LIND RESEARCH
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Memo | Premium Equity Research
Market Overreaction Creates an Attractive Entry Point
We are adding our first position to the portfolio. It’s a Swedish-listed SaaS microcap company named Physitrack (PTRK) whose share price is down down 46% from its 6-month high.
Why has the share declined from an already modest valuation level? Well, actually, for no apparent reason other than the company's strategic decision to right previous wrongs, which affects the reported numbers in the short term. Is it bad to remove unprofitable and less scalable revenue streams? Well, at least we do not think so.
Our view is that the company's intrinsic value far exceeds its current depressed valuation, supported by the core segments' high-quality and likely value to a professional acquirer. Underneath the clutter is a SaaS product with minimal churn, untapped pricing power growing by +15% per year, with strong profitability, and increasing cash flows.
Currently, the market is selling everything SaaS, which, in combination with low interest in Swedish microcaps, creates this opportunity.
In 2026, we see multiple catalysts that should narrow the current value gap, including likely breakthrough orders in the USA, further strengthening of cash flow, and more.
As the saying goes, “When there is blood on the streets, buy”. And that is what we are doing…
Portfolio Buy
We have previously published extensive research on PTRK since our first Deep Dive on the company in May last year; see this link.
As we have now launched the real-world portfolio and PTRK's share has been declining for no apparent reason, we believe this creates a fantastic opportunity to purchase at a discount to intrinsic value.
Action: Lately, we have been buying PTRK and posting it to our premium members. Our first purchase was around 11 SEK; since then, the price has continued to decline, with no clear explanation beyond a market meltdown related to SaaS. We bought more when the share price approached SEK 9. Current GAV at SEK 10.66, and it stands for 14.2% of the portfolio. Overall, we believe this is the right sizing given the significant value opportunity we see.
Price target: We believe the share is worth 25-30 SEK. But when it crosses above 20 SEK again, we will evaluate whether to take profits.
Re-evaluate: If the share price drops below 8 SEK, I need to revisit my thesis and determine whether the market is correct and I am mistaken.
Company description:
Physitrack (PTRK) is a microcap company listed on Nasdaq Stockholm First North. In 2025, the company had revenues of EUR 13.5m, of which 89% was recurring, and cash flow from operations of EUR 1.1m.
During 2025, the company underwent a significant transformation by cutting and divesting low-margin businesses within the Wellness division. We have written extensively about the company, so we recommend reading our Deep Dives and research reports for more background.
Situation
2025 transformation: 2025 has been a year of transformation for PTRK. Low-margin operations have been divested, investor disclosures have improved, and the focus on profitable growth has been strengthened.
Sold off, no news: The share has sold off sharply on slim volumes and no real news. We think the sell-off was due to a slightly weaker Q3 report on Lifecare license development. The preliminary results released on Thursday indicate that everything is in order and that cash flow is strong and improving.
SaaS fear and microcap slum: Like all micro/small caps in the Nordics, PTRK has been affected by low interest, compounded by the recent sell-off in SaaS-related companies.
Opportunity
Low substitute risk from AI: We feel that there is no “vibe” coding risk for PTRK, on the contrary, they are using the new AI coding tools to make the development more efficient. This has also been confirmed by the company, as evidenced by declining CapEx. We believe Lifecare is protected by substantial switching costs stemming from its role as a system of record and will remain so. Is it likely that a physiatrist will bother with vibe coding an alternative? Nah, they will focus on taking one more client and get about 5x the monthly price of the license subscription (on that customer alone).
Pricing Power: The main product costs about $15 per year. We consider this price extremely low relative to the value a physiotherapist provides. Therefore, over the long term, prices are likely to increase by 2-3x. This will help the growth and profitability. The earlier price increase has not resulted in any material churn.
Lifecare quality undercover: We firmly believe the quality of Lifecare does not fully shine through. A comparable small-cap Nordic SaaS trades at 2-3x Lifecare's multiples, and that will change in 2026 as Wellness has been cleaned up and fewer adjustments and one-off costs will fizzle out.
To prioritize cash flow and profitable growth: PTRK has shifted from an earlier growth-focused mindset to a profitable growth focus. This is evident in the FCF improvement in 2025, from -$0.6m. to $1.1m. That is a full $1.7m improvement. FCF margins next year will likely trend around 20-25%.
Valuation
We believe PTRK's intrinsic value is in the range of 22-25 SEK and will continue to grow over the coming years. Our valuation is based on a simple SOTP, where almost all value is ascribed to Lifecare. We value Lifecare at a 15x multiple on our 2027E EBIT estimate, then discount the value to today at a 20% WACC. A valuation is never an exact science, but we can firmly state that PTRK is significantly undervalued at current levels.
Catalysts to watch
Here are the catalysts we think will help close the value gap in PTRK during 2026.
USA deal: Hiring activity remains high in the USA, as indicated by LinkedIn posts and job postings. We think it’s plausible that a larger deal or order could be announced from the USA in the coming months.
No more adjusted numbers in 2026: Most investors do not dig deeper than the headline numbers. For PTRK, which has undergone significant changes, one must dig deeper to understand the business's underlying development. We expect the adjustments to decrease and, hopefully, be gone by 2026 and beyond for PTRK. We think that will help the market price the company correctly.
Cash flow focus: It’s clear that PTRK is focused on profitable growth with improving cash flows. We think the upcoming reports will reinforce this trend and help fuel a revaluation.
Potential acquisition target: PTRK operates in a highly interesting niche that many larger healthcare software providers would like to tap into. The company's valuation is so low that it is the biggest barrier to receiving a bid.
Further Wellness changes: We hope management will thoroughly evaluate the remaining part of Wellness over the year and either sell it or close it if traction remains low. We believe it’s far better to reinvest in Lifecare and capture more of that market.
Further price increases: We believe there is significant untapped pricing power. Honestly, how many would shift their system even at a 2x increase when they have years of patient data, etc? We hope to see more price adjustments in 2026, with growth to follow.
Key risks
We do not see an AI-coded product as a substitute or a risk, and in our view, the company is on the correct strategic path for value creation. Free cash flow has turned positive, and we do not see any risk for a capital injection at depressed share prices.
We think the key risk here relates more to the current market environment than to actual business risks. The market can remain in its current depressed state and continue to misprice PTRK. Obviously, in a microcap like this, liquidity is a major risk, and PTRK is thinly traded.
Disclaimer
This analysis represents the independent views of Lind Research and is based on publicly available information believed to be reliable, but no warranty is given as to its accuracy or completeness. Nothing herein is investment advice or a recommendation. We publish openly, and companies do not influence our conclusions. Lind Research may hold positions in securities discussed.
Analyst owns shares? Yes
Lind Research