Softronic AB Class B (SOF.B) AI Stock Analysis

• Market Cap: kr1.12B
• Dividend Yield: 6.29%
• Average Volume (3M): 30.88K
• Price to Earnings (P/E): 14.8
• Beta (1Y): -0.11
• Revenue Growth: 4.00%
• EPS Growth: -12.08%
• Country: SE
• Employees: 445
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.38
• Shares Outstanding: 49,632,805
• 10 Day Avg. Volume: 28,658
• 30 Day Avg. Volume: 30,880
• PEG Ratio: -5.77
• Price to Book (P/B): 4.01
• Price to Sales (P/S): 1.41
• P/FCF Ratio: 10.75
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: kr24.50 ▲(11.36% Upside)

The score is driven primarily by strong financial fundamentals (low leverage and high ROE) and supportive valuation (moderate P/E and high dividend yield). Offsetting these positives are weaker cash-flow momentum (declining free cash flow and softer cash conversion) and a neutral-to-soft technical setup with the stock below key longer-term moving averages.

Positive Factors

Low leverage and strong ROE

Very low debt-to-equity and persistently high ROE indicate a financially conservative capital structure and efficient use of equity. This provides long-term financial flexibility to fund growth or weather downturns and supports stable returns to shareholders over multiple quarters.

Robust trailing revenue growth

Sustained triple-digit TTM revenue growth signals expanding demand for Softronic's services and products. If driven by scalable offerings and client wins, this supports durable top-line momentum and gives management room to invest in capability expansion and market positioning.

Recurring revenue mix and partnerships

A mix of subscription and maintenance contracts plus strategic technology partnerships increases revenue predictability and customer stickiness. This structural mix supports recurring cash flows and easier scaling of cloud/software offerings versus pure project revenues over the medium term.

Negative Factors

Sharply weaker free cash flow

A large decline in free cash flow and worsening cash conversion indicates earnings are less reliably converted to cash, raising working-capital and funding risk. Over several quarters this can constrain reinvestment, dividends, or require more external financing for growth.

Margin compression despite higher revenue

Revenue growth accompanied by falling gross and net margins suggests rising costs, pricing pressure, or unfavorable business mix. If persistent, margin erosion can impair sustainable profitability and reduce funds available for R&D, hiring, or capital returns.

Declining equity cushion

A falling equity base diminishes the balance-sheet buffer against losses and increases leverage sensitivity if performance weakens. Over multiple quarters this reduces financial flexibility and could limit capacity to absorb shocks or pursue opportunistic investments.

Softronic AB Class B Business Overview & Revenue Model

Company Description

Softronic AB (publ) provides IT and management services primarily in Sweden. It offers AI, AML, automation, business development, case management system, cloud, customer relationship management, ERP systems, management, Microsoft, operation, information security, vulnerability analyses, UX/design, web, and system solutions, as well as consultancy services. The company was incorporated in 1984 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

Softronic generates revenue primarily through its IT consulting and software development services. The company's revenue model is based on a combination of project-based fees, ongoing maintenance contracts, and subscription-based services for its software products. Key revenue streams include consulting services for system integration projects, custom software development contracts, and recurring revenues from cloud-based solutions. Additionally, Softronic has established strategic partnerships with technology providers and platform vendors, which enhance its service offerings and drive new business opportunities. These partnerships often lead to joint projects and collaborative solutions, further contributing to the company's earnings.

Softronic AB Class B Financial Statement Overview

Summary

Income statement is strong on revenue growth (+147.2% TTM) with solid profitability (gross margin ~15.9%, net margin ~8.6%), but margins compressed versus 2024 and TTM net income is below 2023–2024. Balance sheet is a clear strength with very low leverage (debt-to-equity ~0.08) and consistently high ROE (~26.5% TTM). Cash flow is the main drag: free cash flow is positive but fell sharply (-36.6% TTM) and cash conversion weakened versus 2024.

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is strong (+147.2%), while profitability remains solid with ~15.9% gross margin and ~8.6% net margin. However, margins have compressed versus recent annual levels (gross margin ~18.3% in 2024; net margin ~9.8% in 2024), and net income in TTM is below 2023–2024 despite higher revenue—suggesting higher costs or mix/price pressure.

Balance Sheet

Leverage is conservative with low debt relative to equity (debt-to-equity ~0.08 in TTM, improved from ~0.18 in 2022), providing financial flexibility. Returns on equity are consistently high (TTM ~26.5% and ~27–29% in 2021–2024), indicating strong profitability relative to the capital base. The main watch-out is equity has trended down from 2024 to TTM, which could reduce cushion if sustained.

Cash Flow

Cash generation is positive, with TTM operating cash flow (83.1m) and free cash flow (67.3m) covering most of net income (free cash flow to net income ~0.81). That said, TTM free cash flow fell sharply (-36.6% growth) and cash conversion weakened versus 2024 (free cash flow to net income ~0.97 in 2024), signaling more volatility in working capital/capex timing and less consistent cash realization of earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	882.40M	842.40M	837.52M	797.12M	786.52M	728.00M
Gross Profit	140.30M	154.07M	153.22M	144.30M	144.45M	139.94M
EBITDA	111.60M	118.54M	122.10M	105.73M	117.04M	111.04M
Net Income	75.60M	82.32M	84.04M	68.22M	73.71M	66.85M
Balance Sheet
Total Assets	444.30M	450.86M	459.41M	433.85M	428.03M	515.60M
Cash, Cash Equivalents and Short-Term Investments	80.60M	135.43M	107.90M	117.00M	130.61M	199.78M
Total Debt	22.40M	24.16M	32.80M	45.92M	9.40M	23.39M
Total Liabilities	167.70M	154.61M	174.43M	180.28M	171.63M	174.62M
Stockholders Equity	276.60M	296.25M	284.98M	253.57M	256.40M	340.98M
Cash Flow
Free Cash Flow	67.30M	110.40M	55.50M	72.82M	109.29M	102.92M
Operating Cash Flow	83.10M	114.37M	56.20M	80.61M	111.27M	103.08M
Investing Cash Flow	-25.20M	-3.97M	-700.00K	-8.19M	-2.38M	-559.00K
Financing Cash Flow	-83.80M	-82.87M	-64.60M	-86.03M	-178.06M	-19.92M

Softronic AB Class B Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:SOF.B, the sentiment is Negative. The current price of 22 is above the 20-day moving average (MA) of 21.88, above the 50-day MA of 21.88, and below the 200-day MA of 22.56, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 38.15 is Neutral, neither overbought nor oversold. The STOCH value of 7.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:SOF.B.

Softronic AB Class B Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SOF.B	71 Outperform	kr1.12B	14.83	27.44%	6.29%	4.00%	-12.08%
PACT	67 Neutral	kr2.70B	17.15	14.35%	2.13%	-4.36%	-31.55%
EXS	64 Neutral	kr1.95B	22.75	15.90%	1.13%	10.92%	-2.56%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CAG	60 Neutral	kr749.01M	15.52	―	3.83%	-4.42%	-6.27%
KNOW	56 Neutral	kr3.16B	32.37	2.38%	2.03%	-9.85%	-38.24%
B3	55 Neutral	kr366.74M	133.14	1.19%	―	13.21%	-97.19%