Kongsberg Gruppen walked into Q3 2026 earnings with a stock that had already climbed strongly over the past quarter, closing at NOK352.7 just before the release. The headline was clear. Revenue for the quarter reached NOK10,842m and net income excluding extra items came in at NOK1,483m, while the order book stretched to NOK174.2b. Yet the real story for investors is the sentiment gap. A market paying a P/E of about 61x is reacting to growth momentum and a huge backlog, not just one quarter of clean operational delivery.
Love Kongsberg Gruppen's hefty NOK174.2b order book but uneasy about paying roughly 61x P/E for that growth momentum? Compare it with other high quality businesses that pair strong fundamentals with more measured valuations in our 194 high quality undervalued stocks
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs. Q3 2025):NOK10,842m vs. NOK13,302m (decline of 18.5%)
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Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025):NOK1,483m vs. NOK1,697m (decline of 12.6%)
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Basic EPS (Q3 2026 vs. Q3 2025):NOK1.69 vs. NOK1.93 (decline of 12.4%)
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Trailing 12-Month Net Profit Margin (Q3 2026 vs. prior 12 months):15.2% vs. 12.0% (up 3.2 percentage points)
Kongsberg's order backlog just hit NOK 174bn. Ask Charlie what Kongsberg's record backlog says about future earnings .
Evaluating Kongsberg's Missile Capacity Milestones
The bullish story hinges on Kongsberg Gruppen turning heavy factory spend into reliable, higher margin missile output rather than just a swollen backlog.
"The main factor that has to go right is that Kongsberg Gruppen executes its high PP&E investment program and new missile factories on time and on budget so the company can deliver the larger order book at healthy margins."
Q3 gives hard evidence on execution. Missiles & Aerostructures revenue reached NOK4.0b and EBIT NOK500m, while group EBIT margin sat at 16.4% despite dilution from Zone 5. Order intake of NOK23.3b lifted backlog to NOK174.2b, with management confirming new missile facilities in the US and Australia are progressing as planned.
That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for .
Bear Case on Kongsberg Margins Meets Mixed Evidence
The harshest critics focus on whether Kongsberg Gruppen's missile expansion erodes profitability even as orders pile up.
"Despite industry enthusiasm around high volume missile production and the acquisition of Zone 5 as an affordable mass missile platform, guidance for single digit profit margins at Zone 5 over the next 12 to 24 months and the sizeable cash outlay for this deal raise the risk that the shift toward volume missiles dilutes group EBIT margins and extends the payback period on invested capital."
Q3 partly validates that concern. Missiles & Aerostructures margin dropped to 11.6% from 16.5% as Zone 5 and related personnel costs weighed. At the same time, group EBIT margin reached 16.4% and operating cash flow of NOK4.1b lifted net cash to NOK6.4b. So missile dilution is real, but so far contained at group level rather than spiraling into a broader margin or liquidity problem.
Hunt For Mispriced Execution Stories
Kongsberg Gruppen shows how sentiment can adjust when investors focus on backlog and margins instead of a single quarter of figures. The real opportunity could be spotting stocks that look mispriced before expectations reset.
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Company 1 - 47% below our estimate - expands new leisure centres while leaning on booking, dynamic pricing and AI tools to support returns.
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Company 2 - 44% below our estimate - turns a large backlog of complex infrastructure work and multiple mega-projects into construction revenue.
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Company 3 - 40% below our estimate - pushes coconut-based beverages from niche to mainstream while scaling private label contracts and broader retail distribution.
Three companies from the same screener. Open every one of the 194 undervalued companies on it →
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.
Companies discussed in this article include KOG.OL .
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