Lemonsoft Oyj (HLSE:LEMON) posted a net profit margin of 14.5%, down from 16.9% a year ago, with its revenue forecast to grow at 4.1% per year, just trailing the Finnish market average of 4.2%. Earnings are projected to increase at 13.6% per year, compared to the broader market’s 16.7% outlook, and the company has delivered an average annual earnings growth of 11.3% over the past five years. With earnings quality described as high, these results suggest a steady, if slightly slowing, operational performance that positions Lemonsoft as a value contender among its software peers.
See our full analysis for Lemonsoft Oyj.
Next up, we will put these numbers in context by comparing them to the wider market narratives and expectations, spotting where Lemonsoft’s story aligns or veers off track.
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Lemonsoft’s Price-to-Earnings ratio stands at 28.1x, which is not only right in line with the European software industry average (28x), but also sits well below the immediate peer group average of 42.7x. This gives the stock a relative value edge that was not deeply apparent from first-glance headline metrics.
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What stands out for newer investors is that the share price trades below discounted cash flow (DCF) fair value (€7.00 versus €8.34), heavily supporting the view that Lemonsoft offers a margin of safety despite trailing revenue growth.
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The DCF fair value calculation is even higher than the industry peer average, suggesting that current market pricing underappreciates Lemonsoft’s underlying fundamentals.
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This valuation disconnect is especially notable considering the firm’s recent net profit margin decline, offering a defensive angle even with sector growth cooling.
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Lemonsoft’s share price has not been particularly stable over the past three months, even though the company’s forecast profit and revenue growth are positive and not far off the market average.
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While recent price fluctuations might concern cautious investors, prevailing analyses suggest that Lemonsoft’s defensive characteristics, such as high earnings quality and continued profit growth at 13.6% per year, help balance out stability risks.
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Share price volatility has not corresponded with a sudden deterioration in the company’s fundamentals, which reassures those focused on sustained results rather than short-term price moves.
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The company’s average annual earnings growth of 11.3% across five years also offers a buffer that tempers the significance of recent share price swings.
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