skip to Main Content
Get your free newsletter: Actionable insight each morning for self-directed investors. 

I have not seen a Finnish stock almost double in a month at this market capital size of over 1 billion euros – maybe ever – then it happened again. Qt Group (www.Qt.io), the Finnish software maker, has already had the best year in the history of its brief public trading career since 2016.

Demerged out of Digia Oyj on May 2nd 2016 (both are ex-Nokia companies) it has been quietly trading for years until December 31st, 2019 at around €21 euros, with a 52-week range of 179.8 – 50.8. The stock closed at 128.4 with market cap of €3.2 billion on December 15th 2021. Finnish analysts have target prices at the 160 level.

After Q2/21 CEO Juha Varelius confirmed that the Q2 quarter was excellent, but Q3/21 was always going to be weak and that Q4/21 will be great again. Investors are probably best taking a wait and see posture, to see if there is another pull back before committing new money or starting a new position on this stock.

Qt Group is a stock where I would use any pullbacks to get in and ATHs to trim the position. This is especially so in December after the US Fed has not raised rates yet – I would start buying at levels below 140 using the 120 level as a stop. If the stock breaks under 100 – I will wait few quarters. Note that Qt Group is thinking about listing in the USA after it has established itself at the 4-6 billion market cap level. The stock is up 147% in 1-year and 123% YTD.

Subscribe for more stories like this, 8am weekdays - for free!


Qt Group numbers exceeded expectations

Qt Group issued guidance for full year 2021 results with close to 40-50% topline/bottom line growth. All five Finnish analysts raised their targets to around 160 euros again after the fact. Inderes’ CEO and Head Analyst Mikael Rautanen was so “bullish” on the company that he had problems staying calm. It is possibly the best Finnish growth company of his generation since Nokia. Qt Group has been added to the Eurostoxx 600 index and the Nasdaq OMX25 Finland index. Foreign ownership has risen from 20% Q4/20 to Q2/21 to 31%.

Qt Group launched the newest version of its software – version 6.0 – to Qt Group developers in October 2020. The license sales will force the developers to activate version 6.0 in a few years, which means 40-50% topline/bottom line growth for more than a few years to come. The growth is almost 90% guaranteed with this upgrade. The company has a captive market.

What’s the secret to Qt Group’s success?

Qt Group is a global software company with a strong presence in more than 70 industries and is the leading independent technology behind millions of devices and applications. Major global companies and developers use Qt worldwide, and the technology enables its customers to deliver exceptional user experiences and advance their digital transformation initiatives. Qt achieves this through its cross-platform software framework for the development of apps and devices, under both commercial and open source licenses.

Approximately one million developers use Qt technology worldwide. Qt enables a single software code across all operating systems, platforms and screen types, from desktops and embedded systems to business-critical applications, in-vehicle systems, wearable’s and mobile devices connected to the Internet of Things.

The client list is full of S&P 500 companies: cars (Mercedes-Benz, Peugeot etc.…), Rockwell Automation, Sky and LG to name a few. CEO Juha Varelius told the market that many S&P 500 companies that are Qt clients do not want to disclose that they use the software.

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Raine Lahtinen

Raine Lahtinen

Raine Lahtinen has spent over 25 years in wealth management and trading. His active investment days started when he attended University of Miami 1987-1991 majoring in International Finance and Marketing. He has experienced the highs and lows of the stock markets since the 1987 crash, Dot.com bubble 2001-2002, the 2008 financial crisis and the current record breaking rally.

Since 1995, Raine has been based in Brussels, Belgium in Continental Europe as an international financial advisor and director of investments in various UK IFA firms. He has written many popular columns about markets and investments during his professional life. His passion is finding undervalued listed stocks. As a Finnish native he specializes on Nordic and US stocks.

Stocks in Focus

Here are some of the smaller companies we are following most closely. They all represent significant growth stories in our view. Our in-depth reports go into more detail on why we like them.

Comments

Subscribe for more stories like this, 8am weekdays - for free!


Get your free daily newsletter: 

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Pepperstone
FP Markets
IG
Spreadex
WisdomTree
ActivTrades
Back To Top