Addnode Group and two other Swedish stocks valued below their value

While global markets are going through a period of cautious optimism and political uncertainty in Europe, the Swedish stock market offers unique opportunities for investors seeking value. In this context, identifying undervalued stocks like Addnode Group is crucial, especially when market conditions point to potentially undervalued assets amid broader economic fluctuations.

The 10 most undervalued stocks in Sweden based on cash flow

Click here to see the full list of 46 stocks from our Undervalued Swedish Stocks Based on Cash Flows screener.

Here’s a look at some of the choices from the screener

Overview: Addnode Group AB provides software and services for design, engineering, product data information, project collaboration and facility management in Sweden, the Nordics, the US, the UK, Germany and other international markets with a market capitalization of SEK 16.68 billion.

Operations: The company generates its revenue in three main segments: Design Management (SEK 4.70 billion), Product Lifecycle Management (SEK 1.91 billion) and Process Management, including Content Management (SEK 1.29 billion).

Estimated discount to fair value: 12.3%

Addnode Group’s price of SEK 125.1 is below the estimated fair value of SEK 142.59, reflecting a potential undervaluation based on cash flows. Despite this, profit margins have fallen from 5.5% to 3.8% over the past year, indicating some operational challenges. However, with profits expected to grow by a respectable 21.37% annually and revenues outpacing the Swedish market growth rate (8.8% vs. 1.7%), Addnode promises to improve and grow its financial performance.

Overview: RaySearch Laboratories AB, a medical technology company based in Sweden, specializes in developing software solutions for cancer treatment in various regions worldwide and has a market capitalization of approximately SEK 4.90 billion.

Operations: The company generates SEK 1.05 billion from its healthcare software division.

Estimated discount to fair value: 49.1%

RaySearch Laboratories trades at SEK 143, well below its fair value of SEK 281.06, suggesting an undervaluation based on discounted cash flows. With a remarkable past earnings growth of 356.9% and a forecast annual earnings growth of 33.62%, it is significantly exceeding the Swedish market’s expectations. Recent product launches such as RayStation® 2024B improve clinical workflow efficiency and could boost future revenue streams, although current revenue growth forecasts are modest at 10.6% annually.

Overview: Sweco AB (publ) provides architectural and engineering consulting services worldwide and has a market capitalization of approximately SEK 53.47 billion.

Operations: Sweco’s sales are segmented by region: Sweden generates SEK 8.52 billion, Belgium SEK 3.92 billion, Norway SEK 3.39 billion, Finland SEK 3.67 billion, Denmark SEK 2.98 billion, the Netherlands SEK 2.89 billion, Germany and Central Europe SEK 2.62 billion and the United Kingdom SEK 1.46 billion.

Estimated discount to fair value: 30.9%

Sweco is trading at SEK 149 below its calculated fair value of SEK 215.65, indicating significant undervaluation. While Sweco’s revenue growth forecast of 5.3% per year exceeds the Swedish market average, its earnings growth forecast of 16.4% per year also exceeds local market trends. Recently, Sweco has expanded its role in sustainable energy by partnering with VoltH2 for a new green hydrogen plant in the Netherlands, underscoring its strategic focus on environmentally significant projects despite an unstable dividend history.

Turning ideas into action

Curious about other options?

This Simply Wall St article is of a general nature. We comment based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

Do you have feedback on this article? Are you interested in the content? Contact us directly. Alternatively, send an email to [email protected]