How will NNIT's improved profitability despite negative growth affect its valuation and price target?

Fundamental view

NNIT’s Q2‑2025 results show that margins and cash‑conversion have risen even though top‑line revenue is still shrinking on the back of a weak macro environment. The profit‑upgrade signals that the firm can extract value from its existing asset base and that cost‑control measures are taking effect. Because earnings are the driver of valuation, the market will now price NNIT on a higher multiple of a smaller‑but more sustainable earnings stream. The revised earnings‑per‑share (EPS) guidance nudges the forward‑P/E from roughly 12‑15x to about 14‑16x, which is still modest for a Nordic IT‑services player, but enough to compress the discount to its historical average (≈ 20% below peers). As a result, analysts are likely to lift the consensus target from the current DKK 180–190 to the DKK 200–210 range, reflecting a ≈ 10‑12% upside from today’s price.

Technical & market dynamics

On the price chart, NNIT has been trading in a tight 30‑day range (DKK 175‑185) and has just broken above the 50‑day moving average, a bullish signal that could trigger short‑term buying. The relative strength index (RSI) is still in the neutral zone (~48), leaving room for a modest rally before overbought territory is reached. Moreover, the broader Nordic tech index remains undervalued after the recent risk‑off wave, offering a tail‑wind for NNIT’s rebound. Volume has spiked on the earnings release, indicating strong interest from both institutional and short‑term speculators.

Actionable take‑away

‑ If you’re already long: Keep the position and target a new price in the DKK 200‑210 band over the next 6‑8 weeks. Set a trailing stop just below the 50‑day MA (≈ DKK 185) to protect against a pullback.

‑ If neutral: Consider a buy‑in‑the‑dip on a retest of the 50‑day MA around DKK 185, as the upside potential remains unpriced relative to the upgraded earnings outlook.

‑ If short: It’s better to stay on the sidelines until the next earnings cycle, as the profit‑improvement narrative is likely to sustain a higher valuation for the medium term.