Translation: Original published in Finnish on 5/28/2025 at 7:31 pm EEST.

The past few years have been challenging for Enento, as weaker demand for consumer credit information due to structural changes in the Swedish market has driven down revenue and results. At the start of this year, the company returned to growth after a two-year downward trend and, despite the still somewhat cloudy outlook for the Swedish market, we expect the company to continue growing in the coming quarters and years. Following a modest increase in the share price, the valuation (2025e-2026e adj. P/E 19x-15x), has reached a neutral level, in our view, already carrying the promise of improved earnings in the coming years. We reiterate our EUR 17.5 target price but lower our recommendation to Reduce (previous Accumulate). 

Business focus on Finland and Sweden

Enento is one of the leading providers of digital business and consumer data in the Nordic countries. The company collects information from multiple sources and processes it to create services that support customers' decision-making. Enento's services are widely used in areas such as risk management, sales and marketing as well as real estate transactions. The company's business is divided into two business areas: Consumer Insight (CI) and Business Insight (BI). Geographically, the largest markets for the company are Finland and Sweden. In Finland, BI accounts for a larger share, which has stabilized the Finnish business in recent years due to BI's more defensive nature. In Sweden, on the other hand, CI accounts for a larger share, with somewhat cyclical demand for consumer credit information. However, Enento is in the process of turning business information into a second pillar for its Swedish business, and a major business transformation program is currently underway there. In addition to Finland and Sweden, Norway is also a growing market for the company (Enento is one of the largest players in company information), but the country is still of limited importance for the group as a whole. In any case, since Enento operates in the Nordic business and consumer information market of around 600 MEUR, developments in the Nordic economies will also directly impact the company's demand outlook.

Return to growth after difficult years

Enento has faced challenges in recent years, as the rise in interest rates and structural changes in the Swedish market (loan brokers leaving the market) have clearly weakened demand for consumer credit information services, in particular. Due to the high gross margins, the decline in revenue has also been evident on the earnings lines, despite the company's efforts to protect its profitability through an efficiency program. In any case, Enento's profile as a defensive growth company has been somewhat challenged after the last few years. The outlook for the Swedish market remains rather hazy, but the starting level is already low, and the company has not noticed any significant changes in market activity following the regulatory changes that took effect at the beginning of the year. At the group level, Enento returned to growth in the first quarter after more than two years of declining revenue, which can be seen as a milestone of sorts.

Earnings growth priced into share

Enento's adjusted EV/EBIT multiples for 2025-2026 are 14x-13x and the corresponding P/E multiples are 19x-15x. This year's multiples are not yet particularly attractive, but EPS is still depressed by significant non-recurring items in the first half of the year (not adjusted in the P/E ratio), and these should decrease towards the end of the year. Next year's multiples are already moderate, but we do not see much upside in them and the expected return is mainly based on a dividend yield of around 6%. Our DCF model, which expects very clear improvement in cash flow over the next few years, indicates only limited upside for the stock (EUR 18.0). We believe the company has the potential to return to steady earnings growth, but regulatory changes in the Swedish market continue to create uncertainty in the short- and possibly also medium-term outlook. After a slight increase in the share price, we believe the risk/reward ratio is at a neutral level.