Epiroc just dropped its Q2 2026 earnings with the stock closing at SEK247.8, after a weak stretch that left the 7 day return down nearly 4% and the 30 day move lower by just over 3%. The headline is clear: Revenue reached SEK16,702m and basic earnings per share came in at 2.01 SEK, while the real story sits in how those profits stack up against a rich 33.9x trailing P/E that already prices in a lot of mining optimism.
Like the quality of Epiroc’s mining exposure but uneasy about paying a rich 33.9x P/E after this earnings print? Scan the 195 high quality undervalued stocks.
Q2 2026 Earnings Summary
- Revenue (Q2 2026 vs Q2 2025): SEK16,702m vs. SEK15,130m (up about 10%)
- Net Income (Excl. Extra Items, Q2 2026 vs Q2 2025): SEK2,431m vs. SEK2,098m (up about 16%)
- Basic EPS (Q2 2026 vs Q2 2025): SEK2.01 vs. SEK1.74 (up about 16%)
- Trailing 12-Month Net Income Margin (Q2 2026 vs Q2 2025): 14.2% vs. 14.1% (slight margin improvement)
Orders are booming but cash flow is lagging at Epiroc. Ask Charlie what’s holding back Epiroc’s cash flow conversion.
Epiroc’s Bull Case Meets Early Margin Milestones
The bullish story hinges on Epiroc turning its tech heavy footprint into stickier, higher margin business rather than just more metal shipped.
"Cost efficiency programs, footprint consolidation and use of global hubs such as India, combined with active tariff and input cost mitigation, are aimed at protecting profitability so that revenue growth from mining and infrastructure can translate more effectively into operating profit and cash flow."
Q2 shows that idea starting to land. Revenue expanded to SEK16,702m while net income excluding extra items and EPS both rose about 16%. The trailing net income margin sits at 14.2%, slightly above 14.1% a year ago. That confirms early operating leverage, even if margin progress is still incremental rather than explosive.
The price and this Narrative do not agree. → Uncover what this Narrative says Epiroc is actually worth.
Epiroc bear case: cost shocks still unproven threat
Bearish investors worry Epiroc’s margin story cracks when external costs bite and pricing lags customer resistance.
"Rising input costs, such as tungsten prices that more than doubled in 2025 and tariffs that reduced the group operating margin by just below 0.5 percentage points in Q4, highlight how sensitive the model is to external cost shocks. If pricing actions lag or customer resistance increases, this could dilute both revenue growth quality and earnings."
The latest quarter shows adjusted operating margin at 20.4% compared with 19.0% a year earlier, with strong flow through above 50% and Tools & Attachments hitting its best margin since early 2024. Cost inflation and tariffs are clearly live issues, yet so far the evidence points to successful pass through rather than visible margin dilution in these numbers.
Hunt For Quiet Mispricings
Epiroc just showed how a solid operational story can still sit against a full valuation. The real opportunity is spotting stocks that could be undervalued before the rest of the market catches up.
- Company 1 - 33% below our estimate - uses a digital farming platform and higher margin specialty inputs to tighten grower relationships as debt refinancing extends liquidity.
- Company 2 - 30% below our estimate - expands from a domestic IT reseller into larger AI-led and overseas projects as new acquisitions integrate into its service model.
- Company 3 - 37% below our estimate - turns a once fragmented multinational aircraft program into a single industrial platform that now secures long term commercial and political backing.
That is three of the list. See all 195 potentially undervalued companies →
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