Hacksaw (OM:HACK) Stock Faces Earnings Quality Questions After 76.8% Net Margin In Q2 2026

Hacksaw (OM:HACK) has posted Q2 2026 results with revenue of €59.3 million and basic EPS of €0.158, alongside trailing 12 month revenue of €224.0 million and EPS of €0.595 that reflect earnings growth of 61.8% over the past year. Over recent quarters, the company has reported revenue increasing from €45.4 million and EPS of €0.111 in Q2 2025 to €59.3 million and EPS of €0.158 in Q2 2026, with trailing net profit margins at 76.8% versus 62% a year earlier. This sets a high bar for how investors assess the quality and persistence of these margins.

See our full analysis for Hacksaw.

With the headline numbers reported, the next step is to compare these results with the most common narratives around Hacksaw to see which stories are supported by the data and which might warrant a reassessment.

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TTM net income of €172 million points to very high profitability

• Over the trailing 12 months, Hacksaw reported net income of €171.96 million on €224.01 million of revenue, which matches the quoted 76.8% net profit margin and is higher than the €106.27 million of net income on €171.42 million of revenue a year earlier.
• What stands out against the bullish narrative is that this very high margin is also flagged as relying heavily on non cash earnings. While bulls focus on strong cash flow conversion and a target to return at least 75% of net income to shareholders, the quality of the €171.96 million profit matters for how sustainable those returns really are.
  • Bullish analysts point to earnings growth of 61.8% over the past year and forecasts for earnings to grow about 23.9% per year. However, a large non cash contribution means investors may want to look more closely at how much of that growth translates into repeatable cash profit.
  • The trailing 12 month EPS of €0.595 sits below bullish expectations for EPS of €1.46 by around 2029. This heavily supports the optimistic view on earnings expansion but also makes the composition of today’s earnings a key check for that story.

Bulls point to rapid earnings growth and rich margins as proof Hacksaw can keep compounding profit, while the filing data reminds you to check how much of that €171.96 million actually comes from the core business before leaning too hard into the optimistic story 🐂 Hacksaw Bull Case

Sequential EPS steadies around €0.16 while growth forecasts stay high

• On a quarterly view, basic EPS has stayed close to €0.16 in 2026 so far, at €0.158 in Q2 and €0.157 in Q1, compared with €0.111 in Q2 2025 and €0.100 in Q1 2025, while quarterly revenue moved from €44.96 million in Q1 2025 to €59.29 million in Q2 2026.
• The consensus narrative talks about revenue growing 28.9% per year over the next 3 years and earnings reaching €327.3 million. This steady EPS level near €0.16 gives some support to that view but also shows that the step up from here would need to be significant.
  • Consensus expects profit margins to be broadly stable, nudging from 73.6% to 72.8%. This fits with the current 76.8% net margin but implies that most of the earnings increase to €327.3 million would have to come from higher revenue rather than further margin expansion.
  • The trailing 12 month EPS of €0.595 compared with the consensus EPS target of €1.00 suggests the company would need to add roughly two thirds more earnings per share versus today, so investors may want to compare that gap with the recent pace of quarterly EPS gains.

Valuation gap versus DCF and targets meets bearish quality concerns

• At a current share price of SEK71.60, Hacksaw trades on a P/E of 10.9x compared with a European Entertainment industry average of 14.1x and a peer average of 61.8x, while the DCF fair value is quoted at SEK311.04 and the allowed analyst price target is SEK103.65.
• Bears argue that a high share of non cash earnings and the growth of lower margin OpenRGS content could limit future margin expansion. The combination of a 76.8% trailing net margin and a P/E discount to peers gives some backing to that caution because it suggests the market may be treating the current earnings level as harder to sustain.
  • Bearish analysts still forecast revenue growth of 23.5% per year and higher earnings by around 2029, yet the current 76.8% margin and reliance on non cash items line up with their view that future margins could settle below today’s level if OpenRGS keeps gaining share.
  • The gap between the SEK71.60 share price and the DCF fair value of SEK311.04, plus the analyst target of SEK103.65, sets up a large implied upside, but the flagged earnings quality risk explains why some investors may hesitate to fully accept those valuation signals.

Skeptics point out that a low P/E and a DCF fair value far above SEK71.60 only help if the 76.8% margin and €171.96 million of net income are backed by durable cash flows rather than accounting driven items, which is at the core of the more cautious narrative 🐻 Hacksaw 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 Hacksaw on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If sentiment around Hacksaw feels mixed after these results, that is the point. The data supports both concerns and optimism, so weigh the trade offs for yourself and review the balance of 5 key rewards and 1 important warning sign

See What Else Is Out There Beyond Hacksaw

Hacksaw's high P/E gap to valuation models, heavy use of non cash earnings and questions over margin durability all point to meaningful earnings quality risk.

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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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