At the smaller end, Odoo is raising its head. In medium-sized client accounts, the worst competitor is Monitor, but Roiman Lean is also involved there.
Precisely that consulting slump is the problem. It reflects the number of new projects and thus future continuous invoicing. Conversely: when there are no projects, there are no new customers, no invoicing base. However, it often seems that monthly invoicing only starts at the end of the project or during it. I don’t know.
It is true that Lemonsoft has many customers in industry and wholesale. And in that quantity, individual or even tens do not yet quantitatively make a difference. Generally, however, these industrial companies are large enough that one can easily make a big dent in the invoicing base. Compared to, for example, Finvoicer, where customers’ monthly charges are tens per month, whereas in industrial customers, invoicing can be thousands of euros per month.
And once the reputation is gone and customers start leaving, it’s hard to stop. One must remember that Finland is a small country and entrepreneurs talk a lot among themselves. Through that, when someone switches away and gets good experiences from another software, the stern really starts to leak like a lemming herd.
But as @Atte_Riikola noted, let’s wait and see. I hope I’m wrong for the sake of all investors in the company I myself sold my Lemonsoft shares after the IPO at levels above 15€/share, as I anticipated what was to come (And of course, at that level, the company’s valuation was completely overblown).
It is therefore expected that the company’s reorganized sales team will gradually start to improve its performance in the coming months. After this, new customer implementations will still take some time, so revenue growth could start to accelerate in H2 next year.
In Admicom’s case, the report states the following:
Also in Admicom’s case, changes have still been made in the organization this year, and this has slowed down development. In addition, the change in the billing model is one variable that could somewhat support growth next year. Furthermore, a slight recovery in the construction market would support growth, about which more was written, for example, in the CMD comment published today.
Well, your forecasts for Lemonsoft are quite conservative compared to the company’s targets, which is over 90% operating profit growth by 2028. However, for Admicom, you have growth of this magnitude forecasted.
Lemonsoft’s guidance: the new financial target is to achieve an average adjusted operating profit growth of 25% in 2025-2028. For clarity, the target concerns the following three years (2026-2028).
A potential hidden influence already crept into my mind. For example, ADMICOM is in your model portfolio, and partly the CEO’s speeches are also more assertive..
In the comment linked above, I explain how those targets relate to our forecasts. It’s good to remember that the targets also include acquisitions, so organically, such strong earnings growth is not expected at this point. But it is true that with good strategy execution and an improvement in market conditions, organic growth could be stronger than our current forecasts.
Atte has produced a new, excellent comprehensive report on Lemonsoft. As usual, this comprehensive report is accessible to everyone and is not behind a paywall.
We reiterate our Accumulate recommendation for Lemonsoft and a target price of EUR 7.1. Lemonsoft’s past year was characterized by major changes on both the organizational and technology platform sides. The transition phase is starting to be behind us, and going forward, the company will be able to focus on accelerating the pace of sales and product development. In our assessment, the growth outlook for 2026 is still cautious, but at the stock’s current valuation (2026e EV/EBIT 12x), expectations are also moderate. Thus, we see the risk-reward ratio as attractive.
We believe that the industry’s consolidation trend will continue in the future, as the Nordic ERP market interests several investment parties. Several private equity-led companies are forming in the market, in addition to which listed mid-sized players continue their expansion. In our view, Lemonsoft’s strong market position in Finland in the industrial and wholesale sectors also makes the company an attractive and potential acquisition target in the long term as the market consolidates.
I myself sold my Lemonsoft shares after the IPO at levels above 15€/share, as I anticipated what was to come (And of course, at that level, the company’s valuation was completely overblown).
