Systemair (OM:SYSR) Posts Q1 Growth And Finland Order, Is It Below Fair Value?

Systemair (OM:SYSR) is back in focus after reporting first quarter results that show higher sales and net income year over year, as well as a new SEK 60 million data centre cooling order in Finland.

At a share price of SEK85.9, Systemair has seen a 15.3% 90 day share price return and a 5.9% 1 year total shareholder return, suggesting recent momentum has picked up, with the latest earnings and the Finland data centre order likely influencing how investors view its growth prospects and risk profile.

Scan how Systemair compares with other ventilation and industrial cooling players by reviewing the hand picked 38 power grid technology and infrastructure stocks in the same broader infrastructure theme.

After a strong run in Systemair, supported by higher quarterly earnings and the Finland data centre win, the key issue now is whether the current price still offers an appealing balance of risk and potential reward once valuation enters the picture.

Price-to-Earnings of 22.4x for Systemair: Is it justified?

On the latest numbers, Systemair trades on a P/E of 22.4x, which sits below both its European Building industry average of 24x and a peer group average of 27x, even though it is described as expensive relative to an estimated fair P/E of 21x.

The P/E multiple compares the current share price with earnings per share. For a company like Systemair, which operates across ventilation, heating and cooling products, investors often use this ratio to gauge how much the market is paying for each unit of earnings.

In this case, the market is assigning Systemair a lower P/E than both the broader European Building industry and its peer average. At the same time, the estimated fair P/E of 21x sits slightly under the current 22.4x level, which indicates a premium to that fair ratio that the market could move towards if expectations moderate or earnings change.

Explore the SWS fair ratio for Systemair.

Result: Price-to-Earnings of 22.4x (ABOUT RIGHT)

However, Systemair still faces risks if ventilation and cooling demand weakens in key European markets, or if data centre orders fail to convert into repeat business.

Find out about the key risks to this Systemair narrative.

Another View on Systemair Using DCF

While the P/E of 22.4x suggests Systemair is roughly in line with its fair ratio, the SWS DCF model points in a different direction. At a share price of SEK85.9 versus an estimated cash flow value of SEK106.15, the stock screens as undervalued by about 19%.

This gap is sizable in practical terms. It implies the market may be pricing Systemair more cautiously than the cash flow model suggests, which could either signal a margin of safety or reflect risks that simple multiples do not capture. Which lens do you trust more when numbers disagree?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Systemair for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 265 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mix of optimism and caution around Systemair so far, it makes sense to move quickly, review the data yourself and decide how you feel about the risk and reward trade off. To help frame that view in a structured way, take a look at the 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond Systemair?

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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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