ChemoMetec: The Numbers Turn Before the Market Believes It

Most beaten-up growth stories deserve their gloom. ChemoMetec is the rarer case where the gloom is real but stale. The Danish maker of cell-counting instruments for biopharma manufacturing just reported its 2025/26 fiscal year, and the report lands after three years in which the market learned to expect disappointment. The numbers it released this week tell a different, earlier story: the operating setup is turning before most investors have signed up for a turn at all.

The scars are easy to find. ChemoMetec's counters are the hardware and the disposables used to count cells in vaccine and cell-therapy manufacturing, and during the pandemic that business boomed — only to fall apart when the boom ended. Instrument sales dropped roughly 20% in fiscal 2022/23 Instrument sales dropped roughly 20% as drugmakers worked through excess equipment and tightened spending. That was followed by an industry-wide freeze in biotech capital expenditure, high interest rates, and scarce venture funding. In March of this year, a guidance cut sent the stock down about 27% in a single week, the steepest slide among Nordic healthcare names at the time guidance cut sent the stock down about 27% in a single week, and analysts raced their price targets lower. If you had only that tape, you would reasonably conclude the franchise was broken.

The financial report published September 10 argues the opposite. Revenue fell within the company's guided range at DKK 511.1 million — up 3%, and up 7% once you strip out currency swings. Revenue fell within the company's guided range The growth was accelerating beneath the headline: third-quarter revenue rose 15% from a year earlier, after 8% growth in the first quarter third-quarter revenue rose 15% from a year earlier. Profitability never cracked. EBITDA rose to DKK 281.3 million from DKK 258.0 million, pushing the margin from 52% to about 55%, and net profit climbed to DKK 201.8 million. EBITDA rose This is a niche business printing nearly 55-cent operating profit on every crown of sales through a customer spending freeze that supposedly killed its market.

The reason the trajectory matters more than the 3% top line is what is changing underneath it. ChemoMetec's newer, automated XcytoMatic instruments are the strategic bet, and their revenue more than doubled this year, from DKK 27.7 million to DKK 61.8 million. Overall instrument and service sales grew 13% and 4% respectively, led by that ramp and the phasing out of older models being replaced by the new NC-203. The company guided next year to revenue of DKK 545-575 million and EBITDA of DKK 300-315 million — roughly 10% top-line growth at the midpoint, on top of a year that grew only 3%. That is the arc of a business exiting a low point, not one that just stumbled for the last time.

Why the market is still pricing the old story

The simplest explanation is that sentiment resets slowly. The market priced the post-COVID biotech capex collapse for three years, and a company that badly missed guidance as recently as March does not get re-adopted the moment one annual report arrives. That gap — negative perception on one side, an improving numerical reality on the other — is exactly where a contrarian edge sits, and it is also what makes this specific stock a test of discipline rather than a free pitch.

But discipline cuts both ways, and here is the honest crux that keeps this from being a cheerleading piece: the shares were never cheap. ChemoMetec has long been priced as a high-quality compounder, and it still is — the company's market value sits near DKK 9 billion, which is on the order of 40-45 times the year's profit, and materially higher than that on its free cash flow once you account for the cash it reinvests. It funds an ongoing share buyback and pays no dividend, entirely out of its own cash flow ongoing share buy-back programme, which is proof the model is self-sustaining. But a premium multiple means the market is not asking the company for a turn; it is asking the company to keep proving the turn, quarter after quarter. The entire rerating bet here is that improving numbers eventually get believed, not that the stock is a bargain someone has overlooked.

The sharpest measure of whether that belief is earned is the consumables business — the disposable cartridges and reagent kits that ride on every installed instrument. That is the recurring, razor-blade revenue an instrument maker lives on eventually, and it fell 4% this year Sales of consumables declined by 4%. That is not a red flag in isolation: it is the mechanical consequence of a year in which the razor sales jumped (new instruments placed now) while the monthly blades have not yet caught up. The proof path for the whole thesis runs through this one line item. If installed-base placements keep growing, consumables revenue should reaccelerate as the new XcytoMatic and NC-203 systems start chewing through disposables in daily production — and higher-margin recurring cash flow is what would make a 40x multiple begin to look reasonable.

What would break the case

The strongest bear argument is simple: the March miss, the frozen US market, and falling consumables all say the customer spending freeze is not actually over, and the guidance is one more optimistic forecast. Note that US/Canada is 54% of revenue and was down 6% in Danish kroner (flat at constant exchange rates) this year USA/Canada (54%); Europe and the rest of the world carried the growth. ChemoMetec is betting a lot on a US biopharma recovery that has not yet happened.

Two concrete developments give that bet a fighting chance. In August the company signed a collaboration with Roche Diagnostics to build a connection kit linking ChemoMetec's XcytoMatic 30 to Roche's Cedex Bio Analyzer, following a letter of intent from February collaboration agreement with Roche Diagnostics — an attempt to embed its counters inside big pharma's automated bioprocess monitoring rather than selling them as standalone boxes. That is the same logic driving management's push into automated, software-managed workflows for the cGMP manufacturing facilities where switching a validated instrument is costly and slow. It is a structural story, not a panic bounce.

For a retail investor deciding whether this belongs on a watch list, the honest read is: the expectations-reset setup is real — the market still prices a wounded biotech-capital-spending story while the product cycle, margins, and guidance are already pointing up — but you are paying premium prices for a company that must now deliver the reacceleration in actual quarters. Watch the consumables line. The moment recurring revenue starts growing behind the new installed base, the turn stops being a management claim and becomes something financially undeniable. A resumed slide in disposables, another US capex stall, or a guidance miss would reset the story back to the old one. I can be wrong again — compounders like this have humbled faster traders than me. But the numbers this week are turning before the market has agreed to turn with them, and that gap is where this story either gets made or gets broken.