Profit surprised, while revenue came in close to forecast
Elm reported attributable net profit of SAR 778 million, 38.3% ahead of our forecast, on revenue of SAR 2.79 billion. Better revenue-sharing terms and higher gross margins helped Digital Business, and Thiqah returned to profit. Management lowered full-year revenue growth guidance to 14–16% as activity softened elsewhere.
Higher earnings estimates
We raised our FY2026 attributable profit forecast from SAR 2.28 billion to SAR 2.47 billion despite lowering our revenue expectations. The revised model assumes better profitability at Elm’s established platforms and Thiqah, while allowing for more normal operating expenses and working-capital demands.
Why we moved to Hold
We raised our 12-month target from SAR 640.12 to SAR 664.44. Against the SAR 598.50 close on 5 November 2026, the revised target implies 11.0% capital upside and about 13.6% expected total return including forecast dividends. That is below our 15% Buy threshold. We’ll watch whether Digital Business sustains its margins, Thiqah stays profitable and cash collections keep pace with earnings.
Sources and disclosures
The full update sets out the results, revised forecasts, valuation assumptions and disclosures. A fund managed by Evermore holds shares in Elm. The analyst has no personal holding.
Intended for US readers only. Forecast dividends are unannounced estimates. The price target and expected returns are estimates and are not guaranteed.