Pauli Lohi updated Inderes’ analysis after the results.
Recommendation ‘Add’ unchanged and target price slightly decreased from €53 → €51.
Nothing revolutionary for those of us who own this long-term, holding.
“The company’s long-term growth outlook remains good, and valuation multiples are decreasing quite rapidly in the coming years, so we reiterate our ‘Add’ recommendation with a lowered target price of 51 euros (previously 53 €).”
“A strong position in diversified and growing end markets makes Vaisala’s long-term earnings growth profile good and the business risk level quite low. The stock’s valuation level based on 2025 forecasts (EV/EBITA: 17.7x) is quite typical when compared to the company’s own history and decreases quite rapidly in the coming years through organic earnings growth. Assuming a fair valuation level of 18x for 2027, we estimate the stock’s annual return expectation to be 12%/year for the coming years, which still exceeds the required rate of return (8%). Compared to the rest of the stock market, the high valuation level is based on future earnings growth expectations, which partly increases the investment’s valuation risk.”
There was nothing particularly noteworthy. Familiar things were noted, e.g., Vaisala’s Q2 result fell short of expectations due to the weak Weather & Environment business, and e.g., the slowdown in renewable energy and other important markets weighed on sales and profitability.
Of course, the strong performance of the Industrial Measurements unit was mentioned.
Vaisala’s Q2 fell short of our estimates due to weaker than expected performance in W&E. Although W&E faces headwinds from various sources, IM momentum continues.
Almanakka has written a good and comprehensive article about Vaisala.
Overall, Vaisala is clearly a strong competitor in both the W&E and IM segments, thanks to its technology and application expertise, as well as customer understanding, holding a solid market position especially in high-value and reliable solutions. Continuous investment in product development and the advancement of digitalization and sustainable solutions strengthen its global position – especially in areas where the quality of measurement data is critical for business or societal functionality.
Vaisala Initiates Change Negotiations in Parts of its Operations in Finland
Vaisala, a global leader in measurement technology enabling climate action, is initiating change negotiations in Finland to adapt to the recent slowdown in the Weather and Environment business area market.
Vaisala expects the full-year revenue for its renewable energy business to be approximately EUR 15 million lower than the previous year. Additionally, orders in the meteorology and aviation market segments decreased in the first half of 2025. To address the reduced demand in the renewable energy business, Vaisala has sharpened its focus on the wind energy and marine sectors, which are considered to have the best growth potential in this market segment. Furthermore, Vaisala is implementing necessary cost savings and adapting its organization.
As a result, Vaisala is initiating change negotiations in Finland in parts of the Weather and Environment business area, excluding Xweather, as well as in parts of production and group support functions. The Industrial Measurements business area is not included in the negotiations. According to preliminary estimates, the change negotiations are expected to lead to the termination of a maximum of 45 positions. The negotiations involve 620 employees in Finland. In total, Vaisala has nearly 2,500 employees, of whom approximately 1,600 are in Finland.
“Initiating these change negotiations has been a difficult but necessary decision to overcome current market challenges. We are doing our utmost to find suitable alternatives for those affected by this change and to support our colleagues during the process,” says President and CEO Kai Öistämö.
The negotiations are expected to conclude by the end of Q3/2025. The negotiations do not concern Vaisala’s other operating countries.
Here are Paul’s comments on Vaisala’s cost-saving measures.
The company announced it would reduce personnel in business operations affected by weakened demand and in group support functions. In our view, the cost-saving measures were expected after the surprising demand challenges in Q2. The savings will have a small positive impact on the company’s profitability outlook for next year, but we have already largely accounted for this in our forecasts. The savings do not apply to data services or the Industrial Measurements business area, which are on a strong growth path.
Pauli has published a new comprehensive report on Vaisala, and as usual, this extensive report is available for everyone to read.
The year 2025 has brought Vaisala both a positive turn in demand from industrial customers and significant challenges in the renewable energy sector. In the big picture, however, the company’s growth palette is broader than before, as the company strengthened its weather data services through acquisitions at the end of 2024. We see this as a continuation of the company’s successful acquisition history, where Vaisala has strengthened or acquired new growth businesses alongside existing ones. The company is a long-term value creator, which we expect to yield approximately 10% per year for shareholders despite the current tight valuation (EV/EBITA 2025e: 17.4x). We reiterate our Add recommendation and a target price of 51 euros.
A capital-light business model and good profitability lead to a reduction in debt in our forecasts for the coming years, as a result of which the company could once again become net cash positive. Our forecast for 2025e net debt is 3 MEUR, and for 2026, we expect the company to have turned its balance sheet to net cash (40 MEUR). We see it as very possible that Vaisala would carry out more smaller acquisitions in the coming years, for example, to complement its data services business. Historically, the company has made acquisitions sparingly, and we believe that targets meeting the company’s high criteria are not abundant even now. Vaisala monitors interesting acquisition targets patiently, and the timing of deals often depends on the seller’s decision-making.
Vaisala Acquires Quanterra and Launches a New Unit Focused on Climate Measurements
Measurement technology company Vaisala emphasizes the importance of measured results and transparency in the climate discussion amidst political uncertainty and climate skepticism. The company is expanding its business in greenhouse gas measurements and acquiring its customer, Quanterra. Quanterra specializes in monitoring soil carbon sequestration and emissions.
Verifying Carbon Footprint is Central to International Climate Actions
Quanterra offers measurement of soil carbon sequestration and carbon dioxide emissions for nature-based industries, such as the agriculture and food sectors, as well as the biofuel industry. Their customers also include public and private research organizations, for example, in carbon certification and emission offset markets. In practice, the company installs and maintains carbon flux stations at its customers’ sites to monitor the sequestration and release of carbon, water, and energy. Carbon cycle data is analyzed for the customer, and the service is billed as an affordable annual subscription.
Quanterra’s customers utilize real-time measurement data collected over a long period to verify the results of their emission reduction programs and the low-emission nature of their products. Verified local data on carbon sinks can also be used to create high-quality carbon credits for carbon markets. This offers agricultural operators and other natural resource managers an opportunity for a new source of income.
Founded in 2021, Quanterra is a spin-off from the University of Exeter. The company’s 2024 revenue exceeded 1.2 million pounds, and its business is EBITDA-positive. It currently has 14 employees.
Tässä on Paulin kommentit tästä tuoreesta yritysostosta.
*Here are Paul’s comments on this recent acquisition.
Vaisala sees accurate and reliable measurement of soil carbon sequestration and carbon emissions as important in the fight against climate change. The acquired company Quanterra is still small in scale, but profitable at the EBITDA level. As a global and well-known player, Vaisala can accelerate the scaling of Quanterra’s business to new geographies. We see it as positive that the target company is already familiar to Vaisala through a customer relationship.
Here are Pauli’s comments on Vaisala’s new service model for sensor calibration.
Vaisala launched a new, better productized service concept that simplifies sensor maintenance from the customer’s perspective and, in our estimation, enables Vaisala to grow its profitable service business. The growth brought by the service model is likely relatively small on Vaisala’s scale, but we also believe the operating model supports the longevity of customer relationships, which the company already maintains at a high level.
Vaisala Oyj Interim Report January–September 2025: Strong Net Sales and Profitability in the Third Quarter
Third Quarter 2025
Orders received EUR 119.6 (150.8) million, decrease 21%
Order book at the end of the period EUR 180.4 (220.4) million, decrease 18%
Net sales EUR 154.0 (136.6) million, increase 13%, at comparable exchange rates 16%
Operating result (EBITA) EUR 28.0 (25.8) million, 18.2 (18.9) % of net sales
Operating result (EBIT) EUR 25.7 (24.1) million, 16.7 (17.7) % of net sales
Earnings per share EUR 0.51 (0.53)
Cash flow from operations EUR 25.8 (25.2) million
Financial Guidance 2025
Vaisala estimates, excluding potential material changes in the market environment, that its net sales for 2025 will be between EUR 590–605 million and its EBITA operating result between EUR 90–100 million.
From the beginning of 2025, Vaisala has changed its operating result (EBIT) guidance to EBITA operating result in line with its long-term financial targets.
Market Outlook 2025
The industrial market, health technology market, and power market grew during the first three quarters of the year. Similar development is expected to continue during the rest of the year. However, the market environment remains uncertain, affecting the predictability of development in these markets.
The more established meteorology and air traffic markets are expected to decline compared to the exceptionally high levels of the previous two years. The renewable energy market is expected to decline this year due to the slowdown in new wind energy investments. The road traffic market is expected to remain stable.
Almanakka has written well and comprehensively about Vaisala regarding Q3.
It sounds like a negative outlook is already being set up here. Revenue for the last 12 months is now at 602m euros, meaning it can withstand a somewhat weak quarter. EBITA is also already at 98.3m euros. It would certainly be a huge disappointment if these figures were not reached. In my opinion, Öistämö shouldn’t try to explain so verbosely why the guidance might not be met, before stating what the guidance is. Unless W&E is truly melting down at a rapid pace.
Vaisala is holding a separate strategy call today from 2 PM to 4 PM, which can be viewed on Inderes’ website. The webcast also offers the opportunity to send questions via the chat function. We will naturally write a summary of the strategy call for tomorrow’s morning report.
Speakers: Kai Öistämö, President and CEO: Driving resilient growth in a changing market Jarkko Sairanen, EVP Industrial Measurements: Entering the next phase of growth Samuli Hänninen, EVP Xweather: Introduction of Xweather: Leading the future of weather intelligence Anne Jalkala, EVP Weather, Energy, and Environment: Driving profitability and global leadership
Here are Paul’s comments from Vaisala’s strategy call.
Vaisala’s strategy update a year after CMD partially reiterated familiar themes, but also revealed new details on strategic growth initiatives in different business areas. Long-term strategic actions specifically include growing service revenue in both Industrial Measurements and Weather and Environment business areas. The company also appears to be becoming more active on the M&A front. There are significant differences in short-term demand outlooks between different business segments, but we interpreted the company as seeing good opportunities to continue earnings growth despite market fluctuations.
Here are Pauli’s preview comments as Vaisala reports its results on Thursday, Feb 12.
We estimate the Q4 result to weaken from the strong comparison period, as currency fluctuations and weak demand for renewable energy, among other things, weigh on the figures. However, in our estimation, growth in Industrial Measurements has been good. In our view, the outlook for earnings growth in 2026 is favorable through growth in Industrial Measurements and the data services business, as well as supported by cost savings in the Weather and Environment (W&E) business area.
