Can Carasent (OM:CARA) Stock Sustain Q3 Earnings Momentum Despite Delays?

Carasent stock came into today with a solid recent run, up about 17% over the past three months, and closed at SEK28.35 after the market had time to digest fresh Q3 2026 figures. The headline is simple: the healthcare software group put up SEK108.16m in quarterly revenue and swung to basic earnings per share of 0.15 SEK, a clear move away from the loss reported in Q2.

Short-term traders are reacting to the print. Longer-term holders are more likely studying the recurring revenue engine, including the SEK424m in contracted annual recurring revenue, and weighing that against the current valuation debate around the stock.

Like the recurring revenue story at Carasent but want a wider set of healthcare and software stocks with stronger balance sheets to compare it against? Check out our curated list of solid balance sheet and fundamentals stocks (203 results)

Q3 2026 Earnings Summary

• Revenue (Q3 2026 vs. Q3 2025): SEK108.16m vs. SEK82.20m (up roughly 32%)
• Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): SEK10.30m vs. SEK14.12m (down about 27%)
• Basic EPS (Q3 2026 vs. Q3 2025): SEK0.15 vs. SEK0.20 (decline of around 25%)
• Contracted Annual Recurring Revenue, ARR (Q3 2026): SEK424m; prior-year comparison not disclosed (group ARR growth 29%, including 14% organic)

Earnings tell you what Carasent reported this quarter, but investors who care about what the stock might be worth usually focus on the cash being generated in the background.

Looking at Carasent's cash flows and the discounted cash flow work built on them, the stock could be a whopping 38% undervalued.

Carasent’s growth story vs execution reality

Supporters of Carasent argue that the shift to cloud and new modules will steadily thicken each customer relationship.

"New product modules such as the surgery solution in Sweden, ambient listening tool Medsum and patient interaction platform Ad Voca broaden Carasent’s addressable market across more clinic types, which can support higher net revenue retention, upsell driven ARR and improved operating leverage."

Q3 points in that direction. Group ARR reached SEK424m with 14% organic expansion, net retention sits around 110%, and Medsum already has roughly 300 paying users. EBITDAC of SEK21m and a 20% margin show operating leverage starting to come through, even with MDR and Germany costs still ahead.

Bear case on delays and churn put to the test

The main pushback on Carasent is that long rollouts and project slippage will blunt earnings power.

"The business has several large and lumpy projects such as Volvat and the German security upgrades where management has already flagged the risk of delays. If these kinds of implementations regularly slip into later periods, consulting revenue and transaction revenue could become less predictable and may not materialize in time to support margin progression and earnings."

The concern is visible. Backlog expanded to SEK8b and key Webdoc projects like Falck and Frelsesarmeen stretch into 2027. Germany is dragging organic performance through churn in legacy Data AL, and management is guiding to higher Q4 spend, which limits near term margin progress despite healthy contracted ARR.

One Narrative disagrees with today's price. → See where this Narrative says Carasent should trade.

Hunt For Mispriced Cash Engines

Carasent highlights how much investor confidence can depend on recurring revenue and the scheduling of key projects. The real opportunity could sit in stocks where cash generation and current market expectations appear misaligned.

• Company 1 - 38% below our estimate - builds a device recommerce network that expands on trade in subsidies and growing acceptance of secondhand electronics.
• Company 2 - 43% below our estimate - ramps high speed networking hardware for hyperscalers upgrading data centers for more demanding AI and cloud workloads.
• Company 3 - 15% below our estimate - scales complex injectables and biosimilars after extensive capacity buildout and integration of acquired product portfolios.

Those are three of them. See all 193 potentially undervalued companies →

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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