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CADLR
Cadeler

Cadeler set to grow with market.

Published
28 Jul 25
Updated
31 Aug 25
Mandelman's Fair Value
NOK 95.36
43.9% undervalued intrinsic discount
01 Sep
NOK 53.50
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1Y
-29.0%
7D
5.0%

Author's Valuation

NOK 95.3643.9% undervalued intrinsic discount

Mandelman's Fair Value

Narrative
Updates1

Last Update31 Aug 25
Fair value Decreased 39%

Q2 2025 Update

  • Cadeler reported very strong revenue growth in H1, with EUR 298 million (vs. EUR 82 million in the prior year), including a one-off payment of EUR 110–120 million related to the Ørsted cancellation. Excluding this one-off effect, year-on-year growth exceeded 100%.
  • Management has raised its full-year revenue guidance (including the Ørsted cancellation) to a range of EUR 588–628 million. In addition, EBITDA guidance for FY 2025 has been revised upwards to EUR 381–421 million.
  • The Company noted some delays in new projects commencing in 2027–2028. However, Investor Relations clarified that this does not reflect a contracting market but rather a shift in timing:"[.....] In short, we do expect to be able to maintain and even to grow our current backlog over the coming years. Our most-recently disclosed backlog figures were stable quarter-on-quarter even accounting for the suspension of the Hornsea 4 project by Orsted (and the cancellation of the related long term agreement for an A-class vessel, with several hundred million euros removed from the backlog). You should therefore think of our messaging around 2027-8 as relevant more to the rate of revenue/margin growth during that period than to revenue/backlog stability."This supports the Catalyst thesis set out below.

Changes to the valuation model.

  • Given the adjusted revenue outlook, I increase expected revenue growth from 27% to 30%, projecting that Cadeler will reach EUR 1 billion in rolling-12 revenue around mid-2028, after which growth is expected to slow.Exceptional high margins are expected to normalize as indicated in the IR response above (although analysts still forecast 30–40%), and I reduce the net margin assumption from 27% to 22%.Overall, the stock remains very attractively valued, trading below 10x PE – still a compelling buy.
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Catalysts

  • Structural market tailwinds: Offshore wind installations are projected to grow from approximately 8 GW in 2024 to 34 GW by 2030 (28% CAGR), supported by strong policy initiatives in the EU, U.S., and China targeting over 400 GW of capacity. Source.
  • Fleet expansion: Cadeler operates 7 wind installation vessels as of mid-2025 and is on track to expand its fleet to 11 vessels by the end of 2027, enabling it to meet increasing global demand while also increasing utilization on existing fleet.
  • Record-high order book: Cadeler has secured approximately €2.5 billion in contracts extending into 2029, offering high forward visibility in vessel utilization compared to cyclical oil and gas rig operators.
  • ESG and contract model advantage: Cadeler benefits from multi-year, fixed-price contracts, access to green financing, and limited vessel supply—factors that position it more favorably than fossil-fuel rig peers exposed to volatile day-rate markets.

Assumptions

Revenue Growth Outlook

  • 3-year CAGR (2021–2024): ~3% (coming from high growth territory)
  • 5-year CAGR (2019–2024): ~33%
  • 7-year CAGR (2017–2024 estimate): ~30%,
  • Forward (2025–2029): A 25–30% CAGR remains a reasonable assumption based on industry growth, backlog, and fleet expansion. The base model assumes 27%, supported by strong backlog and fleet expansion.

Net Margin Outlook

  • 3-year average (2022–2024): ~23%
  • 5–7 year average (2020–2024): ~ negative 2%, reflecting early-stage losses
  • Forward (2025–2029): With full fleet deployment and operational efficiency, margins are expected to stabilize at 27% (comparing with Factset estimates @ 33-40% margins). 27% is the assumption used in the model.

Risks

  • Vessel non-performance or delivery delays: Newbuild delays or technical challenges could impact project execution or shift revenue recognition. However, Cadeler’s backlog-based contract model limits short-term exposure.
  • Execution risk post-merger: The merger with Eneti increases operational scale but introduces integration and coordination challenges across fleets, systems, and geographies.
  • Macroeconomic and policy volatility: Higher interest rates, inflation, and supply chain constraints—especially turbine delivery issues—could affect the pace of offshore wind deployments and the timing of revenue.
  • Risk of new entrants, pushing down margins similar to those of traditional hydrocarbon rig operators.

Valuation Considerations

  • A forward P/E multiple of 15x by 2029 is considered reasonable, reflecting Cadeler’s structural growth, ESG alignment, strong order book, and superior revenue visibility relative to traditional rig operators (6–9x).
  • However, Cadeler remains an asset-heavy business with inherently low return on equity (ROE) and return on capital (ROC). As a result, a higher multiple than otherwise warranted by growth alone may not be justified.

To be on the lookout for

  • Leverage, albeit unutilized facilities exist company gearing ratio has increased significantly from net debt/EBITDA 1.5 2022 to 4.2 2025.
  • Management guidance on revenue growth, given high order backlog management projections should be decent.

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Disclaimer

The user Mandelman has a position in OB:CADLR. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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