms.

The company operates as a single-segment business with 100% revenue concentration in its core software-defined networking solutions. Geographic exposure is not disclosed in the latest financials, but the company is headquartered in Sweden and primarily serves European telecommunications providers. This concentration creates both upside potential and downside risk in a sector sensitive to regional regulatory changes.

Revenue growth has been volatile, with the most recent reported revenue of 36.20 million SEK representing a 164% increase from the prior year's 13.69 million SEK. Analysts project 2024 revenue of 165 million SEK, implying a 357% year-over-year growth rate. While this trajectory is aggressive, it aligns with the company's stated strategy to expand its 5G infrastructure offerings. Earnings estimates show a more moderate 33% growth in EPS to 1.69 SEK from 1.27 SEK.

Risk factors include medium liquidity risk due to negative net cash and low dilution risk with no difference between basic and diluted shares outstanding. The company has not disclosed any recent capital raising activities or share buyback programs. Analyst price targets range from 53.00 to 65.00 SEK, with a mean of 59.00 SEK, suggesting a 47% upside from the current market price.

Recent filings show Waystream has maintained a consistent capital structure with no material changes in long-term debt or equity issuance in the past year. Earnings calls emphasize R&D investment in 5G and edge computing solutions, though no specific R&D budget percentages are disclosed. The company's focus on software-defined infrastructure positions it to benefit from the ongoing 5G rollout in Europe.

Analysts project 38.5% upside to a mean price target of 59.0 SEK, significantly above the current market price of 42.6 SEK.

Cash conversion of 8.85 is rated best-in-class, vastly exceeding the 0.76 median among 302 cohort peers.

The company faces high credit risk, signaling potential difficulties in debt servicing or default probability.

Medium liquidity risk suggests potential challenges in meeting short-term financial obligations or trading constraints.

Net income CAGR of -8.6% over four years indicates a long-term decline in profitability despite recent recovery.

Debt-to-equity ratio of 0.26 is higher than the 0.22 cohort median, indicating relatively higher leverage.

Free cash flow turned negative in 2024 and 2025, showing volatility in cash generation capabilities.

Revenue kr 36.2M, −14,1% YoY; Operating income −97,0% YoY.

• ▍Revenue kr 36.2M, −14,1% YoY
• ▍Operating income −97,0% YoY
• ▍Net income −104,1% YoY
• ▍Free cash flow −65,6% YoY
• ▍Net margin -0.5%

Revenue kr 37.6M, +56,4% YoY; Operating income +117,5% YoY.

• ▍Revenue kr 37.6M, +56,4% YoY
• ▍Operating income +117,5% YoY
• ▍Net income +110,0% YoY
• ▍Free cash flow +142,7% YoY
• ▍Net margin 2.3%

Revenue kr 33.6M, +20,6% YoY; Operating income +204,6% YoY.

• ▍Revenue kr 33.6M, +20,6% YoY
• ▍Operating income +204,6% YoY
• ▍Net income +196,2% YoY
• ▍Free cash flow +601,9% YoY
• ▍Net margin 6.5%

Revenue kr 39.1M, +7,9% YoY; Operating income +147,5% YoY.

• ▍Revenue kr 39.1M, +7,9% YoY
• ▍Operating income +147,5% YoY
• ▍Net income +207,4% YoY
• ▍Free cash flow +89,8% YoY
• ▍Net margin 8.2%

Revenue kr 42.1M; Operating income kr 5.4M.

• ▍Revenue kr 42.1M
• ▍Operating income kr 5.4M
• ▍Net margin 9.6%

Revenue kr 152.4M, +20,6% YoY; Operating income +216,0% YoY.

• ▍Revenue kr 152.4M, +20,6% YoY
• ▍Operating income +216,0% YoY
• ▍Net income +187,3% YoY
• ▍Free cash flow +119,1% YoY
• ▍Net margin 6.8%

Revenue kr 126.3M, +13,6% YoY; Operating income −140,5% YoY.

• ▍Revenue kr 126.3M, +13,6% YoY
• ▍Operating income −140,5% YoY
• ▍Net income −145,0% YoY
• ▍Free cash flow −7,1% YoY
• ▍Net margin -9.3%

Revenue kr 111.2M, −25,5% YoY; Operating income −119,4% YoY.

• ▍Revenue kr 111.2M, −25,5% YoY
• ▍Operating income −119,4% YoY
• ▍Net income −123,4% YoY
• ▍Free cash flow −185,4% YoY
• ▍Net margin -4.3%

Revenue kr 149.3M, +49,7% YoY; Operating income +38,8% YoY.

• ▍Revenue kr 149.3M, +49,7% YoY
• ▍Operating income +38,8% YoY
• ▍Net income +39,2% YoY
• ▍Free cash flow +58,1% YoY
• ▍Net margin 13.8%

Revenue kr 99.7M; Operating income kr 18.9M.

• ▍Revenue kr 99.7M
• ▍Operating income kr 18.9M
• ▍Net margin 14.8%