Tommi and Antti have prepared a comprehensive report on EcoUp, which, like other comprehensive reports, is available for everyone to read.
We reiterate our ‘add’ recommendation for EcoUp and our target price of 2.5 euros. EcoUp consists of Insulation and Technology business segments, which operate in the construction value chain. In the short term, the market turnaround in small-house construction will accelerate the growth of the Insulation business, and in the long term, both business segments are supported by circular economy and sustainable construction trends. The profitability improvement in the coming years makes the return-risk ratio attractive for a year out, even though the stock is neutrally valued in the short term.
Quoted from the report:
We forecast EcoUp’s revenue to grow by approximately 3–8% p.a. in 2028–2032, with an emphasis on the Technology business. Our terminal growth forecast is at the long-term growth assumption level of Finland’s and Europe’s GDP, at 2.0%. Due to the very weak predictability of the Technology business, the uncertainty associated with long-term forecasts is high, as the share of the Technology business in the group’s revenue increases over time in our forecasts. Thus, even significant forecast changes are possible in the longer term, as visibility into the commercialization of technology and the expected growth rate begins to clarify during the strategy period ending in 2026.
Mikael and Tommi discussed EcoUp on the back of a comprehensive report.
Topics:
00:00 Introduction
00:27 Insulation business at the core of everything
02:24 High sales margins
02:48 Customer base
04:01 Seasonality of business
04:44 Technology business
07:12 Financial situation
08:13 Acquisition in Sweden
09:12 Improvement in small-scale housing construction as the key driver
12:04 Risks
14:45 Valuation
Tommi and Antti have prepared a new company report following yesterday’s EcoUp announcement.
EcoUp announced yesterday that it had sold Uudenmaan Imupalvelu Oy (UIP), which belonged to the group and offers high-power vacuuming and blowing services, as a result of which the guidance for the current year was lowered. We removed UIP from EcoUp’s forecasts and also made negative revisions to our forecasts as the guidance remained weaker than we expected. We expect the strengthening of profitability, supported by a cyclical upturn, to begin next year. The return expectation based on profitability improvement now remains insufficient, in our assessment. We are lowering our target price to 2.3 euros due to the forecast changes and lowering our recommendation to Reduce (previously Add).
The view was updated in connection with the forecast. Regarding new single-family house construction, Q2 appears to have fallen short of expectations based on the Pientaloteollisuus ry (Finnish Association of House Manufacturers) business cycle review (which had not yet been published on their website, but should be found there soon). According to Statistics Finland, single-family house construction starts for the beginning of the year are roughly at the previous year’s level, which is a weaker figure than expected.
However, Statistics Finland’s building permits and the order backlog of PTT ry’s member companies indicate growth for the current year from a low level.
If H1 materializes as per our expectations, achieving the EBITDA guidance for the rest of the year will require a better EBITDA for the latter half of the year compared to the reference period. In my opinion, that seems like a rather demanding goal, as a profitable business (Imupalvelu) has been replaced by the Swedish Isoleringslandslaget, which is aiming for a profitability turnaround. The softness of the business environment and the negative risk for the end of the year kept us cautious at this stage. However, as single-family house construction recovers towards its long-term average, the Insulation business has the potential for clear earnings growth, which makes the investment story interesting over a longer time horizon.
However, the stock price dropped -5.5%; in low-volume trading, strong reactions often occur. Perhaps such small fires are business as usual from time to time, and that’s why they have such swift in-house action when a fire occurs.
EcoUp issued the following negative profit warning:
EcoUp Oyj | Inside Information | 14.08.2025 at 23:38:00 EEST
EcoUp lowers its EBITDA guidance due to lower expectations for Insulation Business volume in the remainder of 2025 and the Group’s weaker-than-expected financial performance in January-June 2025.
Financial guidance for 2025:
New guidance: EcoUp estimates that its 2025 revenue will be approximately at the same level as in 2024, and its EBITDA will decrease from 2024.
Previous guidance (issued on 3.6.2025): EcoUp estimated that its 2025 revenue and EBITDA would be approximately at the same level as in 2024.
In 2024, revenue was EUR 30.7 million and EBITDA was EUR 2.8 million.
Reasons for the change in guidance:
The new construction market in Finland has seen a positive turn, but it is progressing slower than expected earlier in the year. The volume of business related to the Small House Renovation concept is also expected to be lower than anticipated in 2025. Due to the aforementioned reasons, we have lowered our forecast for the volume development of the Insulation Business in the remainder of 2025.
EcoUp’s EBITDA in January-June 2025 is weaker than in the corresponding period last year. The decrease in EBITDA has been particularly affected by weak profitability in EcoUp’s Swedish operations and in Uudenmaan Imupalvelu Oy, which was sold in June 2025.
EcoUp Oyj will publish its half-year report for January-June 2025 on Tuesday, August 19, 2025, at 13:00. EcoUp will not comment on the first half-year results before the publication of its half-year report.
Here are also Viljakaise’s comments on the negative profit warning.
The decrease in EcoUp’s operating profit guidance was not a complete surprise to us, but due to the negative comments regarding volumes, our preliminary assessment indicates that there are still downward pressures on the company’s revenue and earnings forecasts. We will update our view on EcoUp after the H1 results are published next Tuesday.
EcoUp’s early year was full of corporate restructurings, and the company is not satisfied with the reported profitability. The company commented that it expects results to improve significantly in the seasonally stronger second half of the year. CEO Matti Kaski commented in an interview with analyst Tommi Saarinen.
Topics:
00:00 Introduction
00:15 Divestment from Uudenmaa Imupalvelu
03:19 Operations in Sweden
05:21 Business development
05:44 Technology business
06:31 Belief in a turnaround in small house construction
07:51 Measures for the rest of the year
08:54 Achieving goals
11:19 Market activity
Tommi and Antti have prepared a new company report on EcoUp after the Q2 releases.
EcoUp’s H1 report was weaker than our expectations, which was not a big surprise after last week’s profit warning. Our current year forecasts clearly decreased due to a weaker H1 than our expectations and our forecast calculations for H2. As small-scale housing construction activity rises from its current very low level, EcoUp has the potential for a clear earnings jump, but market growth is still pending. Due to forecast changes, we lower our target price to 1.70 euros (previously 1.90 €) and reiterate our reduce recommendation.
Quoted from the report:
In our opinion, the stock, priced at the lower end of the range, is fundamentally quite attractively valued relative to its medium-term earnings potential, as we see growth potential in the operating profit in the coming years, which is currently weighed down by the bottom of the construction cycle. The market’s weaker-than-expected development in Q2, the targeted profitability turnaround in the Swedish subsidiary, and high uncertainties related to the Technology Business keep the short-term risk level high. For the current year, the sluggish market development also slightly increases the likelihood of a slower recovery in construction, which means achieving the earnings potential might take longer than expected. With current forecasts, the group’s valuation multiples are not particularly low even with our next year’s forecasts (P/E 18x, EV/EBIT 17x, EV/EBITDA 4x).
Jari Isometsä, 56, a multiple medalist in cross-country skiing, was dismissed from his position as key account manager at the publicly listed company Ecoup last year. In July, Isometsä filed a summons application against Ecoup with the Oulu District Court.
He is not disputing his dismissal, but rather accusing his former employer of neglecting its obligation to offer other work.
Now Ecoup has submitted its response to the District Court. The publicly listed company is on a completely different page from the former ski star.
Here are Tommi’s preliminary comments as EcoUp publishes its Q3 results next Wednesday.
We expect the corporate restructuring to have weighed down both revenue and EBITDA. On the other hand, we expect the profitability turnaround of the Swedish subsidiary to have progressed, as the Swedish small-house construction market has started to recover from its lows. Despite the weak profitability level pressured by the subdued market situation in Finland, our interest focuses on the achieved profitability level, which provides an indication of the new group structure’s competitiveness and cost structure. In addition, our interest lies in potential agreements for the Technology business and information on the progress of the Swedish subsidiary’s earnings turnaround.
Tomppa and Antti have prepared a new company report following EcoUp’s Q3.
EcoUp’s Q3 report was subdued on many fronts. Our revenue forecast proved too high, EcoUp’s market comments remained lukewarm, growth expectations for the Technology business were pushed forward, and the group’s medium-term targets were removed. The silver lining of the report was a lighter cost structure than we expected, which provides a good basis for earnings growth once revenue turns to growth. After the subdued report, our forecasts decreased, and the short-term valuation outlook remains tight. Thus, we reiterate our reduce recommendation for EcoUp and our target price of 1.70 euros.
Tommi, Antti, and Pauli have written about EcoUp’s new targets.
EcoUp announced its new medium-term financial targets and strategic focus areas for 2026–2028 on Tuesday afternoon. The company had canceled its previous targets in October 2025. The new targets indicate more moderate growth and profitability development compared to the old targets. Compared to our forecasts, the revenue target for the key Insulation Business is slightly stronger, while the profitability target is more cautious. The company’s target setting takes into account weak market demand in the short term but assumes the market will recover in the medium term. Regarding the Technology Business, the company continues to seek partners for the business to be incorporated. EcoUp is also changing its CEO, as current CFO Pauli Anttila will take over as CEO at the beginning of the year, and current CEO Matti Kaski will return to the position of Chairman of the Board.
Apparently, shareholder equality isn’t much of a priority at EcoUp. I recall @Pohjolan_Eka mentioning these directed share issues in another thread. It’s quite an unpleasant trend that these are becoming more common like this. Not a very nice development from a retail investor’s perspective, even if the share price holds its ground better this way. Ownership gets diluted, and the share price certainly reacts to the fact that some “buddies” get shares below market price. In a rights issue, however, you can subscribe to new shares in proportion to your own holding, which is why it’s a good approach.
Here are Antti’s comments on EcoUp’s plans for a 3 million directed share issue
EcoUp announced on Friday afternoon that it is considering a directed share issue of approximately EUR 3 million to strengthen the company’s capital structure and finance growth. The company’s major shareholders have committed to subscribing for a significant portion of the issue. We are not particularly surprised by the share issue plan, as the company’s balance sheet position has tightened following weak earnings performance. The issue reduces the company’s financial risk, but if implemented, it will cause significant dilution for existing shareholders. We will incorporate the planned financing arrangement into our forecasts at the latest after its completion.
I understand the other side of the criticism, but despite the problems, I don’t consider a directed share issue to be a completely worthless financing solution, as is sometimes suggested in general discussion (cf. an axe is a good tool for splitting wood, but for cutting, there are often better options). Last year, I wrote my own “two cents” on the subject in a column for Viisas Raha.
On a general level, the advantages compared to a rights issue are speed, cost, certainty of execution, and likely also short-term share price volatility (if that is of interest). As I wrote in the comment linked by Alokas, in EcoUp’s case, I think the arguments regarding price and certainty of execution are valid. On the other hand, the downsides of a directed issue relate especially to the already mentioned suffering of shareholder equality and potential discounts relative to the stock market price (EcoUp’s plan includes no discount relative to the short-term volume-weighted average price). Timing also plays a huge role in whether a directed share issue is a good or bad choice by the board. I doubt many retail investors would badmouth Remedy’s directed issue carried out at a share price level of around 45 euros these days. Hindsight regarding timing in one direction or another is also very easy. I’m not accusing anyone of being wise after the fact, but just stating that the logic of decisions may appear very different after some time has passed.
Right now, by the way, a private investor has the opportunity to buy EcoUp shares on the stock exchange at a lower price than the directed issue price, if compensating for the dilution appeals and/or there is faith in a business turnaround. Of course, the situation changes constantly according to trading, and its persistence or the volume available for purchase below the planned issue price cannot be guaranteed.
And I don’t see what the problem is in general when a directed issue is carried out above the previous day’s closing price. Even today, it has been possible to buy over 30,000 shares below the issue price.
A directed issue is indeed a good solution in this situation. Antti, regarding the clear turnaround in EBITDA you’ve forecast after 2025: could you elaborate on how you see this turnaround taking shape, please? The sale of the suction service doesn’t in itself improve the margins of the insulation business, so the turnaround is presumably driven by developments within the insulation segment itself?
