The analysis is mine, but Atte, as an old SSH veteran, certainly helped by sparring and reviewing the report.
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Roni is fully responsible. I did attend the monitoring kick-off meeting to get updates on SSH and have sparred with Roni on the case during this process. But purely out of interest, I’ve now joined the discussion because I would really like to understand the thoughts of those who had a positive view on the stock at the 3-5 euro levels, regarding how they see SSH’s future in light of the numbers.
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My question is why sometimes there is and sometimes there isn’t - justification/confidence in the premium in the analysis.
Through examples: Withsecure - the DCF was what it was, and internal structural arrangements, and scaling didn’t work - a premium was paid for it. Is it clear why? Was it in the analysis’s target prices? If so, why?
Qt disappoints. Analyses are largely based on historical stock recovery. Is a historically observed DCF somehow more reliable than estimating future DCF potential? Why?
SiloAi - would such a DCF ever have been obtained for it through analysis that it would have justified the M&A price? Why?
Situations vary, and there’s a desire to understand why analysis sometimes
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Leonardo deeply integrates SSH into its Zero Trust suite and sells it to governmental clients, for defense, and to NIS2-critical environments.
If even one “reference country” starts rolling it out, e.g., Italy, Germany, or some NATO organization, then I IMAGINE that revenue growth will be well over 20%.
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In our analyses, we verbally state if a takeover bid is considered possible for company X, but fundamentally, the analyses are made on the basis that the company will continue as an independent entity on the stock exchange.
Regarding the examples you brought up, WithSecure was priced on the stock exchange at just over 1x EV/S when confidence in its growth story had eroded after years of disappointments. The takeover bid was made at a 2.3x EV/S multiple, which already paid to some extent for future growth expectations. In SSH’s case, the stock’s EV/S multiple was 7.8x for this year at yesterday’s closing price, meaning expectations have already been baked into the price many times over compared to WithSecure. Then, if you wish for a takeover bid with an even juicier premium, the valuation multiple would have to rise clearly above 10x EV/S, which means a valuation at which only very few companies in the world are priced. But I would certainly be very happy for all SSH owners if this M&A option were to materialize in the coming years and the company would be paid significantly more than its current valuation.
Roni had also outlined a scenario in the report where SSH’s revenue would grow by just over 20% per year until 2029, and at that point, a high 6x EV/S multiple would still be accepted for the stock. In that case, there is upside potential in the stock, but it requires top performance and valuation in the coming years. Whether the risk-reward ratio is sufficient to lean on this scenario is for everyone to decide for themselves.
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With these European defense budgets, and the needs to protect critical societal infrastructure are only just starting in Europe’s post-awakening (thanks to US prompting), why wouldn’t LV start rolling with ++20%? Considering the ownership structure (i.e., large institutional owners are scarce) compared to, say, Kuutti (i.e., institutional owners are widely represented), then sometimes things start rolling, and the premium expectation also moves to its own levels; we all know this without a DCF basis.
Certainly, it’s now in the hands of SSH’s board, CEO Raulas, and the Leonardo collaboration whether this expectation turns into a diamond💎 or ash😂. We’ll see.
Even though I don’t own the stock now, it would be a big plus, and they are very confident about the future if SSH agrees to pay for these analyses again. Didn’t they get nervous earlier about those sell recommendations? Or did Leonardo demand it, with the idea that they would get the whole company cheaper when there’s a sell recommendation active?
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It’s the height of stupidity for SSH’s management to buy an analysis from the same company that ‘in the previous round’ crushed the company’s share price by half with its report (from two euros to one), and the price has remained at the one-euro level ever since the acquisition of Leo. Did SSH expect that the same guys would now issue a bullish report with a target price of 10€? Give me a break 
The company would be 10x more valuable if it were listed in the US, imo. Revenue is still at such a low level that doubling it relatively quickly is no trick, if the defense industry is booming. And then you can add a nice multiplier for growth and a hot industry, and you’re easily at a 500m€ valuation, as Olli Viitikka also painted in some interview.
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Our monitoring ended last time on 30.12.2021, when the share price, according to the monitoring termination report, was €3.05. It seems it was the market itself that hammered the price down to one euro.
I somewhat disagree about the ease of doubling revenue. Of course, in the medium term, I hope this happens, as the valuation certainly requires it. For a value 10x higher than the current valuation to be justified, doubling revenue would not be enough to justify the valuation at all. I’m sure the company’s board would have investigated the matter further if they could easily get a 10x valuation from the US.
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I completely agree with this. If the Leonardo integration succeeds even moderately: PrivX + NQX sales to European state actors, EU’s NIS2 and PQC regulations drive demand, One big contract → SSH +20–40% instantly. I see this scenario as anything but a “top performance,” more as a structural consequence.
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But anyway, no need to worry, this is more of an opportunity to get involved, and as "@monistuskone described below, it only needs a significant order/info and we’ll be on different levels.
It’s also possible, conversely, that because SSH’s management, from their experience, already knew Inderes’s previous ‘no future’ view, they might have timed a large report order to this juncture, meaning they have solid ground under their feet. SSH’s management demonstrated expertise with their Leonardo achievement.
And 35-40% revenue growth is no big deal; sometimes things just take off. Imagine if SiloAI or Wolt had ordered an analysis of themselves – DCF and valuation would have high-fived 
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Inderes’ analysis is truly high-quality and in-depth. The analyst delves into the company in an incredibly multi-dimensional way, creating an accurate picture for the investor of the company’s past, present, and future. Currently, the market and the analyst are very much at odds regarding the company’s value, but it is undeniably substantiated that the market has been wrong. This can be clearly observed from the EV/S multiples and the DCF calculation.
Next, we will wait for the growth story to unfold from the sidelines. Leonardo invested in this at a share price of 1.5 euros, so there’s no point in expecting more than this. This is how it must be seen, as I don’t see any counterarguments in the thread.
Thanks for the analysis and a good continuation of autumn to the forum, and especially to those responsible for the forum’s hygiene.
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What often goes unnoticed is the general change in atmosphere in the defense industry and security sector, from which it is clearly perceptible that key companies in the sector cooperating with the state, and especially with the defense forces, are now genuinely allowed to market and sell.
I am absolutely of the opinion that SSH would have been sold ages ago if the state had agreed to it. However, the company is so crucial for national defense that this is not possible. This entry by Leonardo was already a total surprise, but actually only confirmed that suspicion. If they couldn’t get it all, then at least something.
Sales and growth are stalling for the same reason. One cannot even talk about the entire company. When a specific question about the company is asked in a voluntary exercise, discussions have ended there. Now, however, the situation has changed. A new international investor makes the company, its products, and its activities visible to everyone, which will certainly boost sales.
Until now, it has suited the state perfectly to develop and use the best, and the less people know, the better.
Of course, it is impossible for an analyst to measure, analyze, and include these aspects in a target price report. But everyone certainly knows that if investment decisions are made based on realized figures, we will all remain equally poor going forward.
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The Chairman of the Board has opened up on LinkedIn. It’s rare to see a Chairman of the Board take such a stance on an analysis. Fortunately, forecasts are ultimately just forecasts, and the company can now ‘shoot down’ these “cautious” forecasts with its own actions. The appreciation will surely follow 
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Naturally, such a statement should be followed by widespread insider share purchases, and why not also share buybacks and cancellations.
Otherwise, that is just embarrassing; when it could also be owner-value creating (if Österlund genuinely believes what he writes), and embarrassing.
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Traditionally, it has been a bad sign when a company’s management or insiders comment on the stock price. As noted above, if the stock is undervalued, then just buy it.
Put your money where your mouth is.
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@Mikko_Makinen has made a small and good “tweet thread” on the topic 
https://x.com/Mikko_M_Makinen/status/1993543621581455507
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Alright, now Henri Österlund has also personally bought 2500 SSH shares.
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A 1.6 percent increase to the previous amount, but it’s something!
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Quite a small statement.. A
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