Tomra Systems came into Q3 2026 earnings as a high-expectation recycling and collection technology stock, yet it closed at NOK94.5 on Friday with only modest gains over the past month and a weak 90 day return. The fresh quarter put one thing in lights: profit quality improved far faster than sales. Revenue reached €366m for the period while EBITDA jumped to €47m, powered by a Collection division that delivered strong volume and cash generation. The share price reaction looks muted next to that earnings reset, which leaves investors weighing whether the margin recovery story is being underpriced.
We appreciate the cleaner EBITDA profile at Tomra Systems, although we remain cautious about the possibility that the market may be underestimating the risks associated with margin recovery. Compare it against other cash-generative operators in our list of solid balance sheet and fundamentals stocks (204 results)
Q3 2026 Earnings Summary
-
Revenue (Q3 2026 vs Q3 2025):€366.0m vs. €306.0m (up 19.6%)
-
Net Income (Excl. Extra Items, Q3 2026 vs Q3 2025):€24.0m vs. €14.0m (up 71.4%)
-
Basic EPS (Q3 2026 vs Q3 2025):€0.08 vs. €0.05 (up 60.0%)
-
EBITDA (Q3 2026 vs Q3 2025):€47.0m vs. €30.3m (up about 55%)
Tomra is betting big on being the UK deposit-scheme leader. Ask Charlie what Tomra's UK rollout means for long-term growth .
Evaluating Tomra Systems' DRS Conversion Milestones
At the heart of the bull story for Tomra Systems is whether early DRS rollouts are actually turning into the sticky, higher margin revenue stream investors are banking on.
"The main thing that has to go right is that Tomra Systems converts its current wave of DRS rollouts, recycling projects and Food division interest into sustained order intake and recurring high margin service and software revenues."
Q3 gives tangible progress on that ambition. Collection delivered €217m of revenue with a roughly 41% gross margin and €36m of EBITDA, while operating cash flow for the group reached €112m. New UK agreements, including the letter of intent for about 2,000 reverse vending installations, show that the project pipeline is moving into contracted deployment.
That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for .
Tomra Systems Margins Improve, Mix Concerns Linger
The bearish view on Tomra Systems hinges on mix dilution in Collection and Food rather than headline growth.
"Although Tomra Systems is set to install a large number of reverse vending machines in new deposit markets such as Poland and the UK, the company already guides Collection gross margin only to about 40% for 2026 because of a higher than expected share of lower margin RVM and Polish volumes."
Q3 Collection gross margin of 40.8% and EBITDA of €36m indicate that margin pressure has not derailed profitability. However, guidance for about 40% Collection gross margin for 2026 and management's own mix commentary suggest that the structural concern is not resolved and is instead being managed more effectively at present.
Hunt For Mispriced Earnings Power
Tomra Systems just showed how a cleaner profit story does not always translate into an immediate share price shift. The real opportunity is spotting stocks that could be undervalued before stronger fundamentals are fully reflected.
-
Company 1 - 18% below our estimate - targets high-demand connectivity contracts as tailored products and subscriptions steer hardware buyers toward software and service bundles.
-
Company 2 - 23% below our estimate - leans into prepared and packaged foods so household spending shifts toward higher margin branded staples and discretionary treats.
-
Company 3 - 49% below our estimate - supplies live gaming tables and content that betting operators integrate deeply and pay ongoing commissions per chip and spin.
That is three of the list. See the full list of 192 companies trading below our fair value estimates →
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 TOM.OL .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
