· Siemens Energy is not in a normal cycle: global electricity build‑out is a multi‑decade trend

· Gas + grids are essential for data centers & renewables stability

· Strong growth: EPS expected to ~4× by 2028, margins expanding

· Risk remains at Siemens Gamesa, but core cash engines are solid

· Valuation cheaper than peers, attractive risk‑reward

The opportunity

Siemens Energy is an industrial company selling gas turbines and electricity grid infrastructure. At first glance, it looks like a classical cyclical industrial business. I believe that view is outdated.

We are not in a normal cycle. We are in a multi-decade electricity infrastructure buildout.

Gas is playing a vital role in meeting rising electricity demand, especially for data centers. While the market focuses heavily on nuclear energy as the long-term solution, the short- to medium-term supply of reliable power is largely coming from natural gas. Gas turbines can ramp quickly and provide the stability needed in renewable-heavy energy supplies.

The company is guiding for mid- to high-teens revenue growth and meaningful margin expansion through 2028. Earnings per share are expected to increase roughly fourfold by fiscal 2028. Operating leverage is significant.

The wind division, Siemens Gamesa, remains a risk and the turnaround is not fully complete. However, even with that overhang, Siemens Energy is trading at a discount to its direct peers GE Vernova and Mitsubishi Heavy Industries.

The valuation is not demanding, and if earnings develop as guided, profit growth alone can drive deliver an above- benchmark return.

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Business model overview

Below I’ve summarized the various business segments Siemens Energy operates in:

Gas Services: the cash engine

Gas Services primarily sells gas turbines and steam turbines. A gas turbine is a type of engine that generates electricity by burning fuel, usually natural gas, using the hot gases produced to spin a turbine, which then drives a generator. These turbines are widely used in power plants due to their efficiency and ability to respond quickly to changes in electricity demand.

The company also offers aeroderivative turbines, which are essentially gas turbines resembling jet engines. These units are installed next to data centers to provide immediate power. They function similarly to diesel generators but offer greater efficiency.

A steam turbine converts hot steam into electricity and is used in nuclear plants to generate electricity.

Three players effectively control the global heavy-duty gas turbine market: Mitsubishi Heavy Industries, GE Vernova, and Siemens Energy. Barriers to entry are extremely high due to technological complexity of these machines and decades of R&D that are baked into them.

A new company entering the market must invest billions to create a top-quality turbine, and customers need confidence that this newcomer can provide reliable service and maintenance on one of the most complex machines out there.

Gas Services is particularly attractive because in fiscal 2025, 64% of revenue came from maintenance and service contracts. The model resembles aerospace engines: hardware is sold at a lower margin, but long-term service drives high margins.

In fiscal year 2025, Gas Services generated about 70% of Siemens Energy’s total pre-tax free cash flow, while revenue only accounted for 31% of total.

Gas Services is the cash flow machine for Siemens Energy.

Grid Technologies: The Second Growth Engine

While Gas Turbines generate electricity, the Grid Technologies division ensures that electricity is transported safely and efficiently across the grid.

This division sells products and solutions that move power from generation sites to end users. Core products include:

• Transformers

• Circuit breakers

• Switchgear

• Grid stabilization equipment

Grid Technologies (GT) is the second-largest division within Siemens Energy, representing approximately 29% of group revenue.

Service accounts for just 6% of revenue, making this business unit reliant on new unit sales. As a result, its operations are more cyclical—if new orders decline, the company cannot depend on service revenue as a backup.

Demand is strong. At the end of fiscal year 2025, the division reported a backlog of €42 billion, approximately 4x annual revenue. This reflects structural demand rather than a short-term uptick. As per the graph below: GT had the highest revenue growth rate in fiscal 2025 (25%) of all business units.

What drives growth?

For gas services, the growth drivers are:

· Highly dispatchable: Gas turbines have become highly sought after, largely because gas-fired power is easy to control. Since a gas turbine can be started in just 10-20 minutes, it serves as an excellent backup when solar or wind energy falls short due to lack of sunlight or wind. Contrast that to a 6 -hour startup for a coal plant and ~couple of days for a nuclear plant.

· Coal to gas conversion: Coal-to-gas conversion is also contributing to growth. Combined-cycle gas plants are among the most efficient sources of electricity, surpassed only by hydropower. Additionally, gas-fired plants produce less CO2 than coal-fired ones. As a result, many coal-fired power stations are transitioning to gas-fired facilities, increasing the need for new turbines.

· Datacenters: Datacenters represent a significant source of demand. According to Goldman Sachs, 63% of the additional electricity required for new datacenters through 2030 is expected to be generated by gas-fired power.

For the GT business, growth can be categorized in three segments.

· Growth in electricity usage: Electricity usage is experiencing rapid growth, which requires expanding and upgrading power grids to manage higher demand. If current forecasts are accurate, electricity consumption will rise by 5.7% annually over the next five years. That’s one of the highest growth rates in history.

· Grid infrastructure is aged: Approximately 80 million kilometers of grid infrastructure need renewal or expansion by 2040 — roughly equivalent to the entire current installed base.

· Two-way street: Grids are no longer one-directional. They must handle decentralized generation from solar, wind, batteries, and distributed systems. This requires new switchgear, transformers, and grid stabilization equipment, everything that the GT business sells.

· Interconnectors: Due to current limitations in efficient storage of renewable energy, surplus electricity generated by wind or solar sources in one location should be allocated for use in other regions. To enable this, larger grid connections between regions are necessary; this is particularly relevant in Europe. As a result, new HVDC (High Voltage Direct Current) current lines are being constructed, which require additional switchgear, circuit breakers, and other equipment that GT sells.

Conclusion: both gas services and Grid Technologies are benefiting from long term structural trends that are dtronger than from past cycles. This will enable them to at maintain growth rates for years to come.

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Valuation vs Peers

On the outset, Siemens Energy appears to trade expensive. The next twelve months (NTM) PE ratio is currently 37. However, its direct competitors in the gas turbine market, Ge Vernova and Mitsubishi Heavy industries, are trading for 57 and 45.

I prefer to evaluate the PEG ratio, as companies with substantial earnings per share growth are justified in trading at higher multiples. Below I’ve calculated the NTM PE ratio divided by the consensus 5-year EPS growth rate, as it reflects long-term earnings trends without relying on predictions that are too far out to be accurate.

The consensus predicts EPS will be about €7 by 2028. If we use a next-twelve-months PE ratio of 37—which remains lower than major competitors—the projected price by the end of 2027 would be €288, representing a 47% compound annual growth rate (CAGR)

If Siemens energy would trade at the average NTM PE (43) of the peer set, then the stock could reach € 301 by the end of 2027, a 50% CAGR. This could be a nice setup to generate alpha in your portfolio.

Risks

· Siemens Gamesa: The main operational risk is Siemens Gamesa. In fiscal 2025, Gamesa generated negative cash flow of €3 billion. The recovery plan targets break-even by 2026 and 3-5% margins by 2028. If that turnaround fails, and Gamesa would for example still achieve negative 5% margins at the end of 2027, the EPS reduction would be ~€1, lowering the price to € 222 instead of € 288. So, even if Gamesa would still struggle, gas services and GT can still deliver a 41% return.

Execution risk is a key concern for Siemens Energy. Like Rolls-Royce and General Electric have experienced, design issues—such as flaws in engineering or unexpected technical setbacks—or making large investments too late in a project’s development can lead to cost overruns, project delays, and ultimately, reduced profitability.

· Lower datacenter investments: If datacenter infrastructure investments would slow, then it could hit demand for gas turbines and grid technologies. However, the demand for electricity is much broader with EVs, heat pumps, and general electrification of things providing a structural floor to electricity demand.

· Fixed-price margin risk: Siemens Energy faces risk from old fixed-price contracts within its €146 billion backlog. While newer orders increasingly include indexation clauses to pass through inflation, the remaining “non-indexed” projects—particularly in Grid and Offshore Wind, could hit earnings if energy and commodity prices rise sharply.

Conclusion

Siemens Energy is very well positioned for the explosive growth in electricity consumption. This is not some regular cycle; it’s one of the highest electricity growth periods in history, besides the 1950s and 1960s when electrical appliances came on the scene.

Usually, Siemens Energy would be a cyclical business, profiting from a couple of years of growth and then deceleration. Considering the fundamental growth drivers, I think the opportunity is much larger.

Despite the inherent risks associated with industrial companies, I believe that the potential for growth makes this stock an attractive risk-reward opportunity. The current drop in its price due to the Iran conflict, presents a good entry point to acquire shares for a long-term portfolio.

The Trade Desk (TTD) is a company I hold in my portfolio, and its share price has been obliterated recently. The NTM (next twelve months) P/E ratio is currently 19.4, which is the cheapest NTM P/E multiple at which this stock has ever traded.

Is TTD in a Netflix-style freefall, similar to when Netflix fell after reporting a slowdown in subscriber growth in April 2022? The market clearly interpreted that slowdown as structural, sending Netflix shares down roughly 30% in a single day.

Are TTD’s problems structural, or is the market panicking? I am personally trying to determine whether to add to, hold, or sell this stock in my own portfolio.

For readers unfamiliar with (TTD): the company provides a platform that enables buyers—primarily advertising agencies—to purchase ads on the “open internet.” A brand can set a budget and advertise across multiple channels, such as connected TV (CTV), audio (podcasts), display ads, in-app placements, or retail media (e.g., Walmart Connect or Kroger Precision Marketing). The goal of the platform is to allocate a client’s advertising budget as efficiently as possible, directing spend to where it is most effective.

What happened to growth?

The core issue is that quarterly revenue growth has slowed, bottoming at 17.74% in the third quarter of 2025. Over the past five years, the median quarterly growth rate has been 25%, meaning the company is now growing materially slower than it has historically. This slowdown is the primary reason the stock has tanked: the market believes growth has stalled.

The Trade desk quarterly revenue growth rate (yoy)

Let’s take a closer look. TTD relies on advertiser spending; the business is cyclical and therefore susceptible to shocks in advertising budgets.

This is what Jeff Green said during the Q2 2025 earnings call:

“As I mentioned before, Q4 was relatively stable, though signs of volatility were building beneath the surface ahead of a contentious election cycle. That pressure intensified in Q1 with growing concern among clients.”

He then addressed the Q2 quarter:

“From a macro standpoint, some of the world’s largest brands are absolutely facing pressure and a degree of uncertainty. Some have to respond more than others to tariffs. Many are managing inflation worries and the related pricing that comes with that.”

In Q3, he echoed these conclusions. His view is that the lower growth rate is largely attributable to a more uncertain macroeconomic backdrop, driven by tariffs and broader macro volatility.

That explanation is plausible, as advertising spending can be highly volatile. In Q2 2020, TTD’s quarterly growth rate dropped sharply to -12.86% due to the pandemic shock. The beginning of 2025 also represented a relatively large shock, given the tariff environment and fears of a potential recession or economic slowdown. It is therefore plausible that advertisers reduced spending.

Furthermore, TTD has noted that excluding political spending, quarterly growth would have been approximately 22%. This adjustment matters because growth in Q3 2024 was exceptionally high (27.3%) due to political advertising. Excluding that effect, Q3 year-over-year revenue growth would have been closer to 22%. In that scenario, investors likely would not be panicking.

Is programmatic still taking share of overall advertising?

As mentioned, TTD is essentially a platform where brands buy advertisements on the open internet. The largest segment (about 50% of the business) is CTV (streaming television) advertising. If you look at the chart below, total U.S. CTV ad spend is still only 32% of total TV ad spend. This suggests the market is far from maturing. Projections indicate that CTV ad spend will roughly double by 2029 compared to 2024.

While CTV ad spend is still only 32% of total spend, CTV viewership already accounts for between 40–60% of total viewership. Conclusion: a majority of ad spend still needs to migrate toward CTV. Given the growth runway left for CTV, there is every reason to believe that TTD can maintain its CTV growth trajectory based on the total addressable market (TAM) opportunity. This does not point to stalling revenue growth for TTD.

Growth acceleration

In fact, one could argue that growth will accelerate in 2026. If you read the Q2 earnings call carefully, Jeff Green states:

“We are signing more multiyear JBPs, or joint business plans, than ever before with leading agencies and brands. In fact, the number of live JBPs is at an all-time high, and we continue to see spend under JBPs significantly outpace the rest of our business. What’s even more encouraging is the strength of our JBP pipeline, with nearly 100 JBPs in progress, many of them in the late stages of development.”

And:

“We see clearly what is on the horizon for our space, and we’re convinced we’re the best-positioned company in adtech to accelerate our growth in 2026.”

Talking explicitly about accelerating growth is not something management would do unless they were confident about future growth.

Audio

I believe another major growth avenue in the coming years is audio—not traditional radio, but digital audio such as Spotify, Pandora, iHeart, TuneIn, SoundCloud, SiriusXM, and similar platforms. TTD has integrations with all of them. This market is rapidly shifting toward programmatic advertising. As recently as April 2025, Spotify introduced its Spotify Ad Exchange, enabling advertisers to bid programmatically on Spotify’s audio inventory.

Demand for podcast advertising, in particular, is enormous. Jeff Green stated in the Q3 earnings call:

“Audio has become one of the fastest-growing channels as consumers spend an average of three hours a day listening to their favorite music and podcasts. Over time, I expect CTV and audio will grow as a percentage of mix, fueled by the premium authenticated nature of these channels.”

According to Digiday, programmatic buys on Spotify alone grew 58% year over year. Currently, most podcast ads are pre-recorded and therefore not tailored to the individual listener. Programmatic audio advertising enables ads to be served dynamically to specific listeners, significantly increasing value for advertisers compared to pre-recorded ads.

Considering how much time people spend listening to audio—while driving, exercising, or taking a walk—I agree with Green that audio is likely to become the second-largest channel after CTV.

According to eMarketer, programmatic audio spend is expected to reach $2.6 billion in 2026, representing a 17% CAGR since 2022.

In my opinion, audio has a big future, considering the engagement audio has during the day. One research in Australia for example finds that digital audio has a higher engagement then CTV:

While audio currently represents only about 5% of TTD’s business, the key takeaway is that audio is likely to become a meaningful growth driver—much like CTV has been in recent years—further cementing TTD’s long-term growth runway.

Amazon

A concern I often see among analysts and fellow writers is the perceived threat from Amazon’s own DSP (demand-side platform) and, to a lesser extent, Google’s DSP. Amazon operates its own DSP, allowing advertisers to buy ads directly through its platform. The issue is that Amazon and Google face a conflict of interest: they own both the buying platform and the inventory.

As a result, they have an incentive to direct ad spend toward their own properties. For Amazon, this includes Amazon Prime, Fire TV, and Amazon.com.

TTD, by contrast, does not own inventory and routes ad spend to the placements that deliver the highest value for the advertiser. Generally speaking, the ad auction process is less transparent within Amazon DSP compared to TTD. Since advertisers tend to favor transparent bidding processes, this creates a structural disadvantage for Amazon DSP.

One area where TTD’s neutrality clearly stands out is reporting. TTD provides log-level data for ad campaigns, offering detailed insight into when an ad was served, on which website or app, at what price, and to which ID.

Amazon, on the other hand, primarily provides aggregated reports. While some granularity exists, it is largely restricted to the Amazon ecosystem. In short, Amazon tells you how your ads performed; The Trade Desk lets you verify it yourself.

Another important point is that TTD shows how your bid compares to the clearing price—the price actually paid for an impression. This allows advertisers to assess whether they are overpaying or underpaying, which is valuable input for future bidding decisions. Amazon typically reports average CPMs, but not impression-level pricing. As a result, with Amazon DSP, advertisers cannot know with certainty whether an ad placement on an Amazon property represented better value than an alternative on the open internet.

Where Amazon Does Compete

Amazon is strongest when the shopper journey happens on Amazon. If a user browses on Amazon, searches for a product, or adds something to their cart, that information is very valuable to an advertiser. If that same user then watches content on Prime Video and later purchases something on Amazon.com, advertisers can clearly see that the ad worked. That is gold for marketers.

However, when a user does not have a meaningful “Amazon footprint,” the value of Amazon DSP declines.

I believe advertisers will therefore continue to use both platforms together: Amazon DSP for high-quality purchase data within the Amazon ecosystem, and The Trade Desk for reaching users across the open internet.

While Amazon is actively working to expand its access to the open internet, TTD still offers far greater breadth. It connects to tens of thousands of publishers, something Amazon cannot match. For example, TTD has partnerships with major U.S. retail media networks such as Kroger, Walmart, Target, and Instacart, as well as international retailers like Tesco in Europe. Through TTD, advertisers can run ads across multiple retail networks without having to connect to each marketplace individually.

Naturally, advertisers cannot access Walmart Connect via Amazon DSP—another consequence of Amazon’s inherent conflict of interest.

Why TTD’s Breadth Matters

TTD’s broad reach in comparison to Amazon delivers several important advantages:

• Omnichannel synergy:
  Campaigns that run across multiple channels tend to be more efficient than those limited to a narrow set of channels. Advertisers have a higher probability of reaching users throughout the day by combining CTV, audio, display, mobile, and other channels.

• Better price discovery:
  TTD participates in millions of ad impressions per second, allowing it to identify cheaper ads. In practice, this means routing ad budgets toward the highest-value opportunities.

• First-price auction optimization:
  In recent years, the ad tech industry has largely shifted to first-price auctions, where bidder A bids $10, bidder B bids $8, and bidder A pays $10. This differs from second-price auctions, where bidder A would have paid $8.01. In a first-price environment, accurately estimating the optimal bid is critical. TTD’s access to broad open-internet data allows its AI to predict clearing prices more effectively because it has broader acces to “liquidity” in the ad market. Amazon, with more limited access to the open internet, does not see the entire “order book,” to remain speaking in stock market terminology.

In short, TTD benefits from two major structural advantages: its neutrality and its breadth.

Competitive Perspective

It is also worth noting that Amazon DSP and Google’s DV360 have been around for a long time. DV360 has effectively existed for roughly 14–15 years, while the DV360 brand itself has been in place for about 7 years. Amazon DSP has been around for approximately 12–13 years, with the Amazon DSP brand existing for around 6–7 years. During this entire period, TTD has delivered exceptional growth.

My view is that Amazon is a competitive threat, and its efforts to expand access to third-party publishers bring it closer to TTD’s territory. However, in practice, it is not a full substitute. As an advertiser, you want breadth and liquidity in order to route ad budgets as efficiently as possible—and that remains TTD’s core strength.

Valuation and Conclusion

I believe the recent slowdown in growth appears far more likely to be the result of a temporary shock—driven by tariffs, macro uncertainty, and advertiser caution—than a structural change in the business. Advertising spend has always been cyclical, and nothing suggests that The Trade Desk’s long-term opportunity has materially deteriorated.

The addressable market remains enormous. CTV advertising is still significantly underpenetrated relative to viewership, programmatic advertising continues to take share, and audio is emerging as an additional growth runway. On top of that, management has indicated that Joint Business Plans (JBPs) are at all-time highs. It is difficult to reconcile that level of long-term advertiser commitment with the idea that TTD’s growth story is broken.

Concerns around competition from Amazon DSP and Google DV360 also appear overstated. Both platforms have existed for many years, during which The Trade Desk delivered exceptional growth. Their products are fundamentally different. Amazon DSP is extremely powerful for advertisers targeting users within the Amazon ecosystem, but Amazon does not own the broader retail landscape. If I were an advertiser, I would absolutely use Amazon DSP to reach Amazon shoppers—but I would still need The Trade Desk to reach the open internet at scale.

From a valuation perspective, expectations appear pessimistic. Analysts are projecting a non-GAAP EPS CAGR of roughly 16% for 2025–2028, materially lower than the 22% CAGR achieved from 2021–2024. In other words, the market is already pricing in a significant slowdown. If analysts are correct and 2028 non-GAAP EPS reaches $2.77, applying today’s depressed NTM P/E of approximately 19.4 would imply a stock price of roughly $54 by the end of 2027. From today’s price of $38.12, that represents a return of approximately 42%.

If, however, TTD is able to achieve an EPS CAGR closer to 20% over the next three years—below its historical growth rate but above current consensus—EPS would reach roughly $3.08 by 2028, starting from a 2025 EPS of $1.78. Applying a NTM P/E of 37, which is one standard deviation below the three-year average P/E of 51.2, would imply an end-2027 stock price of approximately $113, representing a 197% return from today’s levels.

TTD three year NTM PE

That scenario does not require a return to peak growth or peak valuation—only a partial normalization.

With pessimistic growth assumptions and a compressed valuation, downside appears limited, while upside remains substantial if growth only modestly re-accelerates.

Risks

The two main risks for the thesis are most probably:

• Prolonged macro weakness in advertising spend. If we assume that the decline in growth rates is not structural, but temporary due to macro weakness, then continued macro weakness could still hurt TTD’s future growth rates. TTD revenues have shown that they are sensitive to macro shocks, such as in Q2 of 2020, when growth turned negative at –13%.

• Walled gardens increasingly connecting advertisers with third-party ad inventory. This would occur if Amazon or Google increasingly offered ad inventory on properties other than their own. In that case, TTD’s moat—its reach—would weaken.

Still, given the risks, I think the risk–reward setup is fairly attractive. I rate the stock as a Strong Buy.

Disclosure: I am long The Trade Desk at the time of writing.

This article represents my own analysis and reflects how I think about long-term business fundamentals and risk–reward. It is not a recommendation to buy or sell securities.

If you enjoyed this deep dive, consider subscribing or sharing — and feel free to comment with questions or counterarguments.

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Have you ever wondered how all these injectable drugs are actually administered?
Enter Ypsomed — the Swiss company that is a leader in the global market for the devices used to deliver such medications.

Ypsomed is the one-stop shop for pharmaceutical companies developing drugs that must be injected rather than swallowed. While companies like Novo Nordisk still manufacture many of their delivery systems in-house, the trend is clearly toward outsourcing — and Ypsomed is the main beneficiary.

That shift stems from the increasing complexity of injection devices and the rapid rise of biologic drugs. For every new drug that comes to market, a regulator-approved delivery mechanism is required.

In this article, I’ll explain why Ypsomed is such an attractive business — and potentially a long-term compounder hiding in plain sight.

What Ypsomed Does

Ypsomed designs and manufactures injectors for the delivery of biologic medicines.
Their product line is fairly simple: autoinjectors and injection pens.

An autoinjector is a single-use device that hides the needle and administers a fixed dose at the push of a button — conceptually similar to the injection pens used for GLP-1 drugs like Ozempic or Wegovy.

An injection pen, on the other hand, is reusable. It uses replaceable cartridges and allows for flexible dosing, making it suitable for treatments that require regular injections.

Today, the global injector market is effectively a duopoly-like market. Most industry watchers still list SHL Medical and Ypsomed as the two leaders; who’s “leading” depends on the segment/metric.

In 2024, Ypsomed made a strategic decision to focus entirely on its Delivery Systems division, selling its Diabetes Care unit to Tecmed. The Delivery Systems segment currently generates about CHF 500 million in annual revenue and has grown at roughly 24% CAGR over the past five years.

The Growth Engine: The Biologics Revolution

Consensus expectations call for strong growth ahead, primarily driven by the global expansion of biologic medicines.

Biologic drugs are made from living cells or organisms, rather than being chemically synthesized like traditional medicines. They consist of large, complex proteins that closely resemble those found naturally in the human body. These molecules can target specific receptors or proteins involved in a disease process — allowing for more precise and effective treatments.

Because biologics can act with far greater precision, their share of the global drug market has risen sharply. In 2005, less than 20% of newly approved drugs were biologics; in 2022 that figure was 40% and today it’s more like 50%.

The popular GLP-1 treatments — Ozempic and Mounjaro — are also biologics. They mimic the GLP-1 hormone, which is naturally produced in the gut and helps regulate appetite and digestion.

As healthcare systems push for more at-home treatments, Ypsomed’s devices are becoming increasingly needed.

The Threat of Oral Alternatives

In September 2025, Novo Nordisk announced that its new oral GLP-1 pill produced “significant weight loss”. Since that announcement, Ypsomed’s share price has slipped about 25%.

Eli Lilly , Novo Nordisks main competitor, had already published results for its own oral candidate, Orforglipron, which showed lower efficacy than the injectable Zepbound. Novo’s oral version (announced in september) performed slightly better than Orforglipron — but still worse than injections.

Patients have grown comfortable with weekly injectors: the needle is hidden, the process is simple, and the results are stronger. If injections deliver better outcomes, why switch to a pill that must be taken daily?

There will certainly be a market for pills, but neither Novo Nordisk nor Lilly wants to cannibalize its lucrative injectable business. Type-2 diabetes has long shown that oral and injectable treatments can coexist — and the same pattern will likely emerge in obesity care.

Even Martin Lange, Novo Nordisk’s Chief Scientific Officer, agrees: “The injectable will continue to be the biggest seller, but the oral will be a substantial segment.”

Injectables will remain the stronger option for patients who need maximum weight reduction or tighter glucose control. Pills will cater to lighter cases or those unwilling to inject.

Even if that shift takes a small slice of growth; between 2025 and 2030, 27 blockbuster biologic drugs will lose patent protection. And biosimilar manufacturers, who compete mainly on cost, lack in-house device manufacturing capabilities — and will depend on companies like Ypsomed for injectors.

27 biologic molecules (drugs) are facing loss of patent. Source: Ypsomed capital markets day presentation.

And these biosimilars can’t be made into pills. By regulation, a biosimilar must be structurally and functionally equivalent to the original drug. If the originator is a protein delivered via injection, the biosimilar must follow the same route.

So yes — part of the GLP-1 market may shift toward pills. But injectables and orals will coexist, each serving its own segment. And Ypsomed still has a vast growth runway supplying the delivery systems behind the next generation of biologics.

Economics & Moat

At first glance, an autoinjector seems simple — just a spring-loaded needle that pushes medication under the skin. In reality, it’s a high-precision mechanical system where even small deviations in spring force, needle motion, or injection speed can cause the dose to fail.

That’s why injector design is tightly regulated. A new manufacturer would face 5–8 years of development and approval work and tens of millions in costs before bringing a product to market.

Ypsomed, by contrast, has decades of experience and operates a platform model:
the base injector design is already pre-approved, and only small adaptations are needed for each new drug. This dramatically shortens time-to-market for pharma companies who are developing a new drug.

Importantly, when the FDA or EMA approves a drug, it approves it together with its injector. That means pharma companies can’t simply swap delivery systems without restarting the entire approval process — creating strong lock-in for Ypsomed.

During the development phase, pharma clients pay Ypsomed “project revenue” for engineering work. Once the drug is commercialized, Ypsomed earns per-unit fees — that’s when the real profits start rolling in. Ypsomed refers to that revenue as commercial sales revenue.

At the moment, Ypsomed has zero commercial sales revenue from the incretin market (glp1 medicines). Even taking into account all the new growth in GLP 1, the company projects incretin to be approximately 30% of commercial sales in the midterm. This is an important point, because the market still thinks Ypsomed is really dependant on Novo Nordisk.

Growth Outlook

In the year ending March 2025, Delivery Systems revenue rose 30.4%, accelerating from a five-year CAGR of 24%. Management guides for CHF 1 billion revenue by 2029/30, implying about 15% annual growth. They target EBIT margins of 30% — roughly in line with today’s levels.

Personally, I think that forecast is conservative. With the strong biologics pipeline and the upcoming wave of biosimilars, it doesn’t make sense for the growth rate to slow relative to the past five years.

Valuation

Earnings per share will jump sharply in FY 2025–26, boosted by the sale of the loss-making Diabetes Care unit to Tecmed.

Per Koyfin data , the next twelve months (NTM) pe ratio is 23.9. In the last 5 years, the stock has traded around a 40 NTM pe, so it’s quite cheap relative to it’s historical valuation.

For a business growing 15–20% annually with 30% EBIT margins, that looks very reasonable.

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Why So Cheap?

The problem is that the market still views Ypsomed as a company dependent on Novo Nordisk. As mentioned earlier, the stock fell sharply after the announcement of the oral Wegovy trial results. Investors seem to believe the threat from oral pills is immediate — which, as we’ve discussed, is far from the case.

You can also clearly see that Ypsomed’s share price has tracked Novo Nordisk’s decline since July 2024, when Novo’s stock started to fall. I expect Ypsomed could rebound strongly once the market realizes that this company is not dependent on Novo Nordisk or GLP-1 drugs.

Ypsomed share price declines in tandem with Novo Nordisk.

Risks

The risks to the thesus I would say are:

• Production-line delays: Dependence on external suppliers of assembly lines could temporarily slow capacity expansion.

• Margin pressure during scale-up: High CapEx and new-plant ramp-up may weigh on margins in the near term.

• Cash-flow timing: Heavy investment means free cash flow likely won’t turn positive until FY 2028/29 (Source: Ypsomed)) — a risk if credit markets tighten or a downturn hits.

• Threat of oral pills, for the moment not likely.

• Dependence on pharma clients’ drug success and launch timing. If a lot of drugs currently in clinical testing doesn’t get approved, Ypsomed may earn less revenue from commercial sales later on.

Key Takeaway

Ypsomed is at the start of a multi-year growth runway, fueled by the global rise of biologic medicines. With 30% margins, mid-teens to 20% growth, and a NTM P/E of ~24, the risk-reward looks attractive.

As more pharma companies outsource injector production and the market realizes Ypsomed’s limited dependence on Novo Nordisk, the stock could rerate sharply higher.