Meko (OM:MEKO) Stock Faces Thin 0.7% Margin Despite Q2 Earnings Rebound

Meko (OM:MEKO) has put fresh numbers on the table for Q2 2026, reporting revenue of SEK4.6b and basic EPS of SEK1.42, with net income of SEK79m framing the latest quarterly snapshot. The company has seen revenue move between SEK4.5b and SEK4.7b over the past six reported quarters, while quarterly EPS has ranged from a loss of SEK0.18 to a profit of SEK1.42. This gives investors a clear view of how earnings have tracked through recent swings in profitability. With analysts focused on earnings quality and margin trends, this latest print prompts a closer look at how Meko is managing profitability against pressure on net margins.

See our full analysis for Meko.

With the numbers in place, the next step is to compare them with the most common narratives around Meko to see which stories the latest earnings support and which they call into question.

See what the community is saying about Meko

Profit margin still thin at 0.7%

• Over the last 12 months, Meko generated SEK18.3b of revenue and SEK130m of net income, which works out to a 0.7% net profit margin compared with 1.4% a year earlier.
• Consensus narrative expects efficiency projects and cost savings to lift margins over time, yet the recent margin outcome highlights the gap between story and numbers.
  • Analysts are looking for earnings to grow about 41.8% per year on roughly 3% annual revenue growth, even though the latest 12 month margin stayed at 0.7%.
  • Bears point to weaker margins and the focus on cost cutting as signs that demand is under pressure, while bulls argue that the new warehouse and ERP setup could eventually improve profitability.

Earnings swing to SEK79m supports bullish case

• Quarterly net income moved from a loss of SEK10m in Q4 2025 to a profit of SEK55m in Q1 2026 and SEK79m in Q2 2026, with basic EPS rising from a loss of SEK0.18 to a profit of SEK0.99 and then SEK1.42 over the same stretch.
• The bullish view that Meko can scale earnings on a leaner cost base finds some support in this run of positive quarters but also faces questions when set against longer term EPS trends.
  • Bullish analysts point to warehouse automation and the Building Strong Meko cost program as levers that could help margins, while the trailing five year earnings decline of about 26.6% per year reminds investors how hard it has been to turn these projects into durable profit growth.
  • Supporters of the bullish narrative also highlight ongoing moves in private label and e commerce, yet the trailing 12 month EPS of SEK2.34 shows that recent profitability is still modest relative to those ambitions.

What bullish investors think comes next for Meko, and whether these Q2 numbers really back their case, is unpacked in more detail in the 🐂 Meko Bull Case.

High 32.9x P/E and interest coverage concerns challenge bears

• Meko trades on a trailing P/E of 32.9x, above the European Retail Distributors industry average of 14.1x and slightly above the peer average of 30.5x, while interest payments are described as not well covered by earnings.
• Critics who lean bearish see the high multiple and thin interest coverage as key pressure points, but they also have to weigh them against valuation models that imply a very large gap to DCF fair value.
  • The DCF fair value of SEK457.58 sits far above the current share price of SEK76.85, so the stock is shown trading well below that model based estimate even as margin pressure and leverage risks remain in focus.
  • Bears also flag the fall in net profit margin from 1.4% to 0.7%, arguing it leaves less room to absorb financing costs, while others point out that forecasts for roughly 3% revenue growth and 41.8% earnings growth per year would, if achieved, change the interest coverage picture.

Skeptical investors who want to see how these risks stack up against the cautious narrative for Meko can go deeper with the 🐻 Meko Bear Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Meko on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Unsure whether the overall tone around Meko feels too optimistic or too cautious? Consider reviewing the underlying figures yourself and weigh both sides by checking the 2 key rewards and 2 important warning signs.

See What Else Is Out There Beyond Meko

Meko's thin 0.7% net margin, high 32.9x P/E, and pressure on interest coverage show how tight profitability and risk can feel in a single stock.

If that mix of fragile margins and leverage risk makes you uneasy, you may consider widening your options by checking stocks in the 293 resilient stocks with low risk scores that aim for more resilience.

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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