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SSH Communications Security Oyj (HLSE:SSH1V) is forecast to swing back to profitability within three years, with projected earnings growth of 128.13% per year. Revenue is also expected to rise at an impressive 24.5% annually, easily outpacing the Finnish market’s 4.1% average. However, the company remains unprofitable for now, with losses having grown by 1.4% per year over the last five years, and its share price has been notably volatile over the past three months. The outlook highlights the balance between high growth expectations, the risks associated with premium valuation, and ongoing losses.

See our full analysis for SSH Communications Security Oyj.

Let’s see how these numbers compare to the broader narratives discussed among investors and where they might cause some rethinking.

Curious how numbers become stories that shape markets? Explore Community Narratives

• Losses have increased by 1.4% per year over the last five years, even as revenue is projected to grow at a significant 24.5% annually going forward.

• Prevailing optimism centers on the idea that strong sector-wide demand for cybersecurity should eventually enable a turnaround. However, the persistent loss trend highlights a key tension:

  • While bulls anticipate that ongoing digital threats will create a major runway for SSH Communications Security Oyj, the reality is that the company has yet to translate that sector tailwind into bottom-line improvement.

  • This sustained loss trajectory means investors face a meaningful lag between narrative-driven optimism and demonstrated profitability, unlike more established peers.

• SSH1V trades at a Price-to-Sales ratio of 6.9x, compared to 3.9x for direct peers and 2.3x for the broader European software industry.

• The market is pricing in a sizable improvement for SSH Communications Security Oyj relative to its competitors. This heightens the risk that any stalling in revenue growth could lead to multiple compression:

  • Investors expecting premium valuation to persist are betting that SSH1V will out-execute both peers and the sector on contract wins or technology upgrades.

  • However, the current premium leaves little room for disappointment if near-term growth targets or margins do not materialize as expected.

• SSH1V’s share price has experienced notable volatility over the last three months, despite forecasts for a return to profitability within three years.

• This volatility creates a dilemma for long-term investors:

  • The company’s ambitious earnings growth forecast of 128.13% per year could attract momentum-oriented buyers, but the unstable share price underscores ongoing uncertainty about timing and sustainability of profits.

  • Until the shift to consistent profitability is visible in actual results, sentiment is likely to be highly reactive to even modest news developments.

Zalaris (OB:ZAL) has become profitable over the last five years, with annual earnings growth averaging 26.3%. Over the past year, earnings growth accelerated to 40.2% and net profit margins increased to 4.5%, up from 3.8% previously. This highlights the company’s focus on high-quality earnings.

See our full analysis for Zalaris.

Next, let’s see how these results compare to the community narratives and whether the latest surge in profitability is changing the story for Zalaris.

Curious how numbers become stories that shape markets? Explore Community Narratives

• Net profit margin reached 4.5%, moving further above the previous year’s 3.8% and demonstrating a notable step up in quality of earnings compared to peers in professional services.

• What stands out against the prevailing market view is that the margin expansion helps set Zalaris apart, even while peer companies in the sector commonly report lower or flat profitability trends.

  • The 4.5% margin is supported by 40.2% annual earnings growth, a pace that amplifies the importance of sustaining this quality of profit.

  • This momentum signals that Zalaris’ operational model is delivering more value per krone earned, even as sector averages trend lower.

• Zalaris trades at NOK92.80 per share, nearly three times the DCF fair value of NOK32.06, and at a price-to-earnings ratio of 31x, which is well above both the industry average (21x) and the peer group (13x).

• Critics highlight that the wide premium over DCF fair value makes the bullish case harder to justify, especially since the valuation gap has widened alongside the profit gains.

  • While profit quality has strengthened, this outperformance is already “priced in,” leaving limited room for additional surprise upside unless growth accelerates even further.

  • The market’s optimism puts pressure on Zalaris to maintain this level of growth or risk a correction toward the DCF benchmark.

• Despite profit growth, Zalaris is flagged as not being in a good financial position according to the latest risk signals, which could limit flexibility for reinvestment or weathering downturns.

• Another key viewpoint is that, although recent performance is strong, balance sheet resilience is not keeping pace. Bears argue this mismatch could amplify downside risk if sector conditions tighten.

  • Questions linger about whether margin improvements are sustainable without a stronger financial footing.

  • Financial health concerns may weigh on investor confidence even if the income statement looks robust for now.