VAT Group’s Record Order Book Masks a Profit Squeeze — For Now
Published on 07/26/2026 at 02:10 | Redaktion boerse-global.de
The Swiss vacuum valve manufacturer VAT Group is telling two stories at once, and investors are struggling to decide which one to believe. On one hand, the company posted the strongest quarterly order intake in its history. On the other, net profit fell and margins disappointed the market. The tension between these competing narratives has left the stock in a curious position: up more than 70% for the year, yet trading 10.83% below its 52-week high of 786.80 euros, hit in early July.
The headline numbers from Wednesday’s half-year report are striking. VAT Group booked 500 million Swiss francs in orders during the second quarter — a 102% surge year-on-year — pushing the total order backlog to a record 648 million francs as of June 30, up 121% from a year earlier. The company attributes the boom to a wave of investment in artificial intelligence, which is driving demand for advanced logic and memory chip manufacturing capacity. To keep pace, VAT Group has expanded its workforce by 22% since the start of the year, adding more than 700 full-time positions to reach 3,959 employees.
Yet the cost of that expansion is visible in the profit-and-loss statement. First-half net revenue fell 8% to 511.9 million francs, while net profit dropped 6.4% to 98.8 million francs from 105.6 million a year earlier. The EBITDA margin slipped to 29.0% from 29.6%, undershooting market expectations. Management explained that heavy upfront spending on capacity expansion weighed on profitability — a classic pattern of investing for future growth at the expense of near-term earnings.
The market’s reaction was telling. Between Tuesday and Wednesday, the stock lost roughly 6% as investors weighed the record order book against the margin weakness. By Friday’s close, shares had recovered slightly to 701.60 euros, up 0.46% on the day but still trading just below their 50-day moving average. The annualized volatility of the stock stands at nearly 48.5%, underscoring how much uncertainty is priced into the name.
Should investors sell immediately? Or is it worth buying VAT Group?
Analyst opinions reflect the same split. BNP Paribas raised its price target from 755 to 805 francs on Friday, reiterating an “Outperform” rating and pointing to the strong order momentum in semiconductor investment. Barclays followed suit, lifting its target from 760 to 780 francs with an “Overweight” call, also citing the ongoing capex cycle in chips. But Morgan Stanley struck a more cautious tone immediately after the results, maintaining an “Equal-weight” stance and stressing that the key question is operational execution — whether VAT Group can convert its bulging backlog into revenue and margin improvement in the quarters ahead.
Management has held firm on its full-year guidance, forecasting growth in revenue, EBITDA, and free cash flow compared with 2025. For the third quarter, the company expects revenue between 355 million and 385 million francs, with a run-rate target of over 450 million francs per quarter by year-end. The next major checkpoint comes on October 15, when VAT Group releases its third-quarter update. That report will show whether the capacity investments are beginning to pay off.
Adding another layer to the story, VAT Group announced on Thursday the full acquisition of Japanese technology firm Atonarp for roughly 110 million francs in cash. The deal, financed through a bilateral loan and advised by Baker McKenzie, comes as the company is already scaling up its own operations. Details on Atonarp’s business were not disclosed, but the move signals that VAT Group is not relying solely on organic expansion to capture the AI-driven wave.
VAT Group at a turning point? This analysis reveals what investors need to know now.
For now, the investment case rests on a bet: that the current margin squeeze is a temporary byproduct of aggressive capacity building, not a structural deterioration. The record order book and the semiconductor industry’s insatiable appetite for AI-related equipment provide powerful supporting evidence. But with the stock already pricing in a substantial premium — and volatility near 50% — the October numbers will be the real test. If the backlog starts translating into revenue and margin expansion, the bulls will be vindicated. If not, the gap between the order book and the bottom line will become harder to ignore.
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